Mc-Chpt 64 Legal Liability In Medical Management

Front 1

Laws (and Court Statutes) governing MCO’s

Back 1

 standards of quality
 grievance procedures
 On Federally Qualified HMO’s:
 peer review req’d
 UM and QM reporting req’d

Front 2

Punishments for an MCO that acts illegally

Back 2

 regulatory oversight
 Punitive and Civil damages in the $100 millions
 forced to cease doing business
 suspension of license
 revocation of federal qualification

Front 3

Illegal Actions by MCO’s (as per Court decisions and lawsuits)

Back 3

 Improper Denial of Care (later found to be medically necessary)
 Bad faith actions (too-slow authorization)
 Negligence in
 program design
 compensation (providers deny care; referrals too limited)
 selection or supervision of providers
 “vicarious liability”
 even independent providers’ mistakes cost the MCO legal damages.

Front 4

Difficulties in Determining whether an MCO is liable for damages

Back 4

 ERISA preempts State laws
 ERISA limits damages
 Tough question: Does ERISA preempt punitive damages for negligence?
 ERISA plan sponsor must disclose any conflict of interest

Front 5

Recommendations to an MCO on How To Avoid Legal Damages

Back 5

 Monitor court decisions
 Comply with ERISA
 clearly exclude coverage of transplants, etc.
 promotional brochures match the contract.
 clearly identify responsibility for independent providers’ actions.
 thoroughly review before denying authorization (e.g. life-or-death situation?)
 offer other treatment options
 assess current technology (still “experimental”?)
 Establish medical policies (follow ASoP)
 Establish appeal/grievance processes for Providers and Members.
 Give provider bonuses based on:
 Quality, Compliance, and E-Commerce.
 Not just low utilization
 Credentialing.
 UR
 QM
 Use Peer Review
 terminate poor providers (else $$$ legal damages)
 Purchase malpractice insurance
 Hire legal counsel.

Done.