Court decisions hold implications for managed care plans--Part one

The managed care industry--and HMOs in particular--is now facing the realities of a maturing business. Maturity has brought a competitive tension to the HMO/managed care field, one consequence of which is increased litigation, not only among HMOs but also between HMOs and their suppliers, customers, and indemnity insurers. Entanglement in the legal system is an outgrowth of efforts to gain or preserve a competitive edge, reduce costs, and attract customers. This article highlights selected legal developments from the past two years that reflect the causes and effects of this environment. Additional cases will be discussed in the March-April 1990 issue of the journal.