Managed care under fire

A recent flurry of activity in terms of litigation and legislation involving the managed care industry has produced mixed results. Common trends among actions include delayed or diminished payment and network termination, breach of fiduciary duty, negligence in plan administration, breach of contract and fraud, and prompt pay among physician cases, among plan member cases, and among regulatory enforcement cases. The results indicate that physicians face an uphill battle in their efforts to sue managed care organizations for financial causes, although they generally fare better if state regulators adopt their cause; plan members are somewhat more successful than providers, particularly in situations where an alleged denial of care results in injury; by far, the most successful litigant against managed care has been state enforcement agencies, as the states have been particularly successful in actions enforcing their prompt payment regulations. However, the managed care industry has done well in warding off suits against plan members under the Employee Retirement Income Security Act's pre-emption provisions. Despite the somewhat varying degree of success, it appears that there is a perception among managed care enrollees, providers of care, and state and federal regulators and legislators that the managed care industry is wrongfully enhancing its bottom line at the expense of members' health.