Medical Injury Compensation Fund

MANAGED CARE, UTILIZATION REVIEW, AND FINANCIAL RISK SHIFTING: 
COMPENSATING PATIENTSFOR HEALTH CARE COST CONTAINMENT INJURIES[FNa]

This Part begins by summarizing the problems with the current tort system in Section A. Then, in Section B, the elements of the alternative medical injury compensation fund are set out. Section C addresses the limitations and problems inherent in implementing a fund system like the one proposed. Section D, on the other hand, outlines the important benefits that would be provided by the proposed fund. 

A. Problems with the Tort System 

The tort system results in a significant degree of chance, heavy transactional costs, inadequate compensation recovery, enormous malpractice premiums, and ineffectual deterrents. A significant element of chance exists under the tort system.  Recovery is speculative and has been equated to a lottery.⁽³⁷⁶⁾ Even though seventeen percent of adverse outcomes in medical patients are traceable to negligence,⁽³⁷⁷⁾ under the current tort recovery system only ten percent of injured patients eventually file a claim, and only four percent actually receive compensation. ⁽³⁷⁸⁾ The persons least likely to receive compensation are likely to be those least able to afford the injuries: the poor, women, and minorities. These groups have historically had inadequate access to the legal system, clearly affecting their ability to recover for cost containment injuries. 

The tort system imposes heavy transactional costs. Even for those who actually receive compensation, the transactional costs created by the process are immense. Plaintiffs incur significant costs in time, money, and stress.⁽³⁷⁹⁾ The average medical malpractice claim takes over eighteen months to settle or adjudicate.⁽³⁸⁰⁾ Much of this time is attributable to delay as a defense maneuver.⁽³⁸¹⁾ The costs of litigating malpractice claims are significant,⁽³⁸²⁾ and the psychological stress is real.⁽³⁸³⁾

The tort system provides inadequate recovery. Even after investing the time, money, and stress, the plaintiff's recovery is still likely to be inadequate to compensate her economic losses. In fact, up to forty percent of any award goes to attorney fees.⁽³⁸⁴⁾ Thus, even if a patient overcomes the difficulty of recovering under the tort system and gets past the barrier of ERISA, compensation is likely to be inadequate. 

The tort system breeds enormous malpractice premiums. Despite meager overall compensation, the extraordinary size of some tort recoveries has allowed insurance companies and others to create the impression of a medical malpractice crisis. This perception has allowed malpractice insurers to raise premiums astronomically.⁽³⁸⁵⁾ For example, high-risk specialists  such as neurosurgeons and obstetricians in high-risk states such as New York and Florida pay annual medical malpractice insurance premiums of $100,000 to $200,000.⁽³⁸⁶⁾ During three years in the 1980s, total medical malpractice premiums skyrocketed from $2 billion to more than $5 billion.⁽³⁸⁷⁾ It is important to keep this in perspective: The average physician pays medical malpractice premiums of only $16,000.⁽³⁸⁸⁾ Nevertheless, the overall increase in expenditures for malpractice insurance translates into increases in the cost of health care for everyone. 

The tort system provides ineffectual deterrents. Whether the tort system deters substandard care is, at best, speculative.⁽³⁸⁹⁾ The question is whether third-party payers will alter their behavior to conform to the legal standard for cost containment activities indicated by tort recovery. For instance, testing for glaucoma in persons under the age of forty was once seen as medically unnecessary because of the infrequency of the condition in that age group. But after Gates v. Jensen,⁽³⁹⁰⁾ physicians may have begun to test persons under forty more frequently as a form of defensive medicine-they test to avoid liability, not to diagnose a specific condition. Third-party payers would not necessarily react in the same way. They could view the court as wrong and not conform their behavior, or they could simply ignore the court altogether, confident that traditional liability theories would not reach them. After all, only theoretical possibilities have been articulated, and no real and substantial deterrent effect has been proved.⁽³⁹¹⁾

Consequently, whether viewed from the perspective of the nonrecovering patient, the premium-paying physician, or the damages-paying third-party payer, the present system is inadequate to handle the task of fairly distributing the cost of injuries. In addition to fairness problems, the present system exacerbates the cost of medical injuries through transactional costs, social costs of delay and disability, individual costs of fearful practitioners, and what may be developing as a systemic cost of defensive medical practice. 

