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Finance, providers issue brief: insurer liability
Issue Brief (Health Policy Tracking Service)
|November 10, 2000
Summary
Health plans denying necessary procedures may face medical malpractice lawsuits. States are debating legislation to hold insurance carriers liable for patient harm, moving beyond traditional corporate practice of medicine defenses.
Area of Science:
- Healthcare Law
- Medical Malpractice
- Insurance Regulation
Background:
- Health plans denying procedures or referrals raise questions about practicing medicine.
- Patient harm resulting from such denials prompts liability concerns for insurers.
- Managed care industry power is under scrutiny by physicians and patients.
Purpose of the Study:
- To examine the legal and ethical boundaries between insurance judgments and medical practice.
- To assess the potential for health plans to be held liable for medical malpractice.
- To analyze legislative trends in holding insurance carriers accountable for patient harm.
Main Methods:
- Analysis of state legislative debates and actions concerning managed care liability.
- Review of traditional legal defenses for health insurers, such as 'corporate practice of medicine' bans.
- Examination of evolving legal theories, including vicarious liability and direct malpractice claims against plans.
Main Results:
- 35 states considered these issues in 1999, with at least 32 actively grappling with them currently.
- Traditional laws protected insurers, limiting recourse to vicarious liability claims against providers.
- Legislative momentum is building to extend malpractice liability to insurance carriers and plans.
Conclusions:
- The line between insurance decision-making and medical practice is increasingly blurred.
- There is a significant shift towards holding health plans directly liable for patient harm.
- New legislation aims to expand malpractice accountability beyond individual practitioners to the corporate level.