The legal challenge to ERISA preemptions

Managed care, once celebrated as a vehicle to halt the increasing cost of health care, has come under increasing fire from patients and health care providers, accused of cutting costs and managing care at the expense of patients. The Employee Retirement Income Security Act of 1974 (ERISA) has been a shield for managed care organizations (MCOs), buffeting them from liability for quality-of-care issues. Lawsuits and legislation are chipping away at the protective shield of ERISA as MCOs find themselves more liable for their decisions and for the care provided by physicians with whom the MCO contracts and provides financial incentives for controlling cost of medical care.