 These problems are based on the preexisting system of health care delivery, which was based on the singular relationship between provider and patient. The new relationship between third-party payers and providers, developed through the introduction of managed care, will result in additional and new kinds of injuries to encumber and tax an already overburdened system. Because managed-care injuries have such difficult problems of proof and are so indirect in causation, those injuries widen the gap between injury and compensation. For these reasons, it would be wise to consider some alternative to the present tort system to allocate the burden for injuries. 

B. Elements of a Medical Injury Compensation Fund 

This Article proposes, in general terms, an alternative system of medical injury compensation analogous to the widely accepted workers' compensation system.⁽³⁹²⁾ Workers' compensation systems are based on the premise that injuries arising out of, and in the course of, one's employment should constitute an expense of doing business and that, therefore, the level of fault is irrelevant in most circumstances.⁽³⁹³⁾ Recovery for one's injury is certain, and proof problems are limited.⁽³⁹⁴⁾ On the other hand, the amount of recovery is less than full.⁽³⁹⁵⁾ The injured employee's medical expenses are fully covered,⁽³⁹⁶⁾ her rehabilitation expenses are usually fully covered,⁽³⁹⁷⁾ and her loss of earning capacity recovery is limited.⁽³⁹⁸⁾ Thus, the amount of money received by the injured employee does not make the employee whole.⁽³⁹⁹⁾ However, because the transactional costs to the injured employee are minimal, the employee may, in real dollars, recover at about the same level as if the employee went to trial. The objectives of the system are to get  the employee back on the job and to induce employers to avoid on the job injury. 

Like workers' compensation, the medical injury compensation fund would compensate quickly, correctly, and without regard to fault. An effective compensation scheme will deal with several issues: defining the compensable injury, determining the amount of compensation, financing the scheme, notifying the public of the existence of the fund and the performance of providers, defining exemptions, and covering legal fees for denied claims.

1. Defining Compensable Medical Injuries 

The primary focus of the compensation fund would be on whether the patient incurred a medical injury. The fund would compensate for injuries arising out of, and in the course of, health care treatment. While the well-developed case law interpreting the workers' compensation requirements could be used by analogy, there are unique definitional problems, the most significant of which is defining "medical injury" itself. Certainly not all consequences to a patient should be covered. In particular, those physical conditions that are the natural consequences of disease or the aging process would not be covered. 

Essentially, compensable medical injuries would be composed of four categories: treatment injuries, drug injuries, cost containment injuries, and informed consent injuries. For example, in the area of drug therapy, treatment injuries would consist of injuries caused by giving the patient the wrong medication or the wrong dosage of medication, or by failing to give needed medication. Drug injuries would be caused by an injurious reaction to an otherwise appropriately prescribed drug. Cost containment injuries would be caused by the refusal of the third-party payer to authorize payment for an essential and expensive drug. Informed consent injuries would result from the failure to inform the patient of the probable side effects of an otherwise appropriately prescribed drug. 

Because the possibilities of fraud in connection with claims of failure to inform are so great, it is proposed that these claims be left to the existing tort system.⁽⁴⁰⁰⁾ To include these claims in the compensation system would be inappropriate because the claims are peculiarly tied to conduct rather than status or circumstances.  The focus for questions of causation in the other three categories is on the source of injury, as in a workers' compensation system, and not on the conduct of the actor. 

Another problem is defining the point at which subsequent injuries become so attenuated that they should not be covered by the system. As in workers' compensation, a medical injury could result from a previous medical injury or from complications of an initial condition. 

As noted, a medical injury compensation fund will have difficulty defining an injury. Unlike the tort system, however, problems of proof of causation are almost nonexistent. A person wishing to recover from the medical injury compensation fund will only have to prove that (1) there was a medical injury and (2) the injury occurred in the course of medical services. 

