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The impact of state managed care liability statutes
1Wake Forest University, Winston-Salem, North Carolina, USA.
Health Affairs (Project Hope)
|October 1, 2003
Summary
State statutes creating managed care organization liability have spurred little litigation. The high costs and complexity of suing health plans, not ERISA preemption, deter lawsuits, suggesting federal laws must enable class actions to increase liability.
Area of Science:
- Health Law
- Tort Law
- Managed Care
Background:
- Managed care organizations (MCOs) face increasing scrutiny regarding patient harm.
- Ten states enacted statutes creating MCO tort liability since the mid-1990s.
- Federal legislation for MCO liability has been considered.
Purpose of the Study:
- To evaluate the impact of state MCO liability statutes on litigation.
- To assess changes in liability exposure for managed care organizations.
Main Methods:
- Analysis of litigation data following the enactment of state MCO liability statutes.
- Review of legal precedents and scholarly commentary on MCO liability.
Main Results:
- State statutes have resulted in minimal litigation activity.
- These statutes have not fundamentally altered MCO liability exposure.
- Barriers to litigation include high costs and complexity of suing health plans, rather than ERISA preemption.
- Prior large-scale federal class actions and significant state punitive damage verdicts are primary drivers of liability concerns.
Conclusions:
- State MCO liability statutes have had a limited impact on litigation.
- Federal liability statutes are unlikely to significantly increase MCO liability exposure without provisions for class-action lawsuits.