LIABILITY FOR MANAGED CARE DECISIONS - THE EMPLOYEE RETIREMENT INCOMESECURITY ACT (ERISA) AND THE UNEVEN PLAYING FIELD

As managed care organizations expand their programs of quality assuran ce and physician evaluation, more medical malpractice lawsuits may be brought against managed care organizations on the ground that, like ho spitals, they are legally responsible for negligent corporate acts tha t injure patients. However, the federal Employee Retirement Income Sec urity Act (ERISA)shields managed care organizations from liability whe n they are part of an employee group health plan governed by ERISA. Un like patients with other types of Insurance, patients in ERISA health plans do not have a malpractice remedy for a managed care organization 's negligence. A few federal appeals courts recently recognized that E RISA plans can be vicariously liable for their physicians' medical mal practice, but only if the physician is the plan's employee or agent. Y et ERISA still prohibits negligence claims against ERISA health plans for injuries resulting from denial of plan benefits, failure to use qu alified physicians, utilization review, or improper plan administratio n. Current managed care operations do not neatly distinguish between a dministering benefits and controlling quality of care. Neither should the law. ERISA should be amended to provide employees with the same re medies that patients in non-ERISA plans enjoy.