Death of a Remedy: The Supreme Court's Ill-fated Decision to Foreclose an Avenue of Liability against Managed Care Organizations under ERISA in Pegram v. Herdrich, 530 U.S. 211, 120 S. Ct. 2143 (2000)

Authors

Sara L. Broyhill, University of Nebraska College of Law

Abstract

I. Introduction

II. Background ... A. The Emerging Conflict Between ERISA and Managed Care ... B. Case-in-Point

III. Analysis: The Supreme Court's Decision in Pegram ... A. ERISA's Text and Legislative History Manifests Congress' Intent for Courts to Hold MCOs Liable as ERISA Fiduciaries ... 1. MCOs Constitute Fiduciaries Under ERISA ... 2. Financial Incentive Schemes Imposed on Physicians Constitute a Breach of MCOs' Fiduciary Duties ... B. Fiduciary Obligations Apply to MCOs Whose Physicians Make Mixed Eligibility Decisions as a Result of Financial Incentive Schemes ... C. ERISA's Broad Preemptive Effect Undermines the Court's Justification for Immunizing MCOs from Liability

IV. The Effect of the Supreme Court's Abdication on the Future of the Medical Industry ... A. Immunizing MCOs from Liability Will Reduce the Quality of Healthcare Services ... B. Allowing MCOs to Administer Financial Incentives to Their Physicians Will Lead to Adverse Selection of Patients ... C. Allowing Financial Incentive Arrangements Threatens the Physicians' Duty of Loyalty to Their Patients

V. Conclusion

Recommended Citation

Sara L. Broyhill, Death of a Remedy: The Supreme Court's Ill-fated Decision to Foreclose an Avenue of Liability against Managed Care Organizations under ERISA in Pegram v. Herdrich, 530 U.S. 211, 120 S. Ct. 2143 (2000), 79 Neb. L. Rev. (2000)
Available at: https://digitalcommons.unl.edu/nlr/vol79/iss3/6