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Suicide Prompts First Challenge of HMO Liability Law in Texas

MANAGED CARE December 1998. © MediMedia USA
State Initiatives

Suicide Prompts First Challenge of HMO Liability Law in Texas

MANAGED CARE December 1998. ©1998 Stezzi Communications

A subsidiary of Aetna U.S. Healthcare is the first HMO to face a malpractice lawsuit under a recently enacted Texas law. The suit against NYLCare of Texas was filed by the family of a 68-year-old Fort Worth man who committed suicide by drinking antifreeze hours after being discharged from a psychiatric hospital over his physician's objections.

The suit alleges that NYLCare denied the man adequate hospital care despite his suicidal impulses and his physician's advice to the contrary. According to the lawsuit, the patient, a retired pharmacist, "used up his days according to whatever cookbooks or protocols for psychiatric treatment" NYLCare used. The suit asserts that the plan's systems increased the chance that substandard care would be delivered.

The HMO says it will defend itself vigorously.

Under Texas law, an injured consumer can sue a health insurer if he or she was hurt by the insurer's delay or denial of treatment. Missouri is the only other state to allow such suits, though Pennsylvania may join them soon (see item at right).

After Texas passed the HMO liability law last year — and before Aetna bought NYLCare — Aetna challenged the law in federal court. District Judge Vanessa Gilmore upheld the law Sept. 18. A few days before the family filed its suit, Aetna said it would appeal Gilmore's decision. The appeal will be heard by the U.S. Circuit Court of Appeals in New Orleans.

Also in Texas, outgoing Insurance Commissioner Elton Bomer scrapped plans to publish formal state guidelines for physician payment by HMOs.

Bomer, leaving next month to become a senior adviser to Gov. George W. Bush, said the state will enforce, on a case-by-case basis, a 1997 law that bars HMOs from using financial incentives to limit services. A task force couldn't agree on the percentage of a physician's compensation that should be at risk in an HMO contract.

HMOs wanted 25 percent, while consumer groups wanted to limit physicians' risk to 10 percent of compensation.

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Innovative Member Engagement Operations For Health Plans Las Vegas, NV October 20–21, 2014
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2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
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