| Abstract: | Pegram v. Herdrich, ___ U.S. ___, 120 S. Ct. 2143 (June 12, 2000): An HMO cannot be liable for breach of fiduciary duty because of mixed eligibility decisions by its doctors, even if the HMO gives the doctors financial incentives to minimize care because treatment decisions made by an HMO through its physician employees are not fiduciary acts within the meaning of ERISA. Where eligibility for benefits depends upon decisions by doctors concerning their conclusions about when to use diagnostic tests, when to authorize consultations or make referrals, proper standards of care, whether a proposed treatment is experimental, the reasonableness of certain treatment, and the emergency nature of a condition, such "mixed eligibility decisions" are not fiduciary acts under ERISA, and an HMO will not be treated as a fiduciary to the extent it makes such decisions through its doctors. |
