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First Nursing Homes, Next Managed Care?: Limiting Liability in Quality of Care Cases under the False Claims Act

Abstract Suppose that a managed care enrollee visited his plan doctor for treatment of an injury. Next, suppose that either: (1) the doctor, through her own negligence, failed to render the appropriate standard of care, or (2) although the doctor desired to treat the injury consistent with what she believed to be professionally recognized standards of health care, the managed care organization (MCO) administrators denied coverage. Consequently, the doctor failed to render adequate treatment. In both cases, under traditional jurisprudence, the enrollee might have a medical malpractice action against his doctor. He also might try to hold the health plan liable under a variety of agency and direct liability theories. However, under the same facts, if a federal program such as Medicare paid for the enrollee's care, he might act as a whistleblower (or “relator“) against the doctor and the organization, conceivably recruiting the federal government to foot the litigation and investigation bills and increasing his recovery.