Can You Sue Your HMO for Medical Malpractice?

In many cases – NO

The recent Appellate Division decision in Yodzis v. Health Net (2/26/09) reminds us that it is only in the rare circumstance, when an HMO doctor actually provides treatment, or, is the employer of a treating physician, that a patient may sue an HMO that is governed by ERISA for medical malpractice.

Many HMOs are, in fact, governed by ERISA (the Employee Retirement Income Security Act of 1974). ERISA provides, rather unfairly, a broad based pre-emption against medical malpractice claims made in State Court for negligent decisions made by HMO physicians in determining whether or not care ought to be provided to a patient under the terms of the HMO plan.

Many times such plans only allow for treatment deemed “medically necessary and appropriate.” In Yodzis, the patient’s vascular surgeon requested that he undergo an arteriogram and endarectomy to help reduce the risk of a future stroke. Pre-authorization was sought from Health Net, which was denied, because it was claimed the patient had a history of alcohol abuse which first had to be treated. As a result, the proposed surgeries were cancelled. Additionally, Mr. Yodzis’ Coumadin, a blood thinner, had also been discontinued in anticipation of the proposed surgeries. Delays continued in the scheduling of the surgeries and the plaintiff remained off his Coumadin, and, approximately one month later he suffered a severe, disabling stroke.

In rejecting the patient’s claim against the Health Net physicians for medical malpractice in denying the request for necessary surgeries, the Court held that such claims are, unfortunately, barred by the pre-emptive language of ERISA. Courts have interpreted this language to mean that managed care decisions made by non-treating HMO physicians in denying care to a patient cannot be the basis of a State Court malpractice claim.

The one apparent exception to this broad based pre-emptive doctrine is when a treating physician is employed by an HMO and makes an administrative decision that also requires the exercise of medical judgment. Thus, the HMO can be liable only when it’s employee physician is an actual treating physician, a rare occasion. While the Court acknowledges that such restrictions seem unfair, it is only through changes in the federal ERISA law that will allow a patient who is an ERISA based HMO plan to sue the plan’s doctors for negligently denying or delaying benefits. Patients who participate in plans not governed by ERISA do not have such limitations, and, New Jersey’s own Health Care Accountability Act (NJSA 2A:53A-30 to 36) allows for a medical-malpractice type action against a non-ERISA HMO for benefit denials and delays.