AETNA HEALTHCARE INC. VS. JUAN DAVILA

, however, required Davila to try a less expensive drug first under Aetna's "step program" before Aetna would agree to pay for Vioxx. Soon thereafter, Davila experienced a severe reaction to the less expensive drug that required extensive treatment and hospitalization (Juan Davila V. Aetna U.S. Healthcare, Inc., 2002).

Major Actions and Findings Associated with the Case

Davila sued Aetna, in a state court in Texas under the Texas Health Care Liability Act (THCLA). The THCLA requires that health plans exercise ordinary care when marking health care treatment decisions. Davila claimed that administrators at Aetna were controlling health care decisions (as opposed to physicians), and that this action violated the requirement to exercise ordinary care as required by the THCLA (Juan Davila V. Aetna U.S. Healthcare, Inc., 2002).

Aetna was successful in moving the case to federal court from the state court. The United States District Court of Northern Texas found in favor of Aetna's contention that the federal Employee Retirement Income Security Act (ERISA) preempted the THCLA claim. Davila appealed to the United States Court of Appeals for the Fifth Circuit. The Court of Appeals for the Fifth Circuit reversed the District Court decision, and remanded the case to the District Court for further proceedings (Juan Davila V. Aetna U.S. Healthcare, Inc., 2002). Aetna then appealed to the United States Supreme Court.

The United States Supreme Court agreed to hear the case.


This outcome can be viewed as a significant disadvantage for private health care consumers because the ruling severely restricts the ability of private healthcare consumers use the ERISA to challenge the actions of managed care companies for violations of care contracts (Andriloff, 2004).

This case is one of many that continue to refine the relationship between health care consumers and managed care organizations. Managed care is the "backbone of health care delivery in the United States" (Wells, Astrachan, Tischler, & Unutzer, 1995, p. 57). Managed care has two goals in particular to control health care costs and to provide quality services that are sufficient enough to satisfy the enrollees. Several strategies based on direct control of care and indirect economic incentives are used. Newer payment incentives have replaced traditional insurance mechanisms as cost control procedures in the managed care environment. Waitzkin (1994) concluded that managed competition, or managed care, as a basis for national health care reform may lead American health care "down a path inconsistent with the aspirations of many health workers and patients" (p. 488).

Benko, L. B. (2005, February 7). Upon further review. Modern Healthcare, 35(6), 28-32.

The United States Supreme Court rejected plaintiff assertions that the decision of the Aetna administrators had the effect of directing specific medical care. The Court ruling stated, "The fact that a benefits determination is infused with medical judgments does not alter this result" (Aetna Healthcare Inc., FKA Aetna U. S. Healthcare Inc. et al. V. Juan Davila, 2004). The Supreme Court reasoning reinforced the Aetna argument, supported to the Bush Administration, that fiduciary actions, even when medical judgement are involved, take precedence over medical decisions.

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