Randy Calad, Victim

SUGAR LAND, Texas -- Leading up to her hysterectomy about five years ago, Ruby Calad thought she understood all the insurance bureaucracy involving her HMO.

"I'd done my homework," the suburban Houston woman said.

But the day after her operation, she was told by a Houston-area hospital she had to be released because her HMO, Cigna Healthcare of Texas Inc., would approve no additional expenses. She was discharged prematurely, then wound up in an emergency room a few days later, she said. "

(It) ended up costing them more money," Calad, 50, recalled Monday, a few hours after learning the U.S. Supreme Court had ruled against her in a lawsuit stemming from her HMO's decision.

"The court essentially looked the other way on the issue of the HMO abuse," she said. The court said HMOs are shielded from lawsuits in state courts, where juries are more apt to side with victims and recommend multimillion-dollar judgments from insurance companies.

Justice Clarence Thomas, who wrote Monday's ruling, relied on a federal pension benefit law that predates the rise of managed care and said patients may pursue claims only in federal courts, where awards are capped at only the cost of medical services the HMO would not cover.

The ruling means patients like Calad can't seek hefty damage awards in court if their HMOs refuse to pay for doctor-recommended medical care. The unanimous decision rejected arguments that the threat of multimillion-dollar lawsuits keeps insurance companies honest, invalidated an important part of patient rights laws in several states and tossed a political hot potato back to Congress, where lawmakers repeatedly have tried and failed to pass national patient protections.

"I hope this ruling breathes new life into the patients' bill of rights debate in Congress," Calad said. "I'm also hoping they do not just sweep this under the rug and completely forget about it."

The ruling, in a pair of cases filed by Calad and Juan Davila, also of Texas, affects the roughly 72 million people covered by HMOs.

The Texas cases were filed under a patients' rights law passed when President George W. Bush was governor. When Bush was running for president four years ago, he took credit for the law, but his administration sided with insurance carriers when the two cases reached the high court.

In their arguments to the court, lawyers for Cigna noted that Calad's health care plan at the time, like most other health benefit plans, "does not promise to cover any and all health care sought or desired by beneficiaries."

The Supreme Court did not decide whether the plaintiffs deserved better, only whether and where they could sue. "As far as I know, it's dead," Calad said of her legal challenge. "I would do it again. it was worth the fight."

Associated Press Writer Anne Gearan in Washington contributed to this report. Reported in Topix: California Insurance Industry