Appeals Court Ruling Limits Recourse in Some Cases Against HMOs
A decision by the 2nd District Court of Appeals could limit Californians' options in bringing suits against HMOs for care denials, the Los Angeles Daily Journal reports.
In Watanabe v. California Physicians' Services, the appeals court ruled that HMOs could not be held liable for decisions their contracting medical groups make, including utilization reviews used to determine whether treatments are medically necessary.Â
Under the ruling, the physician groups still can be held liable for the decisions, but state law caps damages they could be ordered to pay.
According to the Daily Journal, the ruling has significant implications because HMOs cover about 19 million Californians, or about 60% of those with health insurance.
The state Supreme Court has declined to review the case.
Rooted in Legislation
The Daily Journal reports that the ruling highlights questions about "two seemingly contradictory" sections of the California Health and Safety Code dealing with health plans and liability.Trial attorneys who criticized the Watanabe ruling said they would ask state lawmakers to clarify the statute (George, Los Angeles Daily Journal, 3/20). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.