Malpractice in the Managed Care Industry

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Stern, Joanne B.
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INTRODUCTION|In view of the increased costs of providing health care services during the past twenty years, there have evolved during this time an increased number of managed health care systems, i.e., organizations, which attempt, primarily through putting economic pressures on providers, to restrict the utilization of health care services by enrollees in the system. This in turn, has lead to new areas of liability based on such theories as bad faith breach of contract, corporate negligence, ostensible agency, and various other tort doctrines. This Article attempts to elucidate and explain some of the basic theories pertaining to such emerging areas of liability.|In attempting to hold the managed care system liable for the malpractice of its contracting or employee physicians, the initial cause of action generally considered derives from the theory of respondeat superior. In other words, if the physician in fact works for the managed care entity, there will be little or no defense to an action based on this theory: If a physician is employed on the staff of an HMO, it is generally clear that his or her actions, in terms of liability, will be attributable to the HMO for which he or she works.|A more difficult question arises when a physician is a contracting provider who works on behalf of an HMO but also works on his own and/or contracts with other managed care entities and/or HMOs. Should this physician's negligence be attributed, for liability purposes, to the HMO? Does it matter that the physician is only a contracting provider who has little or few links to the HMO? Does it matter further that such a physician has certain incentives of a financial nature to limit an enrollee's access to the services of the HMO...
24 Creighton L. Rev. 1285 (1990-1991)
Creighton University School of Law
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