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Supreme Court Decides Important HMO Case Involving Physician Incentives

Supreme Court Decides Important HMO Case Involving Physician Incentives


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by Mary M. Devlin, L.L.M.
A unanimous Supreme Court has ruled that treatment decisions made by a health maintenance organization?s (HMO) physician employees do not subject the HMO to liability for breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA). Justice David Souter wrote the opinion for the Court in Pegram v. Herdrich (No. 98-19 June 12, 2000), reversing the U.S. Court of Appeals for the Seventh Circuit.