2. Compensation 

Compensation would be limited but adequate to meet the patient's economic need, which is not necessarily the same as her economic loss. While limited recovery is a necessary part of a compensation scheme, recovery should not be so limited that it fails to act as a deterrent to unsafe medical and managed care practice or causes an economic hardship to the injured patient. To meet these requirements, the fund would compensate for medical expenses,⁽⁴⁰¹⁾ economic expenses,⁽⁴⁰²⁾ and disabling pain and suffering.⁽⁴⁰³⁾

3. Financing the Fund 

The fund would be financed by premium payments from all health care providers, health care institutions, and managed care organizations. All health care providers (e.g., physicians, hospitals, nurses, nursing homes, laboratories) licensed by a state to provide any kind of health care services would pay into the fund. The providers' payments could be based on a set premium or on a percentage of gross income from providing health care services. 

 Whatever the initial mechanism, subsequent premiums would be adjusted on the basis of the injury experience in the particular medical field and on the basis of individualized claim experience. Physicians in high-risk specialties in high-risk states would pay the highest premiums, and individual physicians with high-claim experience would pay higher premiums. Similarly, third-party payers' premiums could be based on both the risk they undertake and their actual claims history. The fund can act as a deterrent to unsafe practice if premiums are based on actual claims history-both the number of claims and total amount paid out for the claims. 

4. Duty of Public Notice 

The authorizing statute of the fund would create a duty on the provider, institution, or organization to notify all patients of the fund's availability, benefits, and limitations. In addition, it would require publication of risk experience. These requirements would assure that patients were aware of their rights and could exercise those rights before the running of the statute of limitations. It would also provide patients with information that they could use to evaluate providers or procedures.⁽⁴⁰⁴⁾

5. Exemptions 

Intentional and malicious conduct would be exempted from the fund, and the patient would continue to have a tort cause of action, but without the defendant having any of the usual conduct defenses. Refusal or failure of the physician to participate in the fund would give the patient the option of recovery against the defendant (at three times the normal recovery) or recovery in tort without the defendant having conduct defenses. 

6. Attorney's Fees 

If the patient brings in an attorney because of a denial of a claim, a prevailing patient's costs of suit or administrative costs, excluding attorney's fees, would be payable by the defendant. The patient and the attorney could make any appropriate agreement concerning attorney's fees, but the department of medical injury compensation would have the authority to approve or disapprove any attorney's fee agreement. If the department disapproves, the attorney's services would be compensable under a statutorily set rate. 

C. Problems of a Medical Injury Compensation Fund 

Implementing a medical injury compensation scheme presents several difficulties. The first problem is the ability to maintain fiscal stability in the face of increasing participation. The second problem is curing and preventing the occurrence of fraud, abuse, and malingering. The third problem is state and federal constitutional challenges. Finally, because a scheme such as this would have to be enacted legislatively, the fourth problem is political feasibility. 

1. Fiscal Stability 

Any compensation scheme that proposes to include one hundred percent of medical injuries will face issues related to fiscal stability. Workers' compensation schemes continuously confront issues of continued fiscal viability.⁽⁴⁰⁵⁾ In general, the rising cost of medical care for the injured worker has placed workers' compensation systems in jeopardy.⁽⁴⁰⁶⁾ The state can absolutely control by statute the amount of benefits received by the injured worker herself, but cannot control medical costs. However, the definitions of temporary total disability, temporary partial disability, permanent total disability, and permanent partial disability have been altered by the courts over the years that workers' compensation systems have been in place, so that the length of recovery time allowed for any particular injury has expanded over time.⁽⁴⁰⁷⁾

This problem precurses a decision that must be made in connection with a medical injury compensation scheme: whether to compensate on the basis of simple physical impairment, such as loss of bodily function, or the more complex loss of earning capacity. The issue of increasing costs of medical services should not be as significant in the case of a medical injury compensation fund because the additional compensation for medical injuries would be a quid pro quo to offset medical cost containment efforts, such as utilization review and financial risk shifting. These cost containment efforts should prevent the  fiscal instability arising from runaway medical costs that have plagued workers' compensation systems. 

