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Reaching Compromise
on HMO Legal Accountability
February 2000 Government Relations Practice Directorate
Managed care reform conferees should support the House-passed legal
accountability provision. Only this provision ensures that patients are
afforded a remedy for their injury. If the Goss-Coburn-Shadegg
accountability provision is to be considered a reasonable compromise, it
must be improved. The Goss-Coburn-Shadegg provision does not yet offer a
reasonable compromise because within it:
- The "substantial harm" requirement excludes mental health injuries.
Unlike the House-passed accountability measure, the
Goss-Coburn-Shadegg provision bars patients, who have been injured by
the negligent denial or delivery of their mental health
treatment, from any legal recourse. Through its definition of
"substantial harm," the Goss-Coburn-Shadegg provision allows only
patients with physical injuries to seek remedy.
Patients can and do suffer devastating mental health diagnoses,
including major depression, phobias, and posttraumatic stress syndrome,
which have no "physical" component. If their managed health plan
negligently treats or denies covered treatment, they can experience
personal injury, become debilitated, lose their jobs, suffer with their
family, just as anyone with a physical injury. These patients should not
be barred from legal recourse. Rather, the conferees should adopt other
procedural provisions, such as strong internal and external appeals
procedures and reasonable judicial procedural limitations to prevent
frivolous lawsuits.
- The noneconomic damages cap potentially leaves children and
stay-at-home parents without adequate recourse
. The
Goss-Coburn-Shadegg accountability provision caps noneconomic damages.
Injured children and stay-at-home parents rely on noneconomic damages
for adequate recourse because they have virtually no economic damages.
The Goss-Coburn-Shadegg noneconomic damages cap leaves them with no or
very low damages, even for devastating injury. The final accountability
provision should not cap noneconomic damages. Rather, the final
accountability provision could protect employers and health plans from
exposure to potentially outrageous jury damages awards through
reasonable compromises that include punitive damages caps and that
permit separate proceedings to determine whether punitive damages should
be awarded.
- Patients have no recourse for the negligent delivery of care.
Patients are injured through both the negligent delivery of
care and the denial of care. The Goss-Coburn-Shadegg
accountability provision permits recourse only for the negligent denial
of care and therefore fails to recognize that patients can be injured
through the negligent delivery of care. For example, managed health
plans negligently deliver care through procedures that lead to a
misdiagnosis or which unduly delay treatment. The final accountability
provision should recognize both types of negligence.
- Patients are denied court access after adverse external review.
Patients should not, as in the Goss-Coburn-Shadegg provision,
be barred from any relief under the legal accountability provision
merely because an external appeal reviewer agrees with an HMO's
treatment decision or benefits' denial. An external appeal reviewer can
make mistakes too and should not act as a court of law to determine
causation or injury. Rather, a rebuttable presumption could be provided
for or courts could be required to give substantial weight to the final
external review decision, thus affording an additional barrier against
frivolous actions.
- While employers should be protected from legal actions, employers
are inappropriately shielded from accountability for actions that
directly impact patient care. The final accountability provision
should protect employers that do not make final decisions about patient
care from legal actions for the negligence of the HMO in delivering or
denying health care to their employees. The final provision should
specify employer actions that do not constitute final decisions about
patient care, such as an employer's selection of a health plan, changes
in benefits coverage, or intervention on behalf of a particular employee
with the health plan. An employer, however, which specifies medical
necessity procedure that causes negligent injury, or that directs an
agent who makes a negligent denial or treatment decision, should not, as
in Goss-Coburn-Shadegg, be protected for such decisions, which in
fact directly impact final decisions about care.
Learn more about issues of interest to practicing
psychologists.
The Practice Directorate
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