State Laws Allow HMO Members To Sue

New state laws in Texas and Missouri allow health maintenanceorganization members to sue their plans over perceived restrictions on access to needed care.

Until now, consumers have been unable to take action against managed care providers by the 1974 Employee Retirement Income Security Act, which says that all denial-of-care lawsuits must be heard in federal rather than state courts and limited the size of awards, and by the Corporate Practice of Medicine Doctrine, which says that as HMOs do not practice medicine, they cannot be liable for malpractice lawsuits of any kind. Missouri and Texas legislators circumvented both those rulings, allowing state HMO members to sue their plan should they feel threatened or harmed by the withholding of what they perceive to be "necessary care."

Similar legislation is pending in 17 other states, while in Congress, Republicans Senator Alfonse D'Amato and Representative Charles Norwood have proposed federal amendments to ERISA which would do away with existing federal court monopolies on consumer-HMO lawsuits.