2. Fraud, Abuse, and Malingering 

In any system where compensation is made not on the basis of conduct but on the basis of status, the problems of fraud, abuse, and malingering are intensified.⁽⁴⁰⁸⁾ Ordinarily, a person who seeks medical treatment seeks the care for physical, mental (psychological), or social reasons. A compensation scheme adds an economic incentive. Physicians are trained to distinguish between physical, mental, and social causes for illness or articulated symptoms but are not necessarily adept at identifying economic causes. Thus, curing fraud, abuse, and malingering will be a problem with a medical injury compensation scheme just as it has been a problem with workers' compensation. Still, the benefit of providing compensation to the significant number of injured individuals who have been previously excluded outweighs any additional costs of overcoming fraud, abuse, and malingering.⁽⁴⁰⁹⁾

3. Constitutionality 

In workers' compensation, a takings issue arises because the employer forgoes its defenses and the employee gives up a right to full recovery, both of which are arguably property rights. In New York Central Railroad v. White,⁽⁴¹⁰⁾ however, the Supreme Court held that the government has a right to add to, and subtract from, defenses as a right of sovereignty.⁽⁴¹¹⁾ The Court also held that because the workers' compensation system incorporated a quid pro quo (foregoing defenses in exchange for foregoing complete recovery), the scheme did not constitute a taking. ⁽⁴¹²⁾ A medical injury compensation scheme incorporates the same quid pro quo. Health care providers give up their defenses, and patients give up their right to full recovery. Over the last ten years, however, the Supreme Court has dramatically altered its view of what constitutes a taking, so that its attitude about workers' compensation schemes may no longer hold.⁽⁴¹³⁾

4. Political Feasibility 

Only a few years ago, the political feasibility of instituting a medical injuries compensation scheme would have been questionable. There was little public concern about the so-called medical malpractice crisis and powerful opposition to such a scheme.⁽⁴¹⁴⁾ Both attorneys and insurers had powerful lobbies that could effectively oppose any state or federal attempts to institute a medical injuries no-fault scheme.⁽⁴¹⁵⁾ The recent focus on the need to reform the health care system to control cost may make a medical injury compensation scheme more appealing.⁽⁴¹⁶⁾ In effect, the quid pro quo for instituting utilization review, financial risk shifting, and other cost containment measures should be the compensation of all medical injuries. 

D. Benefits and Consequences of a Medical Injury Compensation Fund 

A medical injury compensation fund would have several benefits. One benefit would be an overall reduction in administrative costs for medical injuries. Another benefit would be significantly increased participation in this recovery system over the tort system. As participation increased, however, potential monetary recovery would be reduced. The most significant benefit would be spreading the cost of managed care injuries to managed care products. The fund would avoid the problems that traditional tort theories present and would also avoid the barrier that ERISA presents. 

1. Reduced Administrative Costs 

Administrative costs would be reduced. The time and delay of traditional jury trials are not present in the typical workers'  compensation scheme and would not be present in the medical injury compensation fund.⁽⁴¹⁷⁾ Instead, authorizing legislation would impose strict liability on health care providers and organizations.⁽⁴¹⁸⁾ Thus, society's interest in preventing economic hardship and reducing transactional costs would be elevated over the attribution of fault. This elevation would allow for faster claim administration.⁽⁴¹⁹⁾

2. Increased Participation 

Currently, of every one hundred patients who experience a medical injury, approximately six receive compensation.⁽⁴²⁰⁾ Under a medical injuries compensation fund, all one hundred would receive compensation. Although patients who cannot prove an injury or prove that an injury occurred in the course of medical care would still not recover, they by definition do not have a medical injury. 

3. Reduced Monetary Recovery 

Reduced monetary recovery by the patient is necessary to limit the economic liability of the health care providers and of society as a whole.⁽⁴²¹⁾ The limits on societal resources require that some of the risks of medical treatment be apportioned to the patient.

