In a previous JADA article, 1 I explored the trend toward holding health maintenance organizations, or HMOs, legally responsible for medical malpractice, under the theory that HMOs are vicariously liable for the actions of their health care providers. A recent ruling by the Illinois Supreme Court demonstrates that HMOs also can be held accountable for negligence in administering a health plan.
In Jones vs. Chicago HMO Ltd.,2 the Illinois Supreme Court found that an HMO could be held liable for institutional negligence, also known as direct corporate negligence.
In this case, the plaintiff, Ms. Jones, telephoned the Chicago HMO primary care physician about her 3-month-old daughter. She said the child was ill, constipated, crying frequently and very warm. The physician advised her to give her daughter castor oil. The next day, Ms. Jones took her daughter to a hospital emergency room, where the child was diagnosed with bacterial meningitis, secondary to an ear infection. As a result of the meningitis, the girl now is permanently disabled.
Ms. Jones, who received benefits from Chicago HMO through public aid, sued the HMO and the primary care physician. In its agreement with the Department of Public Aid, Chicago HMO warranted that it was "able to provide the medical care and services required under this Agreement in accordance with prevailing community standards, and is able to provide these services promptly, efficiently and economically." In addition, the agreement stated that Chicago HMO should provide one pediatrician for each 2,000 enrollees under the age of 17 years.
One of Ms. Jones’ allegations was that Chicago HMO committed institutional negligence by assigning the primary care physician to the child while the physician was serving an overloaded patient population, and by adopting procedures requiring the mother to call first for an appointment before visiting the doctor’s office or obtaining emergency care.
The trial court granted summary judgment for Chicago HMO in this portion of the lawsuit, and an appellate court upheld this ruling. Ms. Jones appealed to the Illinois Supreme Court.
A majority of the Illinois Supreme Court justices held that Ms. Jones could proceed with her claim of institutional negligence against Chicago HMO. The court found that the doctrine of institutional negligence, which previously had been applied to hospitals, also should be applied to HMOs, which, like hospitals, consist of many people who play various roles in providing comprehensive health services.
The court also reasoned that, because HMOs have a wide role in arranging for and providing health services to their members, they have corresponding corporate responsibilities. Thus, the court concluded that HMOs have a duty to conform to the legal standard of reasonable conduct in light of the apparent risk and must act as would a "reasonably careful" HMO under the circumstances.
The court observed that, in a lawsuit for institutional negligence against a hospital, the standard of care applicable to a hospital could be proved several ways, and expert testimony is not always required.
In support of her claim that Chicago HMO assigned more patients to the child’s primary care physician than he could handle, Ms. Jones relied on testimony from Chicago HMO’s medical director that 3,500 was the maximum number of patients that should be assigned to one primary care physician. Chicago HMO even admitted that the maximum patient load described by the medical director represented a standard of care, and that a violation of that standard of care could affect the quality of patient care.
Chicago HMO’s records showed that the physician in this case had been assigned 4,527 members, and the physician estimated he was the primary care physician for an additional 1,500 members of other HMOs. He also said he maintained a private practice of non-HMO patients. Although he employed four part-time physicians, the evidence contained no explanation of whether those physicians assisted in treating Chicago HMO members.
The court observed that a lay juror could conclude that a physician who had thousands more patients than he could handle would not have time to treat all of them appropriately.
The court concluded that Chicago HMO had a duty to its enrollees to refrain from assigning an excessive number of patients to the primary care physician, in that it was reasonably foreseeable that assigning an excessive number of patients could result in injury because appropriate care might not be provided.
The court found that imposing this duty on HMOs would not be overly burdensome, and that public policy would not be well-served by allowing HMOs to assign an excessive number of patients to primary care physicians.
On the other hand, because Ms. Jones presented no standard-of-care evidence to support her claim that she should not have been required to call the primary physician first before going to his office or the hospital, the court upheld the summary judgment for the HMO on this part of her claim for institutional negligence.
The rationale for this was that she did not call an expert witness to testify on the standard of care. If there had been an expert witness, or other evidence in the record establishing a standard of care, the court may have determined that this also constituted negligence.
In making its ruling, the Illinois Supreme Court considered a similar case reviewed by a Pennsylvania appellate court. In Shannon vs. McNulty,3 the Pennsylvania court held that the doctrine of corporate liability, similar to the institutional negligence theory reviewed by the Illinois Supreme Court, could be applied to an HMO. In the Pennsylvania case, the court observed that while HMOs "do not practice medicine, they do involve themselves daily in decisions affecting their subscribers’ medical care."
These rulings indicate that, at least in some states, HMOs will not be allowed to escape responsibility for patient injuries that result from negligent administration of their health plans. In particular, the decision from the Illinois Supreme Court shows that HMOs can be held liable for overburdening a health care provider with so many patients that he or she is unable to treat each patient appropriately.
This is of particular interest to dentists, in that a number of dental provider contracts with insurers appear to place few limits on the number of patients that can be assigned to the dentist.
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