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Federal law does not preempt a state malpractice action when an HMO denies coverage based on a patient's medical evaluation, even if the decision is also based on a legal evaluation of the insurance contract, a prominent federal appellate court held Feb. 11.
The Employee Retirement Income Security Act, which supercedes state laws that "relate to" benefits plans, has often been construed by courts as protecting health plans from state-court suits. But in Cicio v. Vytra Healthcare, a three-judge panel of the U.S. Court of Appeals for the 2nd Circuit said recent decisions by the United States Supreme Court have eroded that protection, thereby accomplishing through …