Of every one hundred patients who suffer an injury during and related to medical treatment, seventeen have injuries falling within the present concepts of provider negligence. ⁽⁴²²⁾ Of these, only four receive any compensation.⁽⁴²³⁾ Thus, a scheme compensating all one hundred injured patients could cost about twenty-five times as much as the present system; a scheme compensating only the seventeen injuries because of provider fault would cost about four times as much. Even assuming a dramatic increase in system efficiency, resulting in only thirty percent of the premium dollars being lost in transactional costs, the scheme would still cost three to seventeen times as much as  presently.⁽⁴²⁴⁾ Consequently, as noted by one author, "economic realities require patients to carry some of the risk of injury."⁽⁴²⁵⁾

4. Greater Spread of the Cost of Managed Care Injuries 

Current tort theories are inadequate to encompass managed care injuries. The doctrines of corporate negligence, respondeat superior, and ostensible agency are all inadequate to spread the cost of managed care injuries because they focus on the negligent conduct of providers and not on the utilization review process or financial risk shifting. Attempts to hold the managed care product directly liable for utilization review and financial risk shifting have not been able to overcome the tendency of courts to focus on the character of the decision-making conduct rather than on the inevitability of effects on individual patients. Thus, when trying to hold managed care directly liable, the problems of burden of proof continue to prevent liability from attaching. These problems are overcome with a medical injury compensation fund, because all medical injuries, regardless of the source, would be covered. 

E. Summary 

The goals of the current tort system to compensate victims and to deter substandard medical care cannot be met for either existing medical injuries or managed care injuries. In contrast, a medical injury compensation system, like workers' compensation, could compensate quickly, correctly, and without regard to fault. Such a system would not only have the advantage of increasing compensation from four percent to one hundred percent for medical injuries, it would also be an efficient way of covering medical injuries caused by health care cost containment efforts, thus spreading the risk of cost containment throughout society. 

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Endnote

315. FN315. 29 U.S.C. ss 1001-1461 (1988). 

316. FN316. SENATE COMM. ON LABOR AND PUB. WELFARE, RETIREMENT INCOME SECURITY FOR EMPLOYEES ACT OF 1973, S. REP. NO. 127, 83d Cong., 1st Sess. 29 (1973). 

317. FN317. 29 U.S.C. ss 1001-1145 (1988). 

318. FN318. Id. 

319. FN319. Id. s 1132. 

320. FN320. Id. s 1132(e)(1). 

321. FN321. Id. s 1001(b). Before 1974, there was no comprehensive body of law governing the administration and regulation of employee benefit plans. At the federal level, employee benefit plans were regulated through the Internal Revenue Code and s 302 of the Taft-Hartley Act, 29 U.S.C. s 186 (1988). In 1958, the Welfare and Pension Plan Disclosure Act, Pub. L. No. 85-836, 72 Stat. 997 (1958) (repealed 1976), required certain reports and disclosure. However, the states exercised their authority through inconsistent doctrines of state trust, insurance, and contract law. Daniel W. Sherrick, ERISA Preemption: An Introduction, 64 MICH. B.J. 1074, 1074 (1985), available in WESTLAW, TP-All File. 

322. FN322. 29 U.S.C. s 1144(a) (1988). State law includes "all laws, decisions, rules, regulations, or other State action having the effect of law." Id. s 1144(c)(1). A state includes "political subdivisions ..., or any agency or instrumentality ... which purports to regulate directly or indirectly the terms and conditions of employee benefit plans." Id. s 1144(c)(2). Furthermore, ERISA exempts certain state laws from preemption (i.e., acts or omissions occurring after January 1, 1975): (1) laws that regulate insurance, banking, or securities; (2) criminal laws of general applicability; (3) any law of the United States; and (4) public employer plans, church plans, and workers compensation plans. Id. s 1144(a)-(d). Thus, without an explicit exemption, ERISA applies to any state law that regulates medical benefit plans. 

323. FN323. FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990) (noting that "[t]he preemption clause is conspicuous for its breadth"); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987) ("deliberately expansive"). 

324. FN324. See generally Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 133 (1990) (cause of action allowing recovery from employer when discharge is premised on an attempt to avoid contributing to pension plan is preempted); Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 829-30 (1988) (statute explicitly barring garnishment of ERISA plan funds is preempted); Dedeaux, 481 U.S. at 47-48 (common law tort and contract causes of action seeking damages for improper processing of a claim for benefits under a disability plan are preempted); Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97 (1983) (statute interpreted by state court as prohibiting plans from discriminating on the basis of pregnancy is preempted); Christopher v. Mobil Oil Corp., 950 F.2d 1209, 1218 (5th Cir.) (common law fraud and negligent misrepresentation claims that allege reliance on agreements or representations about the coverage of a plan are preempted), cert. denied, 113 S. Ct. 68 (1992). 

