Insurance

HMO Liability for Injuries on Denials of Coverage

Have you been injured or lost a loved one because a health maintenance organization ("HMO") delayed or denied a test, referral, or treatment? It's understandable to feel angry and want to sue the HMO for their part in the injury or death. But it's a lot more difficult than you might expect to successfully sue an HMO.

Can You Sue an HMO? Maybe

Many of us, especially if we work or are dependent on someone who does, belong to an HMO. HMOs often provide the health care benefits some workers receive. This is the reason why, in most states, you can't sue an HMO if you're injured by a denial of treatment or other problem.

Many courts have ruled that HMOs can't be sued for negligence or malpractice. They've ruled that HMOs are an employee benefit plan covered by the federal Employment Retirement Income Security Act of 1974 ("ERISA"). This means the doctrine of federal preemption applies. State law doesn't apply to employee benefit plans.

So ERISA provides the only rights members of HMOs have. ERISA doesn't allow plan participants to recover money for denials of coverage.This means you can only bring a lawsuit in state court against the doctor, not the HMO.

Other courts though have ruled differently. In at least eight states - Arizona, California, Georgia, Maine, Oklahoma, Texas, Washington and West Virginia - you can sue HMOs in medical malpractice cases. If this seems odd, it is. The law hasn't been decided by the US Supreme Court. Until it has, this difference in how lower courts view ERISA can continue.

Some state laws hold health plans liable for patient harm when they have failed to exercise what's called ordinary care in making treatment decisions. This makes HMO plans liable for harm caused by treatment decisions made by employees, agents or representatives over whom they had influence or control. And in some states, HMOs can't drop a doctor from its panels or refuse to renew a doctor's contract because he or she stuck up for a patient.

Possible Claims against HMOs

If you're lucky enough to live in one of the states that allows lawsuits against HMOs, you may be able to sue for malpractice if you can show that your HMO or insurance company:

  • Denied medical care you needed or delayed approving medical tests or other treatment
  • And the delay or denial caused your injury

What You Can Sue For

In states allowing lawsuits against HMOs, you can recover for several items. These include the cost of additional medical treatment, lost wages (current and future) and the pain and suffering resulting from your injuries. In some states, you may also be able to recover punitive damages. These are allowed to punish the HMO or insurance company for outrageous practices.

If you believe an HMO or insurance company has injured you or a loved one, it's best to consult with an attorney right away, as there are often short time limitations on when you can bring a lawsuit. Once those time deadlines have run, you won't be able to sue the HMO.

Questions for Your Attorney

  • How do I appeal a denial of coverage or treatment?
  • If I live in a state where I can't sue an HMO for denial of coverage, can I sue in a state that allows such suits?
  • Do the same rules apply to non-HMO providers, like group health insurance?
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