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$524 Million Punitive Damage Award Provides Warning to HMOs about Unsafe Network Doctors

April 30, 2013

Most people with health insurance must choose a doctor from a list of providers that take their insurance plan. While many people presume that all the physicians on the list are competent, so the choice can be limited to issues like preferred gender and proximity of the medical practice to the patient's home or office, they might want to reconsider.

A jury has just awarded a $524 million punitive damage award against a health insurance company (UnitedHealth Group) because it knowingly allowed a doctor with a poor quality of care record to continue as an approved doctor in their network.

The case involved two patients who contracted hepatitis C after receiving a colonoscopy from the doctor. The medical malpractice was linked to the doctor failing to sterilize instruments, as well as re-use of a surgical anesthetic substance and syringes.

The massive punitive damage award against the HMO could mean that health insurance companies must more carefully monitor doctors in their network or face potential liability when the doctors on their provider list fail to deliver adequate medical care. The theory of liability was that the HMO was negligent in allowing an unsafe doctor to remain on its list of providers given to consumers. The key is that the plaintiff had to establish that the insurer knew or had reason to know that it was credentialing a dangerous doctor.

In this case, the discovery process revealed that the doctor had a record of serious quality of care issues so the insurance company should have been on notice that it was not appropriate to keep him on their plan. The punitive damage award may have been as high as it was because the insurance provider had more than just "constructive knowledge" of the doctor's poor medical record. Documents produced during discovery revealed that the doctor was dropped from the plan because of quality of care issues. However, they put him back on the program when he agreed to work at an extremely low rate.

The quality of care issues that initially motivated the health insurance provider to drop him from the plan involved a patient whom he released after he failed to notice two massive cancerous tumors that caused the death of the patient within days of the doctor visit.

Records produced at trial revealed that the doctor was added back to the network after the company got a new CEO who had extensive business experience but no background in the health care industry. According to the plaintiffs' attorney, the new CEO hid the quality of care information from the credentialing committee to support its decision which was based on economics rather than providing high quality care.

After the decision was made to re-hire the doctor for an exclusive contract covering gastroenterology, the chief of staff of the largest hospital in Nevada warned the insurer that it was making a mistake. The doctor who previously held the coveted contract also contacted the CEO of the health care insurer and told them that the services could not be provided at the contract price without compromising the quality of patient care and safety.

The price of the cut rate medical care led the negligent doctor to cut corners by using syringes and vials of anesthesia intended for a single patient on multiple patients. The doctor also saw as many as five colonoscopy patients in the time it would normally take to see a single patient according to the evidence provided in the medical malpractice lawsuit.

Why Montlick & Associates?

If you have received substandard medical care that caused serious injury or the death of a loved one, you may have a viable liability claim against the doctor, hospital and/or your health insurance company.  Montlick & Associates has been helping injured people get the compensation they deserve since 1984.  The firm was recently honored by the Georgia House of Representatives for its 30 years of service with the passing of House Resolution 394 recognizing Montlick & Associates for "the outstanding accomplishments of this distinguished firm," and “for providing efficient, effective and dedicated services to the citizens of Georgia.” The firm was also named the Most Patriotic Business of 2011 by the Association of the United States Army in Atlanta for its efforts to support the troops, and its CEO David R. Montlick received a Patriotism Award in 2012 for the Southeast. 

The Georgia medical malpractice attorneys at Montlick and Associates are  available to provide legal representation to medical malpractice victims throughout all of Georgia and the Southeast.  No matter where you are located, the attorneys at Montlick & Associates are just a phone call away, and will even come to you. Call 24 hours a day/7 days a week for your Free Consultation at 1-800-LAW-NEED (1-800-529-6333). You can also visit online at and use the firm’s Free 24-hour Live Online Chat or Free Case Evaluation Form.

Please Note:
All information provided by our blogs is general in nature and should not be relied upon as legal advice. Consult a Montlick attorney for details about your unique situation.