HMO LIABILITY: Docs Turn To Medical Boards

      Doctors are increasingly taking their battles against "invisible but powerful" HMO medical directors to state medical boards in an attempt to impose accountability for denials of treatment, the Wall Street Journal reports. In this "new front in the HMO wars," medical directors who are exempt from most patient lawsuits under the Employee Retirement Income Security Act, along with the health plans they work for, can be investigated by medical boards in several states including Arizona and Maryland. The Maryland Legislature narrowly defeated a proposal requiring medical directors to be licensed in the state, but a similar Mississippi law passed this year and bills are pending in California and Ohio.

Arguing 'Medical Decisions'
      The managed care industry argues that medical boards have no authority over medical directors. "Medical directors are not telling the patient what to do. We are making a judgment about what is appropriate for the policy to pay for," said Charles Kahn III, COO of the Health Insurance Association of America. But Mississippi State Medical Licensure Board Executive Officer Thomas Stevens voiced the opposite view, saying medical directors are "taking away the money, and they know that that influences the patient's decision." In a recent Arizona case in which Blue Cross and Blue Shield of Arizona medical director Dr. John Murray refused to authorize surgery despite a surgeon's recommendation, the Arizona appellate court ruled that "Dr. Murphy substituted his medical judgement for [the surgeon's] and determined that the surgery was not 'medically necessary.' There is no other way to characterize Dr. Murphy's decision: It was a 'medical decision.'" Murphy held that "he is doing a patient a favor when he denies coverage for unnecessary procedures" (Jeffrey, 7/13).