107 F.3d 625 (8th Cir. 1997), 95-4029, Shea v. Esensten

Docket Nº:95-4029MN.
Citation:107 F.3d 625
Party Name:Dianne L. SHEA, individually and as trustee for the heirs of Patrick Joseph Shea, decedent; individually and derivatively on behalf of participants in the Seagate Group Health Plan, Appellant, v. Sidney ESENSTEN; Jeffrey A. Arenson; Family Medical Clinic, now known as Fairview Clinics, a Minnesota non-profit corporation; Medica, a Minnesota non-pro
Case Date:February 26, 1997
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 625

107 F.3d 625 (8th Cir. 1997)

Dianne L. SHEA, individually and as trustee for the heirs of

Patrick Joseph Shea, decedent; individually and

derivatively on behalf of participants

in the Seagate Group Health

Plan, Appellant,

v.

Sidney ESENSTEN; Jeffrey A. Arenson; Family Medical

Clinic, now known as Fairview Clinics, a Minnesota

non-profit corporation; Medica, a

Minnesota non-profit

corporation, Appellees.

No. 95-4029MN.

United States Court of Appeals, Eighth Circuit.

February 26, 1997

Submitted Nov. 21, 1996.

Page 626

Corey John Ayling, Minneapolis, MN, argued (John R. Schulz, on the brief), for appellant.

Aaron Mark Rodriguez, Minneapolis, MN, argued (Julie Fleming-Wolfe, on the brief), for appellees.

Before FAGG, WOLLMAN, and HANSEN, Circuit Judges.

FAGG, Circuit Judge.

After being hospitalized for severe chest pains during an overseas business trip, Patrick Shea made several visits to his long-time family doctor. During these visits, Mr. Shea discussed his extensive family history of heart disease, and indicated he was suffering from chest pains, shortness of breath, muscle tingling, and dizziness. Despite all the warning signs, Mr. Shea's doctor said a referral to a cardiologist was unnecessary. When Mr. Shea's symptoms did not improve, he offered to pay for the cardiologist himself. At that point, Mr. Shea's doctor persuaded Mr. Shea, who was then forty years old, that he was too young and did not have enough symptoms to justify a visit to a cardiologist. A few months later, Mr. Shea died of heart failure.

Mr. Shea had been an employee of Seagate Technologies, Inc. (Seagate) for many years. Seagate provided health care benefits to its employees by contracting with a health maintenance organization (HMO) known as Medica. As part of its managed care product,

Page 627

Medica required Seagate's employees to select one of Medica's authorized primary care doctors. Mr. Shea chose his family doctor, who was on Medica's list of preferred doctors. Under the terms of Medica's policy, Mr. Shea was insured for all of his medically necessary care, including cardiac care. Before Mr. Shea could see a specialist, however, Medica required Mr. Shea to get a written referral from his primary care doctor. Unknown to Mr. Shea, Medica's contracts with its preferred doctors created financial incentives that were designed to minimize referrals. Specifically, the primary care doctors were rewarded for not making covered referrals to specialists, and were docked a portion of their fees if they made too many. According to Mr. Shea's widow Dianne, if her husband would have known his doctor could earn a bonus for treating less, he would have disregarded his doctor's advice, sought a cardiologist's opinion at his own expense, and would still be alive today.

Initially, Mrs. Shea brought a wrongful death action in Minnesota state court. Mrs. Shea alleged Medica's fraudulent nondisclosure and misrepresentation about its doctor incentive programs limited Mr. Shea's ability to make an informed choice about his life-saving health care. Medica removed the case to federal court, contending Mrs...

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