What to do when it’s not a mistake — it’s that your medical care is denied or delayed by the insurance company
We typically think of malpractice as related to a professional service... like medical care or legal representation. If you were injured or became ill (or suffered a worsened illness) because a doctor or other medical provider made a mistake, you might consider filing a medical malpractice claim.
Most people in the U.S. have been in the situation where their doctor recommended a treatment, medication, or diagnostic test and you’ve had to wait to get approval from your health insurance company before moving forward.
Sometimes the process is smooth — just a phone call and you’re approved and ready to get what you need. But in other situations, the insurance company might delay approval or deny it altogether.
What happens then?
What is an HMO?
An HMO is a health maintenance organization or a managed care organization. In plain English, it’s your health insurance company. While most people feel most comfortable when their doctors make the decisions about their medical care and treatment, the reality is that sometimes doctors make decisions based on what the insurance company is likely to cover.
Structure of an HMO
An HMO member (i.e. the patient or customer) must have a primary care provider (PCP) who takes the lead on their care. Anytime you have a medical condition or concern, you must first visit your primary care physician and they will refer you to a specialist if the condition requires treatment or care that they cannot provide.
The HMO and the primary care provider have a duty to make sure the patient is referred to a specialist if the PCP can’t provide the necessary treatment.
An HMO is operated under one of these models:
| Staff | Group | Network |
|---|---|---|
| The HMO owns the healthcare facility and employs physicians. This is the most common HMO structure. | A group of doctors has a contract with an HMO to provide treatment to the HMO’s customers or to patients outside the HMO (who have other types of insurance). | Groups of physicians participate in a network that an HMO member can use with their prepaid health care services. |
What is HMO malpractice?
HMO malpractice might include delay or denial of tests, treatment, or referrals to a specialist.
Specific examples of HMO malpractice include:
- A missed or delayed diagnosis
- A physician who works with the HMO doesn’t order necessary diagnostic tests
- Your condition worsens because care was denied
- Your medication was denied, and the alternative medication or treatment causes an injury
- Your primary care physician fails to refer you to an appropriate specialist or to a doctor outside the HMO network if necessary
You might intend to sue for HMO malpractice if a delay or denial resulted in your becoming ill (or suffering a worsening condition). Some states do hold an HMO liable for malpractice, but other states don’t permit it.
In certain states, you’re required to participate in a mandatory arbitration process.
Arbitration is like a lawsuit in that each party conducts discovery, asks written questions, and reviews the evidence. But instead of heading straight to trial, you participate in an arbitration hearing and try to reach a settlement that’s agreeable to all parties.
Arbitration is legally binding, which means if a settlement is agreed upon, the parties must follow through with paying it. However, if the parties can’t reach an agreement, then the case can continue as a lawsuit, which means it would ultimately be decided by a judge or jury.
Why is it so hard to sue an HMO?
It’s not easy to sue an HMO.
In most states, an HMO is covered by a law called the Employment Retirement Income Security Act of 1974 (ERISA). This law allows for an HMO to be covered by federal law, as opposed to state law, and therefore can’t be sued by the state.
Some states made rules to allow lawsuits against HMOs, but the U.S. Supreme Court ruled in favor of the HMOs (against the states) to confirm that federal law would override state law. Any insurance plan provided by an employer to employees is covered under ERISA except insurance plans for government employees.
Even so, a patient can sue an HMO for denying medical care or medication. Most malpractice claims against an HMO are related to denials of care or failures of care by the primary care physician.
Differences between medical malpractice and HMO malpractice
Medical malpractice is the type of personal injury lawsuit you’d file if a health care provider’s negligence caused you to become ill or injured. The provider’s conduct must be below the accepted standard of care under the circumstances.
Medical malpractice can include (but isn’t limited to):
- Failure to diagnose (or incorrect diagnosis)
- Misreading or disregarding important lab results
- Unnecessary surgery or other procedure
- Surgical error
- Improper medication or prescription
- Insufficient follow-up care or instruction
- Premature hospital discharge
An HMO usually isn’t liable for an in-network doctor’s errors. But, if the HMO makes a decision that results in harm to the patient, then it should be held liable. For example, if the HMO refuses authorization for a test, procedure, or hospital admission and the patient suffers illness or injury as a result, then they can be held at-fault.
An HMO might claim that it isn’t liable because it made a benefit decision and not a medical decision. But, while that might technically be true, the HMO has authority over its network physicians and sets guidelines for treatment.
Why does it seem like your HMO isn’t willing to cover your treatment?
Think of it this way:
You pay a premium to your insurance company for your car insurance and hope that you’re never in a car accident. But it’s inevitable that sooner or later, everyone has to make a claim on their insurance policy. The car insurance company makes a profit if they can pay out less than what they earn in premiums. So, their motivation is to settle your claim for the lowest amount possible, because that increases the company’s bottom line.
Health insurance is the same.
Many people prefer an HMO plan because it’s affordable. But the HMO needs to cover everyone’s medical costs from the budget paid by member (and employer) premiums. In order to stay solvent, the HMO must pay less in treatment costs than what is paid in premiums. That’s why the HMO is always balancing risk vs. result when evaluating what medical care needs to be covered and to what extent.
Who is liable for HMO malpractice?
Sometimes, the HMO is liable for mistakes made by its network doctors.
You might also have a claim against:
- The HMO, itself (the claims representative)
- The doctor (if the suggested treatment is inappropriate or insufficient)
- The hospital (if it’s owned or managed by the HMO)
- A provider who committed medical malpractice
Recoverable damages in an HMO malpractice lawsuit
If you were injured or suffered illness because of HMO malpractice, you can recover damages that include:
- Costs for medical treatment
- Lost wages
- Pain and suffering or emotional distress
- Punitive damages
Again, this is a complicated area of law. The HMO, though it tries to pay out as little as possible for treatments and medical expenses, has deep pockets when it comes to defending itself in court.
If your medical treatment was denied, or if it was delayed unreasonably, and your condition worsened, you have rights. The laws of your state will determine whether or not a lawsuit against your HMO is permitted and how it needs to be filed.
The Enjuris law firm directory is a prime resource for finding legal counsel, even for the most complicated matters. Search by state to find a lawyer near you who knows the laws in your state and who is ready to handle your claim.
See our guide Choosing a personal injury attorney.