325. FN325. 29 U.S.C. s 1132(a)(1)(B) (1988); see, e.g., Cathey v. Dow Chemical Co. Medical Care Program, 907 F.2d 554, 555 (5th Cir. 1990), cert. denied, 498 U.S. 1087 (1991). 

326. FN326. 29 U.S.C. s 1132(a)(3) (1988). 

327. FN327. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985). A number of circuits have adopted the view that no money damages would be awardable. See Harsch v. Eisenberg, 956 F.2d 651 (7th Cir.), cert. denied, 113 S. Ct. 61 (1992); Novak v. Andersen Corp., 962 F.2d 757 (8th Cir. 1992); Drinkwater v. Metropolitan Life Ins. Co., 846 F.2d 821 (1st Cir.), cert. denied, 488 U.S. 909 (1988); Bishop v. Osborn Transp., Inc., 838 F.2d 1173 (11th Cir.), cert. denied, 488 U.S. 832 (1988); Sokol v. Bernstein, 803 F.2d 532 (9th Cir. 1986). 

328. FN328. See supra part IV. 

329. FN329. 965 F.2d 1321 (5th Cir.), cert. denied, 113 S. Ct. 812 (1992). 

330. FN330. Id. at 1322, 1323. MAP was a self-funded medical benefits plan. The plan was administered by Blue Cross and Blue Shield of Alabama (Blue Cross) pursuant to an Administrative Services Agreement between Bell and Blue Cross. Id. 

331. FN331. Id. at 1322. 

332. FN332. In the first pregnancy, the fetus went into distress at the 36th week. The obstetrician had to perform a Cesarean section to successfully deliver the baby. Id. at 1323. 

333. FN333. Id. at 1322-23. 

334. FN334. Under the portion of MAP known as the "Quality Care Program" (QCP), participants were required to obtain precertification for overnight hospital admissions, and concurrent review or approval once they were admitted to a hospital. Failure of the plan's participants to obtain approval would affect the benefits to which they were otherwise entitled. Id. at 1323. 

335. FN335. Id. at 1322. 

336. FN336. Id. 

337. FN337. Id. 

338. FN338. Id. at 1324. 

339. FN339. Id. at 1325; see also Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987) (holding that ERISA preemption is so exhaustive that a preemption defense provides an adequate basis for removal to federal court). 

340. FN340. All parties agreed that the plan was governed by ERISA. Corcoran, 965 F.2d at 1325. 

341. FN341. Id. 

342. FN342. Id. 

343. FN343. Id. 

344. FN344. Id. 

345. FN345. Id. at 1325-26. 

346. FN346. E.g., Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985); Lorenzen v. Employees Retirement Plan of Sperry & Hutchinson Co., 896 F.2d 228, 230 (7th Cir. 1990); Warren v. Society Nat'l Bank, 905 F.2d 975 (6th Cir. 1990), cert. denied, 111 S. Ct. 2256 (1991). 

347. FN347. Corcoran, 965 F.2d at 1326 (quoting Corcoran v. United HealthCare, Inc., Civ. A. No. 90-4303, 1991 WL 353841, at *1 (E.D. La. Apr. 3, 1991)); see also Settles v. Golden Rule Ins. Co., 927 F.2d 505, 570 (10th Cir. 1991); McRae v. Seafarers' Welfare Plan, 920 F.2d 819, 821-22 n.8 (11th Cir. 1991); Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1297 (5th Cir. 1989); Sommers Drug Stores Co. Employee Profit Sharing Trust v. Corrigan Enters., Inc., 793 F.2d 1456, 1462-64 (5th Cir. 1986), cert. denied, 479 U.S. 1034, and cert. denied, 479 U.S. 1089 (1987). 

348. FN348. Corcoran, 965 F.2d at 1329. 

349. FN349. Id. at 1330. See generally Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987). See also William A. Chittenden III, Malpractice Liability and Managed Health Care: History and Prognosis, 26 TORT & INS. L.J. 451, 489 (1991) (stating that claims of negligence for injuries caused by utilization review denial of medical services "can ... be characterized as claims founded upon a constructive denial of plan benefits"). 

