Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, December 30, 1993 TAG: 9312300202
SECTION: NATIONAL/INTERNATIONAL PAGE: A-2 EDITION: METRO
SOURCE: Associated Press
DATELINE: RIVERSIDE, CALIF. LENGTH: Medium
Lawyers for Nelene Fox had argued that the HMO's refusal to cover the procedure cost the woman her life.
A Superior Court jury agreed and on Tuesday ordered Health Net, California's second-largest HMO, to pay $77 million in punitive damages to her family. Jurors awarded $12.1 million in compensatory damages last week.
"The purpose of this was never to get money, or else we would have settled already," said Fox's husband, Jim. "The message is that an HMO can't have a financial incentive to withhold treatment in order to make money."
Health Net attorney Steven Meadville said the award in the breach-of-contract case was "outrageous, inconsistent and rendered solely on the basis of emotion." He said it would strip Health Net of its entire net worth, which he put at $57 million. He said the HMO will appeal.
A Fincastle, Va., man, Frank Smusz, has a $2.35 million suit pending against Blue Cross and Blue Shield of Virginia over similar circumstances. The insurance company refused to pay for the treatment Smusz's wife, Lorraine, sought, saying the costly combination of high-dose chemotherapy and a bone marrow transplant was experimental. Lorraine Smusz also died.
One of the issues in the Botetourt County suit is whether the insurer's position amounted to a breach of contract with its policyholder.
Attorneys on both sides said the California award was the biggest verdict ever against an insurer for refusing to provide coverage.
Fox was diagnosed with breast cancer in 1991 at age 38. Despite three months of chemotherapy, the cancer spread to her bone marrow. Doctors said her only hope was a marrow transplant. Health Net said it would not pay because it considered the procedure experimental.
Fox's case is part of a continuing battle around the country between patients seeking costly, experimental treatments and insurance companies struggling to contain rising health care costs.
Glenn Campbell, a lawyer for the Fox family, said an internal Health Net panel had approved the procedure and that the employee who denied the request was paid in part according to how much money he saved Health Net.
by CNB