Basics of Managed Care
Managed care usually means that you must follow more rules when you go to the doctor in exchange for paying less for your health care. The law is becoming more and more important in how people use managed care.
Managed care, including HMOs, is becoming increasingly important in American health care, and is increasingly regulated by the law. Under managed care specific doctors, hospitals and other health care providers agree with the insurance company to give you medical care at a reduced cost. In return, all members use that specific list of doctors and hospitals.
What are some of the concerns with managed care?
The biggest criticism of managed care is that your doctor is no longer given the final say on what type of treatment is covered. Now the managed care organization gets to make—or at least influence—that decision. The problem is that the doctor’s opinion on what is needed may differ from the health plan’s opinion of what it should cover. Bear in mind that the person at the health plan who is influencing your care may not be a doctor or nurse. That person may not have any medical training whatsoever.
How does managed care affect me?
The insurance company influences the decision of your doctor by limiting the care for which the company will pay. What used to be a decision between you and your doctor is now a decision between you, your doctor and your health plan. You either must abide by your managed care policy or pay for the treatment out of your own pocket.
Let’s assume, for example, that your health plan allows you to stay in the hospital for 48 hours after giving birth, unless there is a medical necessity for a longer stay. Not every woman is physically ready to be on her own within 48 hours after childbirth. Yet you may either have to leave the hospital or pay for any further treatment yourself.
What are the states doing to ensure that patients get the care they need within the managed care system?
Each state makes its own laws as to what health insurance (which includes managed care) must provide. There is also some federal law on level of coverage required for specific situations, such as childbirth.
What are some specific legal protections for consumers?
- Health care plans may not deny coverage on the basis of pre-existing conditions.
- Usually a health care plan is required to renew health coverage for all members who pay their premiums, even if the member has become ill and requires expensive treatment.
- Health plans must include maternity coverage.
- Emergency rooms cannot turn away patients simply because yhey lack coverage.
- Insurers must offer coverage of services for mental health, behavioral health and substance-use disorders to be comparable to physical health coverage. .
- A few states require health plans to cover chiropractic and hospice care.
What options do I have when my health plan refuses to cover the treatment I need?
Your health plan should provide you with the process you need to follow to appeal the health plan’s decision. In some health plans the only thing you will need to do is to get your doctor to write a letter stating why the treatment is necessary. It can be useful to get the opinion of another doctor, in writing and probably at your own expense, and submit that to the health plan.
In a few states the law gives you the right to complain to an independent reviewer that will make its decision and, if it decides in your favor, has the authority to make the health plan cover your treatment.
Regardless of the law in your state, you will need to go through the health plan’s appeal process before you can consider taking your health plan to court.
Can I recover damages from my health plan when it does not live up to the promises in the health plan’s brochure?
It may be difficult. Most of the information in your health plan’s brochure is considered to be general marketing—which is sometimes called “puffery”—as opposed to legally enforceable promises.
In one case some people sued their health plan over the health plan’s brochure that claimed that the health plan would provide “high standards” of medical service. The patients did not receive what they considered a high standard of medical care. The patients lost their lawsuit because the court decided that the health plan brochure was puffery and not a contract to provide a certain type of medical care.
Although the patients lost in that case, it is possible that if a health plan provided more specific details about the care provided to patients, you might be able to win in a case against a health plan, such as when a health plan specifically promised access to medical specialists that it did not provide.
How can I recover from my health plan for negligence?
There are three main theories of law under which you could recover damages from your health plan.
Respondeat superior: Respondeat superior , for our purposes, says that a health plan is responsible for the actions of the doctor when the health plan controls the work of the doctor. To decide whether the health plan is responsible for the doctor’s actions through respondeat superior, a court will look at the contract between the doctor and the health plan, the day-to-day interaction between the doctor and the health plan and the amount of control the health plan exercises over the doctor’s decisions. In one case a court found that the doctors were under the control of the health plan’s medical director who policed the medical services provided to patients and whose decision as to whether the health plan would cover certain treatments was final. In that case the health plan was responsible for the actions of the doctor under respondeat superior.
Apparent authority: Apparent authority is when a health plan is indirectly responsible for the acts of its doctors because patients consider the doctors to be representatives of the health plan. This is sometimes known as ostensible agency or agency by estoppel. This is different from respondeat superior because in apparent authority the doctors are not employees of the health plan. But the key here is that the public is led to believe that the doctors represent or are employed by the plan, thus giving patients the impression that its doctors are capable of giving qualified medical care.
Corporate negligence liability: Corporate negligence liability, as it applies to health plans, holds that the plans owe you, as its member, a duty to:
- take reasonable care in making sure that its doctors are qualified to provide proper treatment; and
- to draft and enforce rules and policies to see that you get quality medical care.
This type of liability was used by a woman who was injured by the health plan urologist to whom her primary care provider referred her. The health plan did check to make sure the doctor was licensed but the health plan’s background check of the doctor was cursory. The court held that the health plan had a duty to its members to make sure that its doctors were qualified and to drop any doctors from its network if the health plan found the doctor posed a foreseeable risk of harm to its members.
Not every state recognizes these theories. Your state might not recognize any of them. Lawsuits against health plans are becoming more popular, though, so the odds are that your state will allow patients to sue under at least one of the following legal theories.