Brief Fact Summary. The Shannons (Plaintiff) claimed that their physician, Dr. McNulty (Defendant), and their health maintenance organization, HealthAmerica (Defendant), were vicariously liable for their son’s premature delivery and death that followed.
Synopsis of Rule of Law. When a benefits provider such as a health maintenance organization (HMO) interjects itself into making medical decisions that affect the care of a subscriber, it must do so in a medically reasonable manner.Â
Therefore, an injured party does not have to rely on and establish the negligence of a third party.
View Full Point of LawIssue. When a benefits provider such as a health maintenance organization (HMO) interjects itself into making medical decisions that affect the care of a subscriber, must it do so in a medically reasonable manner?
Held. (Melvin, J.) Yes. When a benefits provider such as a health maintenance organization (HMO) interjects itself into making medical decisions that affect the care of a subscriber, it must do so in a medically reasonable manner. The corporate liability that applies to hospitals may be extended to HMOs as care providers with a significant role in the total health care of patients. In this case, HealthAmerica (Defendant) provided a phone service for emergent care staffed by triage nurses. Therefore, it was under a duty to oversee that the dispensing of such advice by those nurses would be performed in a medically reasonable manner. HMOs may therefore be held corporately liable for a breach of duties that causes harm to its subscribers. Reversed and remanded.
Discussion. In this case, the court cited to the case of Thompson v. Nason Hospital, 527 Pa. 330 (Pa. 1991). As it relates to hospitals in that case, Pennsylvania first adopted the theory of corporate liability. When a hospital is liable under the theory of corporate negligence, an injured party does not have to rely on or establish the negligence of a third party.