Pomona HMO Found Liable in Malpractice Case

Saying the case provided a “compelling picture of the problems and pitfalls” of managed care, an arbitration judge has slapped a small Pomona-based HMO with a $1.1-million judgment for failing to properly diagnose and treat a woman with kidney disease.

The private judge found that Inter Valley Health Plan and its medical director, Dr. Alexander Bokor, repeatedly interfered with the recommendations of the patient’s primary care doctor, blocking a biopsy and other tests and refusing to refer the patient to a kidney specialist.

Their actions were “unconscionable” and “not capable of any rational explanation,” wrote arbitration Judge John K. Trotter, a retired state appeals court judge.

The case spotlights issues that are being raised in the California Legislature and elsewhere about whether health maintenance organizations and corporate medical directors, in addition to physicians themselves, should be liable in malpractice cases. Lawmakers are also examining the extent to which health-plan administrators are interfering in medical decisions.

California legislators have introduced about half a dozen bills that would hold health plans and corporate medical directors directly liable for medical decisions that resulted in malpractice claims.

The bills stem largely from complaints by doctors that their medical decisions are increasingly being denied or overruled by HMO medical directors, often without the administrator ever physically examining the patient or reviewing his or her medical records.

The Inter Valley case involved Joyce M. Ramey, a 69-year-old former London chorus dancer and nurse, who in March 1993 sought treatment for kidney problems. Ramey was enrolled in Inter Valley’s HMO for Medicare recipients.

Ramey alleged that Inter Valley repeatedly refused to approve tests--including a biopsy used to detect kidney disease--and referrals to kidney specialists recommended by her primary care doctor.

Eventually, Ramey suffered kidney failure and has had to receive three-hour dialysis treatment several times a week since April 1995.

Trotter ruled that although Ramey’s kidney failure was not caused by the treatment denials, “whatever chance plaintiff may have had for her condition to be diagnosed and treated at an earlier stage was lost by defendants’ conduct.” He said experts for both sides had testified that Bokor’s refusal to authorize a kidney biopsy prevented early diagnosis of Ramey’s condition.

Mike Bidart, a Claremont attorney representing Ramey, said: “This was a case about a medical director making a business decision not to authorize treatment. The doctors who were actually treating her were trying to do everything right, but they weren’t allowed to.”

Inter Valley executives did not return phone calls seeking comment.

The $1.1-million award--including $100,000 in punitive damages--is unusually high for an arbitration case involving denial of medical treatment.

Some jury verdicts against HMOs have been in the tens of millions of dollars.

Trotter said Inter Valley’s conduct would have warranted “significantly higher” punitive damages except that the HMO is a nonprofit corporation and relatively small in size.

Inter Valley, which operates throughout Southern California, had about 60,000 members as of Sept. 30.

One of the pending bills addressing the liability issue, sponsored by Sen. Steve Peace, (D-El Cajon), is similar to a new Texas law that allows patients to sue HMOs for medical malpractice if decisions to deny or delay treatment cause injury.

Health insurers have generally opposed such bills. They have argued in courts throughout the country that they cannot be held legally responsible for medical malpractice because they do not themselves make medical decisions; they only administer benefits.

They also have argued that they are protected against malpractice claims by a 1974 federal law--the Employment Retirement Income Security Act, or ERISA--governing patients who get their medical insurance through employer-sponsored plans.

Ramey did not sue the HMO for medical malpractice but, rather, for breach of faith and negligence.

The case was not subject to the ERISA law because Ramey was on Medicare, a government-sponsored insurance plan for people age 65 and over and the disabled.