Posted on July 21, 2005

Jury Awards $7.4 Million in Wrongful Death Lawsuit Against Humana HMO



San Antonio Jury Finds Humana HMO Liable for Negligently Managing Managed Care - HMOs Now Liable for Mismanaging Managed Care

SAN ANTONIO, July 21, 2005 —- In a verdict that will have widespread long-term implications for HMOs (Health Maintenance Organizations) across the nation and the estimated 130 million HMO enrollees they serve, a local jury on July 1 awarded $7.4 million in actual damages in a wrongful death lawsuit against Humana Health Plan of Texas Inc., a physician, and his physicians group under contract to provide health care services. Jurors were to consider punitive damages in the second phase of the trial, but attorneys for Humana and the plaintiffs reached an out-of-court agreement that capped those damages at $1.6 million, bringing the total amount of damages to $9 million. Humana will be liable for 35 percent of the $7.4 million in actual damages and the entire $1.6 million in punitive damages after all appeals are exhausted.

In the lawsuit, John Smelik and his two adult children accused Humana and others of negligence in the June 1, 2001, death of Joan Smelik, John’s wife of 47 years. Brant Mittler, a practicing cardiologist and a lawyer represented the Smeliks along with lead plaintiffs’ attorney Jon Powell, and Renee F. McElhaney, appellate counsel for the case from Cox Smith Matthews Incorporated, the largest law firm in San Antonio. Testifying as an expert witness for the plaintiff in this case was Dr. Linda Peeno, the internationally recognized patients’ rights activist and former Humana Medical Reviewer. Humana was represented by Wilson, Elser, Moskowitz, Edelman & Dicker, based in New York City.

The jury decision came after nearly three days of deliberation, culminating a three-week trial presided over by 224th District Judge Rene Diaz, a conservative Republican recently appointed to the bench by Governor Rick Perry. Judge Diaz most recently comes from an insurance defense background prior to being appointed to the bench. Judge Diaz recognized the importance of the case from the beginning which was demonstrated by his choice to bring in a larger than usual jury venire panel, appointing two alternate jurors, and by allowing the jurors to be paid the legal maximum of $50.00 per day.

The plaintiff challenged managed care not on the basis of denial of care but because Humana failed to exercise ordinary care in performing its obligations in managing care. In this respect, plaintiffs presented evidence that Humana failed to follow its own Member Handbook, Physicians’
Administration Manual, and internal guidelines, policies and procedures.
The jury found that Humana did not apply case management to Joan Smelik as a process of identifying patients with “chronic or potentially catastrophic”
diseases. Case management was also supposed to deal with patients with complex diseases. Mrs. Joan Smelik was a complex patient who according to Humana never hit the “triggers” to qualify for case management. Humana’s own computer records for Mrs. Smelik showed that Humana knew of her diseases even down to the size of each of her small kidneys, which were indicative of “chronic” kidney disease. Ms. Smelik had a documented episode of acute renal failure attributed in part to the effects on her kidneys of a combination of three drugs, specifically a NSAID agent (non-steroidal anti-inflammatory drug), a diuretic, and an ACE inhibitor in September 2000.
Then, Humana approved Vioxx, an NSAID type drug, in January 2001, and later approved the purchases of the exact same three-drug toxic cocktail of prescription drugs that had put Joan Smelik into renal failure five months earlier. Mrs. Smelik died from complications of renal failure requiring emergency dialysis in May 2001.

Ten of the 12 jurors did agree that Humana was among three of the named defendants who bore responsibility for Joan Smelik’s death. The plaintiffs alleged that Joan Smelik did not receive the health care promised by Humana’s own written policies and standards. Specifically, the plaintiffs demonstrated through testimony that Mrs. Smelik was suffering from emphysema, kidney disease, and a circulatory condition that affected the kidneys and should have been closely monitored in the months before her death.

“This jury has saved lives,” added Jon Powell. The jury forced Humana to go back and actually implement its policies and procedures that supposed to be aimed at making sure members with chronic health problems receive the health care and treatment that they need in order to survive.”

Along with Humana, the lawsuit named as defendants two doctors, Dr.
Michael W. Mann and Dr. Fred C. Campbell Jr., and the Alamo City Medical Group, P.A., which was Mann’s employer and the corporate health care provider under contract to Humana. Campbell cared for Mrs. Smelik under another health insurance provider.

Prior to the trial, which began June 13, all the defendants had agreed to out-of-court settlements with the Smelik family, except for Humana. The earlier settlements totaled $602,000. Nonetheless, jurors were required by law to attribute blame for the negligence among all the defendants.
Specifically, the jury found that Humana was 35 percent responsible, Mann was 50 percent responsible and Alamo City Medical Group was 15 percent responsible. Campbell was not assessed any blame by the jury.

“This case sends a clear message that when an HMO promises to manage care, then they have to do it. And when HMOs fail to do that, the court system will hold them responsible,” said Renee F. McElhaney.

A 2004 U.S. Supreme Court decision in Aetna vs. Davila made it more difficult for disgruntled patients to sue HMOs, such as Humana, in cases where plaintiffs who receive their health plans from employers are claiming a denial of medical care. The high court ruled those cases fall under the Federal Employee Retirement Income Security Act (ERISA), which applies to most of the millions who receive HMO care through their employers and limits the amount of damages that can be recovered in a negligence lawsuit to actual losses. Smelik v. Humana was pleaded as a mismanaged Managed Care case. The Smelik verdict potentially gives new hope to HMO enrollees who are under ERISA and believe that Aetna v. Davila pre-empts their ability to sue their HMO when HMOs demonstrate negligence, fraud, substandard care or denial of benefits.

“Joan’s case will empower people across the country to take back their right to quality affordable health care,” said John Smelik. “People should spend less time having to do battle with their HMOs and more time preventing illness. The system is sick and needs to be fixed so that enrollees who pay their premiums are able to rely on their health care providers. According to the experts who testified in this case, my wife should be alive today had Humana exercised ordinary care in performing its obligations in managing care. Instead, Humana paid for prescribed medications that caused kidney damage and failure; then they let her die claiming that she did not qualify for Case Management and kidney dialysis treatments.”

The Smeliks alleged that the care delivered by Humana and its physicians to Joan Smelik was substandard. Testimony showed that Mrs. Smelik had been under case management when Humana had outsourced that service to another health care provider. But when that contract ended and Humana began handling case management on its own, Mrs. Smelik’s case was not given the necessary extra oversight. Previously, employer based HMOs’ denial of health care benefits had been largely shielded from regulation by state legislatures with the Supreme Court decision in Aetna v. Davila. Now, the Smelik verdict empowers individuals to fight against HMOs when the HMOs are focused more on saving dollars than on saving lives.

“This jury verdict shows that people enrolled in HMOs, even those insurance plans bought through their workplaces, can still turn to state courts, and ask a jury of their neighbors, to hold HMOs accountable for mismanaged managed care,” commented Brant Mittler. “Joan Smelik should have been a managed care success story. Instead she was a managed care failure.”

SOURCE> The Powell Law Firm, San Antonio, Texas



Jon Powell, J.D., Lead Plaintiffs’ Attorney, +1-210-225-9300, Cell:

Brant S. Mittler, M.D., J.D., Plaintiffs’ Attorney, +1-210-408-1189,
Cell: +1-210-827-4246,

Renee F. McElhaney, Plaintiffs’ Attorney, Cox Smith Matthews Incorporated,

John Peter Smelik, Husband of Joan Smelik, +1-830-885-2462,