US Supreme Court bars federal lawsuits against HMOs

The Supreme Court in the United States, in a unanimous decision, ruled that patients could not sue their health maintenance organisation (HMO) in federal court for giving doctors financial incentives to cut medical costs.

Justice David Souter wrote for the court, “No HMO organisation could survive without some incentive connecting physician reward with treatment rationing.”

The case at issue was that of Cynthia Herdrich, a former legal secretary from Bloomington, Illinois. She was covered by the Carle Clinic Association, a health maintenance organisation, through her husband's employer, State Farm Insurance.

In March 1991 she …