USA Today, the Washington Post, and the Los Angeles Times lead with the Supreme Court’s unanimous ruling Monday that patients cannot use the federal law covering employee benefit plans to sue HMOs for awarding bonuses to doctors who skip diagnostic tests and otherwise cut treatment costs. The decision also sits atop the Wall Street Journal’s front-page worldwide news index box. The New York Times puts the HMO decision just above the fold and goes instead with the arrival in Pyongyang of President Kim Dae Jung of South Korea for talks with North Korea’s President Kim Jong Il, the first-ever meeting between leaders of the two Koreas, a story fronted by the LAT and in the No. 2 position in the Journal’s world news box, but stuffed otherwise.
The WP puts the HMO decision in the starkest terms when it explains that the court ruled that HMOs cannot be sued in federal court over care-rationing incentives for their physicians “even if a patient is harmed when a physician withholds care.” The WP and LAT explain high up that patients can still sue doctors in state courts for medical malpractice. (And can also sue the HMOs in the courts of those states that explicitly allow that.) The WP adds that patients will also still be able to sue HMOs in federal court in certain special circumstances, such as when they believe they have been unjustly denied benefits. (The NYT makes the point that the decision leaves cloudy the question of when plaintiffs have to proceed in federal court even though they might prefer to go to the state courts instead.) Also, the LAT says high up, the ruling doesn’t prevent Congress from passing a law in response saying patients can sue their HMOs. But the court’s view, the papers all explain, is that HMOs would be undermined if their defining principle, that of rationing care, could be subject to federal lawsuits.
The NYT lead reports that the North’s Kim met the South’s Kim at the airport, which wasn’t expected, and that the two men had a long handshake, and smiled and chatted as they walked to a limousine. According to the paper, the two men are planning to meet alone at least twice. Big talking point: whether or not North Korea is willing to abandon missile and other weapons programs in return for help for its zeroed-out economy from the relatively prosperous South.
USAT banners the top front with “US NUCLEAR SECRETS MISSING” over news–also fronted by everybody else–that two computer hard drives “containing some of the nation’s most precious nuclear secrets” have been missing since May 7 from the government’s Los Alamos, N.M., bomb lab. That’s when the lab was being evacuated as wildfires approached. The drives contain information about U.S. weapons needed to render them safe, and they were intended for the Nuclear Emergency Search Team to use in an emergency or terrorist crisis. The NYT says the hard drives also include information about Russian nukes. USAT comes out of its story with a rather important fact about the flap it should have put higher: The Department of Energy wasn’t notified about the drives until June 1, and the FBI wasn’t told until the day after that–nearly a month after the drives were discovered missing. Everybody observes that this mess comes on the heels of the security questions already raised about the lab by the Wen Ho Lee case.
The NYT off-leads a nice primer on stock options. The gist: Options help lower a company’s labor costs and tax bill. The former because when options are part of the compensation, salaries don’t need to be as high. The latter because when options are exercised, the tax on the capital gain is paid by the employee and is taken as a deduction by the company. This year for instance, says the Times, both Cicso Systems and Microsoft are, thanks in part to exercised options, well on their way to owing no federal income tax. The little-noticed bad side, the paper observes, is when the company’s fortunes flatten out. When the stock follows suit, the options don’t get exercised at the same high rate, thereby raising the company’s tax bill and creating upward pressure on employee salaries.
Everybody reports that the DOJ put an end to 20 years of litigation by paying the Richard Nixon estate $18 million for the papers and tapes it seized from Nixon to prevent him from destroying them when he resigned from office in 1974. Nixon had been seeking $200 million. More than $7 million will go to the Nixon lawyers. Another $6 million or so will go to the Nixon Library.
The WSJ “Work Week” column reports that the Minnesota board in charge of licensing cops has proposed accepting as officers folks who have misdemeanor theft convictions of less than $200. Why? Because the board members felt that the old no-convictions rule “disqualified too many minorities.” The paper should have limbered up a dialing finger to get Jesse’s reaction.