350. FN350. Corcoran, 965 F.2d at 1330. 

351. FN351. Id. See generally Sommers Drug Stores, 793 F.2d at 1456. 

352. FN352. Corcoran, 965 F.2d at 1331. 

353. FN353. Id. 

354. FN354. Id. at 1337. 

355. FN355. Id. at 1335. 

356. FN356. See supra notes 177-183 and accompanying text. 

357. FN357. The court relied on the QCP booklet for "substantial support" for its view that the refusal was a medical decision. United's booklet says that it "assess[es] the need for surgery or hospitalization and determine[s] the appropriate length of stay for a hospitalization, based on nationally accepted medical guidelines." Corcoran, 965 F.2d at 1331. The booklet goes on to say that United "will discuss with your doctor the appropriateness of the treatments recommended and the availability of alternative types of treatments." Id. The booklet emphasizes that "United's staff includes doctors, nurses, and other medical professionals knowledgeable about the health care delivery system. Together with your doctor, they work to assure that you and your covered family members receive the most appropriate medical care." Id. 

358. FN358. Id. According to the court, the disclaimer only supports the conclusion that no physician-patient relationship existed between United and Corcoran. Id; see also Wickline v. California, 239 Cal. Rptr. 810, 819 (Ct. App. 1986) (declining to hold MediCal liable but recognizing that it made a medical judgment). 

359. FN359. Corcoran, 965 F.2d at 1332. 

360. FN360. Id. 

361. FN361. Id. 

362. FN362. Id. 

363. FN363. Id. at 1333. 

364. FN364. Id. 

365. FN365. Id. 

366. FN366. Id. at 1332-33. 

367. FN367. See Leslie C. Giordani, Comment, A Cost Containment Malpractice Defense: Implications for the Standard of Care and for Indigent Patients, 26 HOUS. L. REV. 1007, 1021 (1989). 

368. FN368. Corcoran, 965 F.2d at 1333; see also Memorial Hosp. Systems v. Northbrook Life Ins. Co., 904 F.2d 236, 248 n.16 (5th Cir. 1990); Lee v. E.I. Dupont de Nemours, 894 F.2d 755, 757 (5th Cir. 1990). 

369. FN369. Corcoran, 965 F.2d at 1334. 

370. FN370. Id.; see Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990) (wrongful discharge action preempted); Christopher v. Mobil Oil Corp., 950 F.2d 1208, 1218 (5th Cir.) (fraud action preempted), cert. denied, 113 S. Ct. 68 (1992); Sommers Drug Stores Co. Employee Profit Sharing Trust v. Corrigan Enters., Inc., 793 F.2d 1456, 1467 (5th Cir. 1986), cert. denied, 479 U.S. 1034, and cert. denied, 479 U.S. 1089 (1987). 

371. FN371. Corcoran, 965 F.2d at 1338-39. 

372. FN372. Id. 

373. FN373. Id. at 1338. 

374. FN374. Id. 

375. FN375. David S. Starr, The No-Fault Alternative to Medical Malpractice Litigation: Compensation, Deterrence, and Viability Aspects of a Patient Compensation Scheme, 20 TEX. TECH L. REV. 803, 806 (1989). 

376. FN376. Id. 

377. FN377. Id. 

378. FN378. Id. 

379. FN379. Id. 

380. FN380. Tan, supra note 186, at 243 n.13. 

381. FN381. Starr, supra note 375, at 806-07 n.23. 

382. FN382. Murray L. Schwartz & Daniel J.B. Mitchell, An Economic Analysis of the Contingent Fee in Personal Litigation, 22 STAN. L. REV. 1125 (1970) (noting that the greatest expense for the plaintiff is the contingent fee). 

383. FN383. Starr, supra note 375, at 806-07 n.23. 

384. FN384. Id. 

385. FN385. Stephen D. Sugarman, Doctor No, 58 U. CHI. L. REV. 1499 (1991) (reviewing PAUL C. WEILER, MEDICAL MALPRACTICE ON TRIAL (1991)). 

