Even if that is proven, ERISA limits damages… [ensuring] the HMO will not be punished" in a substantive fashion (ERISA, 2004, HARP).
However, some state courts, despite ERISA have held HMOs directly liable for negligent treatment of their members, such as when an HMO refused to grant a patient the 30 days of inpatient psychiatric care his doctor said he required and only covered 10 days. The California court "ruled that an organization, such as the patient's HMO, that substantially shaped the course of patient care could be held liable for the quality of the care actually delivered… a Pennsylvania court also held that an HMO could be held liable for injuries to its members as a result of its hiring incompetent physicians" (HMO malpractice, 2009, Mega Justice). In these instances, the HMO was held directly responsible for denying coverage or the actions of member physicians.
Some have also suggested that being able to sue HMOs under the concept of enterprise liability would be helpful in curtailing costs: "Under the enterprise liability theory, responsibility and liability for medical malpractice shifts from the individual physician to the health maintenance organization (HMO) and effectively provides immunity to individual physicians from medical malpractice actions"(Leone 1993). These would consolidate lawsuits against physicians and also hold HMOs accountable for their action as the ostensible or de facto agency making the decisions for a patient's healthcare. While greater liability would act as an incentive for HMOs...
But on a state-by-state basis "there has been an increasing number of lawsuits brought against HMOs and won, including a record $16 million suit brought against Prudential in 1992 and a $600,000 suit brought in 1992 against a neurosurgeon whose failure to properly diagnose a medical condition left the plaintiff a quadriplegic"(Hawn 2004).
References
Armon, Bruce D. & Howard A. Miller. (2001 July). Building a successful IPA. Physician News.
Retrieved October 3, 2010 at http://www.physiciansnews.com/business/701.html
Hawn, Daniel. (2004, December 8). HMO Malpractice. Retrieved October 3, 2010 at http://www.lawyershop.com/2004/12/08/hmo-malpractice/
Health Administration Responsibility Project: ERISA Outline. (2004). Health Administration
Responsibility Project. Retrieved October 3, 2010 at http://www.harp.org/erisa.htm
Leone, Armand. (1993, November 8). ADR and enterprise liability. New Jersey Law Journal.
Retrieved October 3, 2010 at http://www.medmalnj.com/index.php?option=com_content&view=article&id=94&Itemid=60
Medical malpractice. (2009). Mega Justice. Lexus-Nexis. Retrieved October 3, 2010 at http://www.megajustice.net/newsletters/Medical-Malpractice/index9eb3.html?launch_pg=NewsletterDetailLayout&launch_sel=1000296&title=HMO+Malpractice%3F
