HMO Pays Large Verdict

HMO Pays Large Verdict

A Texas law requires HMOs “to use ordinary care and prudence” when deciding what kind of medical treatment they will pay for. In one of the first cases of its kind, a jury recently returned a large verdict against an HMO because of this law.

The evidence showed that the HMO decided that the hospital care provided for an elderly HMO member was too expensive, and it refused to pay for it. In order to convince the doctor to release the patient from the hospital, the HMO said it would arrange for similar care to be provided in the patient’s home, at a much lower cost. However, the HMO never made any such arrangements and the patient died. The jury found that the cause of his death was the fact that the patient was not provided with oxygen and nursing care. The jury awarded the family of the patient $13 million, including $10 million in punitive damages to punish the HMO for its behavior. We can only hope that this verdict will cause HMOs to review their treatment decisions more carefully.


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