HMO'S And The Law

There are many different types of health maintenance organizations (HMOs). The Illinois Supreme Court has determined that HMOs that contract with independent physicians can be held liable for medical malpractice. Under the theory of "apparent authority," an injured patient may be able to hold an HMO liable for physician malpractice by a physician who was an independent contractor of the organization if the patient can prove that (1) the HMO held itself out as the provider of health care, without informing the patient that the care will be given by independent contractors, and (2) the patient justifiably relied upon the conduct of the HMO by looking to the HMO to provide health-care services, rather than to a specific physician. The second element of this test, however, cannot be met where a patient selects his or her own personal physician.

An injured patient may also be able to hold an HMO liable for medical malpractice by an independent contractor of the HMO where the patient can establish implied authority. Where an HMO effectively controls a physician's exercise of medical judgment, and that judgment is exercised negligently, both the physician and the HMO may be held liable for the harm that results. The supreme court has also recognized that HMOs can be held liable for harm that results from their institutional negligence. HMOs commit institutional negligence when they do not act reasonably.

In a recent Illinois case, the mother of an infant who became permanently brain damaged from bacterial meningitis, which was contracted after the infant's ear infection was not diagnosed in time, made a claim for institutional negligence against her HMO. The infant's mother had contacted the primary care physician assigned to her by her HMO. She was not instructed to bring the child in for an examination on that day but was instructed by a nurse, and later by the doctor, to give the infant castor oil. The next day, the mother brought the infant to the hospital emergency room where the infant was diagnosed with bacterial meningitis due to an ear infection. As a result of the meningitis, the child was permanently disabled.

The Illinois Supreme Court ruled that the mother should be permitted to take her case against the HMO before a jury because she had sufficient evidence that the child's injuries were caused, at least in part, by the HMO's institutional negligence. The court reached this conclusion because the mother had evidence that the HMO negligently assigned more enrollees to the doctor than he was capable of serving, and that the HMO negligently adopted procedures that required the mother to call first for an appointment before visiting the doctor's office.

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