On December 7, 1994, the U.S. District Court of the Northern District of Illinois ruled that ERISA preempts a participant in an ERISA plan from suing the plan's administrator under a state common law theory of respondeat superior (Rice v. Panchal, 875 F. Supp. 471 (N.D. Ill. 1994)) (see, “Recent Developments in Health Laws,” Journal of Law, Medicine & Ethics, 23 (1995): at 208). On September 12, 1995, the Seventh Circuit of the U.S. Court of Appeals reversed this decision and ordered that the case be tried in state court (Rice v. Panchal, 65 F.3d 637 (7th Cir. 1995)). The court held that the case had been improperly removed to federal court. The court of appeals stated that the federal court did not have jurisdiction because the plaintiff's claim did not fall within ERISA's provisions.

In this case, plaintiff David Rice brought a medical malpractice suit against two doctors who provided treatment to him in accordance with his ERISA insurance plan.

On September 18, 1995, the U.S. Court of Appeals for the Seventh Circuit handed down a decision in Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic (65 F.3d 1406 (7th Cir. 1995)) that sets two important precedents regarding the status of health maintenance organizations (HMOs) under antitrust law. Chief Judge Posner, writing for the court, concluded that HMOs do not constitute a market separate from the general market for medical services and that agreements, between HMOs in a region, to operate in separate areas constitute a prohibited form of market splitting.

This case primarily involves two HMOs in north central Wisconsin: one a subsidiary of Blue Cross, the other a subsidiary of the Marshfield Clinic. The Blue Cross HMO claimed that the Marshfield HMO had an illegal monopoly in the region's HMO market and therefore violated the Sherman Act (15 U.S.C. § 2 (1990)).

On August 29, 1995, the United States District Court for the Northern District of Ohio ruled that certain practices of Blue Cross and Blue Shield of Ohio (BCBSO) relating to the calculation of copayments on insurance claims violated provisions of ERISA, and thus BCBSO could be liable for unpaid benefits and breach of fiduciary duty (McConocha v. Blue Cross & Blue Shield of Ohio, 1995 WL 561444 (N.D. Ohio Aug. 29, 1995)). According to BCBSO's Explanation of Benefits and Schedule of Benefits, beneficiaries were responsible for a 20 percent copayment for hospital charges, and the remaining 80 percent of the Provider's Reasonable Charges would be paid by BCBSO. BCBSO negotiated with the hospitals to create discount agreements whereby the actual charge to BCBSO was less than 80 percent of the total amount of the hospital's charges. By this arrangement, BCBSO paid less than 80 percent of what patients were billed; concurrently, patients paid more than 20 percent of the amount ultimately paid to hospitals for their services.