Texas, in First, to Let Patients Sue HMOs

Texas will be the first state to allow patients to sue managed-care organizations for medical malpractice if decisions to deny or delay treatment cause injury.

Gov. George W. Bush said Thursday that despite concerns that such legislation could increase lawsuits and drive up health-care costs, he will allow it to become law without his signature.

“Given the choice between doing nothing and doing something to address a significant problem that impacts the health of thousands of Texans, I have concluded the potential for good outweighs the potential for harm,” Bush said.

The law, which takes effect Sept. 1, was opposed by businesses and by managed-care organizations that said making them subject to civil lawsuits for medical negligence, just as doctors are, would only drive up health-care costs.

Several bills pending in the California legislature would also attempt to deal with the issue of whether HMOs should be legally liable for malpractice claims stemming from alleged treatment denials or delays.

A bill written by Sen. Herschel Rosenthal (D-Los Angeles) would require medical directors of HMOs doing business in California to be licensed in the state. SB 324, sponsored by the California Medical Board, may enhance consumers’ ability to sue HMOs that deny necessary medical treatment.

Some HMOs have argued that they should not be legally liable for malpractice claims because they only administer health benefits and do not actually make medical decisions. But many physicians and plaintiffs’ lawyers dispute that.

They contend that HMO medical directors are, in effect, practicing medicine when they make decisions on whether medical services will be provided or not. They argue that the HMOs should share legal responsibility for decisions that result in malpractice claims.