ASHINGTON, Feb. 17 — A federal appeals court has expanded patients' rights, ruling that consumers can sue a health insurance company for injuries resulting from the company's refusal to authorize medically necessary treatment.

The ruling, issued last week by the United States Court of Appeals for the Second Circuit, in New York, said that health maintenance organizations and their medical directors could be sued for medical malpractice when they made decisions about the treatment of a patient.

In the past, courts have often rejected such claims, saying they were precluded by the federal law on employee benefits. But the appeals court said those precedents were no longer binding because the Supreme Court had established a new framework for analyzing the issue in a 2000 case, Pegram v. Herdrich.

The Supreme Court held then that some decisions involved both an interpretation of an insurance contract and the exercise of medical judgment about how to diagnose and treat a patient's symptoms. The appeals court said H.M.O.'s could be held accountable for such "mixed eligibility and treatment decisions" under state standards of medical malpractice.

David L. Trueman, a lawyer who filed the suit, said today: "This ruling means that there's now no barrier for anyone in New York, Connecticut or Vermont to sue an H.M.O. when the health plan denies treatment recommended by a doctor. Millions of consumers have a right they did not have before."

The case, Cicio v. Vytra Healthcare, involved Carmine Cicio of Suffolk County, N.Y., who had a form of blood cancer known as multiple myeloma. In 1998, his oncologist wrote a letter to Vytra seeking approval to treat Mr. Cicio with high-dose chemotherapy and a double infusion of Mr. Cicio's own stem cells. The chemotherapy destroys not only cancer cells, but also normal blood-producing cells in the bone marrow. The stem cell transplants replace normal cells killed in chemotherapy.

Mr. Cicio's doctor said the procedure was "a well-established method of treatment" that offered a better chance of survival than any other therapy. But Vytra's medical director, Dr. Brent W. Spears, denied the request. The procedure, he said, was experimental and therefore was "not a covered benefit."

After an appeal by Mr. Cicio's doctor, the company approved a different treatment, chemotherapy with a single infusion of stem cells, which doctors say is often less effective.

Mr. Cicio died in May 1998. His widow, Bonnie Cicio, sued Vytra and Dr. Spears, saying her husband might have survived if the H.M.O. had promptly approved his treatment, rather than waiting two months.

Vytra, like many insurers haled into court, said the claims were barred, or pre-empted, by the federal law on employee benefits, the Employee Retirement Income Security Act of 1974, known as Erisa.

But the appeals court rejected that argument. "A state law malpractice action, if based on a `mixed eligibility and treatment decision,' is not subject to Erisa pre-emption when that state law cause of action challenges an allegedly flawed medical judgment as applied to a particular patient's symptoms," said the opinion, by Judge Robert D. Sack.

Dr. Spears was not Mr. Cicio's treating physician, but he apparently made a medical decision, denying one treatment and prescribing another, the court said.

"The plaintiff has alleged more than an adverse benefits decision," Judge Sack declared. "She has also alleged that the defendants made a negligent medical determination with respect to the treatment of her late husband." If Vytra and Dr. Spears were making a medical decision, they may have had a duty to meet the standard of care defined by state law, the court said.

The ruling applies throughout the second circuit, which covers New York, Connecticut and Vermont. But the opinion is likely to influence judges in other parts of the country because it comes from a respected court and provides a comprehensive analysis of H.M.O. liability after several recent Supreme Court decisions.

The decision was issued by a panel composed of Judges Sack, Barrington D. Parker Jr., and Guido Calabresi. Judge Calabresi issued a partial dissent, saying health care providers should not have to face a "patchwork of liability risk" in different states.

Erisa, the federal law on employee benefits, was for years seen as a major barrier to compensation for injuries caused by the cost-control activities of H.M.O.'s. Workers and their dependents could recover the cost of a service improperly denied, but could not recover damages for lost wages, pain and suffering or wrongful death.

In an influential 1992 decision, the United States Court of Appeals for the Fifth Circuit, in New Orleans, considered the case of Florence Corcoran. Her fetus died after United Healthcare refused to approve a hospital stay recommended by her obstetrician in the final weeks of a high-risk pregnancy. Mrs. Corcoran and her husband sued United.

Because of Erisa, the court said, "the Corcorans have no remedy, state or federal, for what may have been a serious mistake." But the federal appeals court in New York said the Corcoran case was decided before the Supreme Court changed the legal landscape with its ruling in the Pegram case.