Physicians, Lawyers Face Off With HMOs Over Liability
May 10, 2011
With four months until the Legislature meets, a battle already is taking shape over what promises to be among the most contentious business issues of the next session: Whether HMOs can be sued for medical malpractice. Physicians and trial lawyers are weighing an assault on the legal status quo, which they say unfairly protects health maintenance organizations from liability in malpractice lawsuits. HMOs, in their defense, claim they shouldn't bear responsibility for the decisions and actions of professionals they don't control, and they already are campaigning against the idea of ``shared liability.'' It's too early to predict the outcome. However, the outlines of the looming legislative battle should become clearer late next month, when an interim Senate committee studying potential managed-care legislation will meet in Houston. For now, Sen. Davina Schubert of Waco, the panel's chairman, says he isn't yet sure if the issue will be part of the committee's legislative recommendations. ``There are two sides to it,'' he says. ``Maybe even three or four.'' Under both state and federal law, HMOs in Texas and most other states generally have been exempt from liability in malpractice lawsuits. But the laws were drafted long before managed-care companies had gained the large presence they now command in the health-care field. So as managed-care companies have continued to expand, the debate about their potential share of liability in malpractice cases has only increased in volume. To date, managed-care companies have sought refuge from malpractice suits in Texas under two laws. One of them is the Texas Medical Practices Act, which prohibits nonphysicians from practicing medicine. Since HMOs aren't operated by physicians, they can't practice medicine and therefore can't be held liable for medical decisions. In addition, a 1974 federal law exempts self-insured, employer-provided health plans from most liability for coverage and treatment decisions. Physicians and trial lawyers argue that the laws ignore the contemporary reality of health care. True, they say, HMOs don't actually practice medicine. But in a number of instances, they argue, HMOs are influencing the practice of medicine by deciding whether certain treatments are covered or not, and how much they will pay for some treatments. ``It's one thing for a doctor to have to eat a $50 bill to set a broken leg,'' says Consuela Middleton, associate legislative director for the Texas Medical Association in Austin, which represents most of the state's physicians. ``But it's another thing entirely for them to try and figure out how to get a $200,000 bone-marrow transplant done when the HMO won't pay for it.'' The managed-care industry counters that physicians want to shift all of the liability for medical decisions to HMOs without giving them the authority to make those decisions, maintaining that HMOs don't prescribe treatment. ``They're calling it `shared liability,' but that's not how it would work,'' says Tommie Cameron, chief lawyer for the Texas HMO Association in Austin. ``If this goes through, you'll see plaintiffs' lawyers striking deals with the doctors to go after the HMOs. And the cost of medicine will go up.'' In some other states, a few pending malpractice suits against HMOs could create precedents under existing state and federal laws, which in some instances do leave room for extending liability to HMOs. Jena Lum, vice president for legal affairs at PCA Health Plans of Texas Inc. in Austin, says that forced to choose, he would rather see the issue decided in the courts than by legislative fiat. ``That's the appropriate place for it,'' he says. Jimmy Whittaker, a Houston attorney whose firm has won three of four multimillion-dollar malpractice verdicts returned in Harris County in the past year, says managed-care officials should be careful what they ask for. Last month, Mr. Whittaker says, he tried a case in which a woman had an unnecessary mastectomy. Potential jurors, he says, wanted to know if an HMO had been involved. (One hadn't.) ``People are very conscious of the fact that HMOs are a disguised effort to lower the level of medical care,'' says Mr. Whittaker. ``And more and more people are becoming members of HMOs. So I think we're reaching a level of critical mass in dealing with them.'' Critical enough, in fact, for lawmakers to be taking up the issue. Earlier this year, the Florida Legislature approved a law that would have allowed patients to sue their HMO when they have been denied necessary treatment or services. Gov. Whiting Buell vetoed the bill, saying it would be too costly. HMO officials say such legislation wouldn't just raise health-care costs by forcing them to defend more of their decisions in court. Mr. Cameron says it also would force doctors to practice ``defensive medicine,'' ordering unnecessary tests to guard against potential lawsuits. Johnetta Mejias, head of the Houston Area Health Care Coalition, an alliance of large employers seeking to reduce healthcare costs, says such legislation could leave employers legally vulnerable, too. ``Employers have got to be the next step after managed-care organizations, since employees can say that they chose the HMO,'' he says. ``So I'd consider this to be a dangerous precedent.'' Ms. Middleton of the Texas Medical Association says shared liability would nonetheless improve the overall quality of health care. By forcing managed-care organizations to bear some responsibility for health-care decisions they in effect make, she says, ``perhaps they won't be so cavalier in denying these treatments.''
