Tag Archives: law

1998 – HMO Class Action Lawsuit

Four hundred Tarrant County doctors filed a class action lawsuit against Harris HMO, alleging that the physician payment system in its plan violated Texas insurance laws.  In the lawsuit, which was filed in the 352nd District Court, the physicians asked Judge Bonnie Sudderth to issue a temporary injunction preventing the HMO from enforcing monetary penalties against doctors who overspent their budget in issuing prescriptions to patients. 

The law in Texas at the time the case was filed provided that managed care entities could not establish physician payment systems which created financial incentives to limit medically necessary care to patients.

At the temporary injunction hearing, the undisputed evidence established that physicians who spent less than budgeted amounts received bonuses from the HMO, while doctors who exceeded their budgets were penalized.  At that point in time, the HMO had imposed millions of dollars in fines against the physicians who had exceeded established budgets.  The doctors argued that they shouldn’t be forced to choose between their bottom lines and their patients’  best interests. 

In issuing the requested injunction, Judge Sudderth found that the HMO’s practices resulted in the denial of medically necessary care to patients.  “These denials include circumstances of cherry-picking, patient-dumping … and outright denials of treatment, referrals and prescriptions,” Judge Sudderth explained, in ruling in favor of the requested injunction. 

A few months later, the Texas Insurance Department levied an $800,000 fine against the HMO for violations of state insurance regulations that prohibit health plans from using financial incentives to encourage doctors to withhold medically necessary care.  Shortly thereafter, the HMO announced its plan to do away with the caps on prescription spending in physician contracts and to compensate the doctors who had been fined for exceeding their budgets.  Within a few days of this announcement, the parties entered into settlement negotiations which resulted in the eventual settlement of the lawsuit.

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1999 – Parvin vs. Dean: Lawsuit for Death of Unborn Child

Judge Bonnie Sudderth granted summary judgment in favor of parents who suffered the death of their unborn child as the result of a car accident, on the following facts:  The mother of the child was struck by another vehicle while driving through an intersection.  The other driver stipulated that he was negligent in causing the collision and the woman was not at fault. 

Immediately after the collision, the woman, who was 9-months pregnant at the time, felt her baby kicking in the womb.  Although her water did not break and she had no bleeding, an ambulance took her from the accident scene to a hospital as a precautionary measure.  Her unborn child died in the womb en route to the hospital. 

The next day, knowing that her child was no longer alive and with her husband by her side, she endured more than nine hours of labor to deliver her stillborn daughter.  The undisputed medical evidence proved that the child was fully developed, viable and could have lived outside the womb immediately before the collision, she had the capacity to cry at the time of the collision, she was alive at the time of the collision but survived only for a short period of time thereafter, and, finally, that the collision was the cause of the child’s death.

 The law at the time this case was filed in the 352nd District Cout was that while Texas parents could recover for the wrongful death of a child who died only moments after birth, parents could not sue for the wrongful death for a child who was not born alive.  The law also provided that while the mother could recover for her own mental anguish due to the death of her daughter, the father could not recover for his mental anguish.

Judge Sudderth granted summary judgment, ruling that a viable unborn child was an “individual” within the scope of the Wrongful Death Act, and should not be excluded under the statute because she was not born alive.  Judge Sudderth also ruled that the father was entitled to the same rights as a mother to recover mental anguish damages for the loss of his child.

Judge Sudderth’s decision was appealed to the Second Court of Appeals, who, sitting en banc, upheld Judge Sudderth’s ruling.  Justice Dixon Holman authored the opinion, which can be found at:  Parvin v. Dean, 7 S.W.3d 264 (Tex. App. – Ft  Worth 1999).  In a subsequent unrelated case, the Texas Supreme Court criticized the Parvin v. Dean decision, but shortly thereafter the Texas Legislature amended the statute to codify this result.

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