386. FN386. Id. 

387. FN387. 1 AMERICAN LAW INSTITUTE, REPORTER'S STUDY, ENTERPRISE RESPONSIBILITY FOR PERSONAL INJURY 3 (1991). 

388. FN388. Sugarman, supra note 385, at 1499. 

389. FN389. Starr, supra note 375, at 807-08. 

390. FN390. 92 Wash. 2d 246, 595 P.2d 919 (1979). 

391. FN391. See Starr, supra note 375, at 808. 

392. FN392. The suggestion of a no-fault compensation plan is not new; it has been proposed by a number of scholars. See, e.g., David G. Duff, Compensation For Neurologically Impaired Infants: Medical No-Fault in Virginia, 27 HARV. J. ON LEGIS. 391, 391 (1990); Jeffrey O'Connell, A 'Neo No-Fault' Contract in Lieu of Tort: Preaccident Guarantees of Postaccident Settlement Offers, 73 CAL. L. REV. 898 (1985); Stephen D. Sugarman, Alternative Compensation Schemes and Tort Theory Doing Away With Tort Law, 73 CAL. L. REV. 558 (1985). 

393. FN393. 1 ARTHUR LARSON, THE LAW OF WORKMEN'S COMPENSATION s 1.1 (1992). 

394. FN394. 1 id. s 1.10. 

395. FN395. 1 id. s 2.50. 

396. FN396. 2 id. s 61.00. 

397. FN397. 2 id. s 61.21. 

398. FN398. 2 id. s 60.00. 

399. FN399. 1 id. s 2.50. 

400. FN400. A patient may typically say, "You may have told me but I obviously did not understand because I consented to the treatment, so my consent was not informed." 

401. FN401. A provider and a patient may agree, however, that the injuring provider may provide continued medical care at no cost and, if so, such medical care will not constitute part of recovery. 

402. FN402. Lost wages, loss of earning capacity, etc. 

403. FN403. Clinical proof of pain would activate a recovery schedule, with the amount of recovery based on the duration of disability and not on the intensity. 

404. FN404. Starr, supra note 375, at 825. 

405. FN405. Id. at 829 n.184. 

406. FN406. H. Michael Bagley et al., Workers' Compensation, 44 MERCER L. REV. 457 (1992). 

407. FN407. See generally 2 LARSON, supra note 393, s 10-57. 

408. FN408. For example, estimates by the General Accounting Office put the amount of welfare fraud and abuse at $1 billion per year. Fraud in Welfare Put at $1 Billion, N.Y. TIMES, Dec. 7, 1987, at A25. 

409. FN409. One study estimates that one percent of hospital patients receive an injury caused by physician negligence. Of those that are injured, only 2 out of every 15 file a claim. Of those who file a claim, only 50% are ever compensated. So only 1 in 15 injured patients ever receive compensation. Paul C. Weiler et al., Proposal for Medical Liability Reform, 267 JAMA 2355, 2355 (1992) (reporting the results of a medical practice study performed at Harvard). 

410. FN410. 243 U.S. 188 (1917). 

411. FN411. Id. at 200. 

412. FN412. Id. at 201. 

413. FN413. See, e.g., Lucas v. South Carolina Coastal Comm'n, 112 S. Ct. 2886 (1992). 

414. FN414. Starr, supra note 375, at 835. 

415. FN415. Id. at 835-36. 

416. FN416. In the last year over 3,000 articles have been written on health care cost containment. In the 102nd Congress, over twenty bills were introduced that addressed the issue of health care reform and cost containment. 

417. FN417. Starr, supra note 375, at 817. 

418. FN418. Id. 

419. FN419. Id. 

420. FN420. Weiler et al., supra note 409, at 2355. 

421. FN421. Starr, supra note 375, at 810. 

422. FN422. Id. at 806 (citing CALIFORNIA MEDICAL ASS'N AND CALIFORNIA HOSP. ASS'N, REPORT ON THE MEDICAL INSURANCE FEASIBILITY STUDY 65 (D. Mills ed., 1977)). 

423. FN423. Id. 

424. FN424. Id. at 810 n.43. 

425. FN425. Id.