Insurer Liability

When health plans decide to override the recommendations of physicians, and limit or deny coverage for medical care or treatment, the physician should not be held responsible for the financially decisions of health plans. Health plans should be held responsible in delaying or denying the recommendations of physicians that cause a patient's outcome to be compromised. A number of states have passed laws that permit patients to bring action against managed care organizations in the event of adverse outcomes when covered treatment is delayed or denied.

In 2004, the Supreme Court ruled unanimously that patients cannot sue their HMO under state laws for failing to pay for doctor recommended care. In short, the court ruled that federal ERISA law completely pre-empts such lawsuits brought in state courts. Although this was a serious blow to the issue of insurer liability, AAOS continues to monitor any attempts to reestablish a duty of care for managed care.