Recent developments in HMO malpractice liability: Chase v. Independent Practice Association

The court's decision in Chase demonstrates that an HMO or independent practice association need not incur liability for the negligence of a physician if the arrangement between the entity and the physicians who provide services on its behalf is properly structured and maintained. IPA's successful defense of this lawsuit was based upon: (1) careful structuring of an independent relationship with the medical group, including appropriate wording in the contract establishing the relationship; and (2) careful maintenance of the relationship consistent with the terms of the contract to avoid giving patients any reason to believe that an agency relationship existed.