Magazine article Risk Management

HMO Liability: The Doctor Employer Is In

Magazine article Risk Management

HMO Liability: The Doctor Employer Is In

Article excerpt

Listening to consumer complaints about the lack of competent and specialized medical care in HMOs conjures up a paraphrase of Groucho Marx: I wouldn't want to join any health care plan that would have me as a member. Consumer complaints about health care have gotten so loud that even The New York Times has taken pity on HMOs. A recent "Week in Review" section piece entitled "Whiplash: In Health Care Be Careful What You Wish For" argued that the "consumer backlash" against HMOs may result in more restrictive health plans. The author summed up: "The dilemma is accountability versus choice." Most federal and state legislatures could have told you this months ago. HMO liability, or, depending on your viewpoint, patient rights, has been one of the hottest legislative topics of 1998.

Texas has the dubious distinction of being the first state to pass an HMO liability law. In 1997, the Texas legislature enacted SB 386 and created the new tort of HMO liability for medical negligence (must have been drafted, by an Aggie). Under the law, employers that self-insure and operate plans under the ERISA preemption could be held liable for a doctor's negligent decisions. As health care plans could now present an increased liability risk to companies, they become more and more of a risk management issue.

Not surprisingly, some RIMS members in Texas were among the first to become active in opposing PARCA, the Patient Access to Responsible Care Act (HR 1415), which is pending in Congress with over 200 bipartisan cosponsors. Under PARCA, employers across the country could be subject to the same liability imposed by the Texas bill. Perhaps in response to employers' concerns about Texas-type liability, PARCA sponsor Rep. Charles Norwood (R-GA) has also introduced H.R. 2960, the Responsibility in Managed Care Act, which would exempt employers from liability if managed care plans are sued for malpractice. However, an amendment to H.R. 1415 alters ERISA to require group health plans operating under the ERISA preemption to comply with PARCA's managed care reforms and any' corresponding state laws that are stricter than or equal to PARCA.

Several of RIMS' key states have debated similar legislation. Last year, New York considered SB 3019, which would have allowed suits for medical negligence against some health care providers. Luckily, the bill never moved out of the Judiciary Committee. Overall, about half of the states have considered anti-managed care legislation this year. Three states where such legislation has come close to passage were California, Illinois and Pennsylvania. …

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