Source: http://harp.org/tort.htm
Timestamp: 2019-04-24 12:08:57+00:00

Document:
Hughes v. Blue Cross of Northern Calif.
Ace v. Aetna, a disability case.
Though the California Knox-Keene act, (HSC #1371.25) may appear to rule out vicarious liability, it was held in McCall v. Pacificare that the HMO can be vicariously liable for acts of its agent. The act only prevents HMOs from requiring indemnification from its doctors.
Direct Liability = "corporate negligence"
California HMO members have a powerful new tool as of 1/1/2001, in Civil Code Section 3428 which makes an HMO liable for all damages resulting from a breach of the duty to exercise ordinary care in making its decisions.
Since this rule applies only to HMOs, it should be useful even against ERISA HMOs, since insurance regulations aren't preempted by ERISA.
So an HMO can be a defendant.
"Deprivation of goods or services necessary to avoid physical harm or mental suffering" WIC 15610.07.
Mental suffering is further defined as "fear, agitation, confusion, severe depression, or other forms of serious emotional distress that is brought about by...deceptive acts performed or false and misleading statements made with malicious intent..."
Financial Abuse, including wrongfully and knowingly retaining personal property.
including "failure to provide medical care for physical and mental health needs"
by any person "having care or custody" of the plaintiff.
Negligent selection, retention, employment, supervision, screening, monitoring, & evaluation.
Hospital is liable for malpractice by Agents, Ostensible Agents, and Independent members of the Staff! Even if MD was selected by patient!
Is this weakened by "Any Willing Provider" laws?
Negligence per se by violating laws, eg: Bergeson Bill in California.
Does HMO force 'family' doctors to do procedures beyond their training & competence, in order to avoid referral to expensive specialists?
UR-forced early discharge led to injury.
"Third party payors of health care services can be held legally accountable when medically inappropriate decisions result from defects in the design or implementation of cost containment mechanisms as, for example, when appeals made on a patient's behalf for medical or hospital care are arbitrarily ignored or unreasonably disregarded or overruled."
MD didn't appeal MediCal's UR decision.
Policy allowed 30 hosp. days for depression. MD requested it. Gratuitous UR denied it. Pt. committed suicide after discharge.
"The language in Wickline which suggests that civil liability for a discharge decision rests solely within the responsibility of a treating physician in all contexts is dicta." So court found BC's refusal to pay, a "substantial factor" in P's death.
Note also poss. breach of contract.
HMO refused referral to specialist. Patient paid & was successfully dx'ed & rx'ed. Court found statutory duty to administer a complaint system in good faith. Found evidence of Bad Faith by HMO.
An HMO's cost-containment system caused MD to give poor care.
Theory was rejected in Bush v. Dake, No.86-25767 NM-2 (Mich.,Saginaw Cty Cir Ct, 4/27/1989) requires evidence of negligence and causation.
See Rest.2d of Agency s.220 for factors.
Excellent discussion in Petrovich v. Share Health Plan, Illinois Supreme Court, #85726, 9/30/99.
For Employed MD's, agency should be clear-cut.
May be treated as Employee.
Who has control over the physical details of the work?
many of these are dictated by the HMO.
MD works in a clinic run by the HMO.
MD works regular hours set by HMO.
HMO may overrule MD recommended care.
HMO prescribes which MDs may be selected by members.
Does MD work for anyone other than the HMO?
Does MD receive income from other sources?
Is income fixed regardless of workload?
An HMO was found vicariously liable for the negligence of a medical consultant.
ERISA doesn't preempt vicarious liability causes of action against HMOs.
Often applied to Hospitals, why not HMO's?
"...an HMO may be held liable for MP under an Ostensible Agency theory where a pt looks to the HMO for care & the HMO's conduct leads the pt to reasonably believe that he...is being treated by an employee of the HMO."
The mere fact that acts are done by one whom the injured party believes to be the defendant's servant is not sufficient to cause the apparent master to be liable; [rather,] . . . [t]he rule normally applies where the plaintiff has submitted himself to the care or protection of an apparent servant in response to an invitation from the defendant to enter into such relations with such servant.
(2) whether HMO "holds out" the physician as its employee.
One Court found ostensible agency of a consulting radiologist becasue HMO advertised "complete health care services"
duty to share in the losses.
Capitation would certainly seem to qualify!
IPA not vicariously liable for MD's malpractice.
The HMO contracts to provide a patient with medical care. It can't escape that duty by delegating it to an independent contractor or anyone else. Degree of HMO control is irrelevant.
Many states have statutes requiring HMOs to provide medical care to their members. These statutory duties are generally non-delegable, as is asserted in Hughes v. Blue Cross of Northern Calif.

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