Requiring Managed Care to Disclose the Use of Financial Incentives: Shea v. Esensten, 107 F.3d 625 (8th Cir. 1997)

Authors

Paul Heimann, University of Nebraska College of Law

Abstract

This Note first presents the factual background and procedural history of Shea v. Esensten. Next, this Note analyzes the judicial and legislative reluctance to hold managed care organizations (MCOs) accountable for the results of their use of financial incentives. This Note then examines: 1) the impact of ERISA preemption on cases like Shea that attack the use of financial incentives to reduce care; 2) the court’s solution to the “problem” presented in Shea, holding that there is a fiduciary duty to disclose such incentives under ERISA; and 3) the fact that despite the court’s holding, Mrs. Shea cannot receive compensatory damages for the death of her husband. This Note concludes by finding that despite the court’s interest in protecting patients from the “hidden nature” of financial incentives, the holding does little to address the larger problems which are implicit in such arrangements.

Recommended Citation

Paul Heimann, Requiring Managed Care to Disclose the Use of Financial Incentives: Shea v. Esensten, 107 F.3d 625 (8th Cir. 1997), 77 Neb. L. Rev. (1998)
Available at: https://digitalcommons.unl.edu/nlr/vol77/iss3/5