Who gets sued: Managed care or me?

David J. Goldberg, M.D., J.DDr. Dave believes that Mohs surgery is medically necessary for his patient’s squamous cell carcinoma of the ear. He seeks precertification of this from his patient’s healthcare plan. After receiving relevant medical records on the patient, the health plan, through its medical director, denies the request. 

The dermatologist makes a second request for the procedure three months later. Three months after the second request, after rethinking about the patient’s medical condition, the medical director approves treatment by desiccation and curettage. Because of the delay in treatment, the patient suffers metastases to the local lymph nodes. Dr. Dave’s patient brings a lawsuit against Dr. Dave and the plan. The state court throws out the case against the plan and lets the lawsuit proceed against Dr. Dave. Dr. Dave asks, “Why me?” 

Much has been written and discussed over the last decade about accountability. We have seen the scandals and business improprieties involving numerous corporations. Among the many political hot button items in the past presidential race, the issue of corporate accountability was discussed and debated. Accountability has been a buzz word in the healthcare industry for years. Particularly as it applies to the issue of liability for medical decision making in the care and treatment of healthcare plan enrollees and beneficiaries.  

The failures of numerous corporations has sparked calls and action for CEOs and corporate boards to be held accountable to those they serve. CEOs and corporate boards have been asked to establish mechanisms by which they can oversee the activities of their business practices. It can be argued that such vigilance is also required for managed care entities.

It is this group of corporations that often decides what is or is not medically necessary for our patients. Yet, such vigilance is generally not seen in the “managed care industry”. 

Healthcare accountability is clearly already in place for physicians, hospitals and other traditional healthcare providers. But the accountability of managed care “corporations” has never been well quantified. 

This started to change over a decade ago when the United States Supreme Court in a June 2002 decision did not reverse an Illinois law that provided for independent review of disputes between primary care physicians and health maintenance organizations over the medical necessity of a covered service. 

The language of the Illinois HMO statute read as follows: 

“Each Health Maintenance Organization shall provide a mechanism for the timely review by a physician holding the same class of license as the primary care physician, who is unaffiliated with the Health Maintenance Organization, jointly selected by patient … primary care physician and the Health Maintenance Organization in the event of a dispute between the primary care physician and the Health Maintenance Organization regarding the medical necessity of a covered service proposed by a primary care physician. In the event that the reviewing physician determines the covered service to be medically necessary, the Health Maintenance Organization shall provide the covered service.”

The Supreme Court, in upholding the Illinois statute, looked at the role an HMO-type entity plays in healthcare delivery. It suggested that the responsibilities of the HMO to its enrollees are analogous to those of a hands-on treating physician. 

The Court further suggested “that when an HMO guarantees medically necessary care, determinations of coverage cannot be untangled from physicians’ judgments about reasonable medical treatment.” The managed care organization may be held to the same standard of care as are physicians. 

Cases against health plans based, in whole or part, on the medical decision making process have generally been thrown out of court. 

The tide is starting to change. 

With time, disgruntled patients will increasingly be able to sue their managed care plans with the same vigor that is used against their physicians.

In the end, Dr. Dave may be held accountable despite the procrastination and poor quality of care provided by the managed care plan. He must be certain that his patient is fully aware of the facts. Eventually, because of new legislation, patients may begin to realize that their gripe should often be with the managed care plan and not with physicians like Dr. Dave.