In a landmark ruling, the Illinois Supreme Court ruled on May 18 that health maintenance organizations (HMOs) can be held liable for negligence involving a patient's medical care.

The decision is seen as a blow to the managed-care industry, which is actively working to protect themselves from accountability for medical malpractice in Congress and statehouses across the country.

Illinois' Supreme Court is believed to be the first to address the issue of "institutional negligence," or HMO responsibility for care provided by doctors in their networks. HMOs in the past have enjoyed presumed legal protections against malpractice suits.

But the high court's ruling is expected to result in managed-care plans defending themselves by simply approving more medical services as a defense against future litigation, industry experts said.

"This ruling means patients can now proceed directly against the HMO for the HMO's carelessness or negligence for causing an injury," said A. Denison Weaver, a Chicago attorney who successfully brought the action against Chicago HMO, a Medicaid managed-care plan now operated by United HealthCare of Illinois Inc. "HMOs can't hide behind the skirts of the doctor," he said.

The case involved Sheila Jones, who called her Chicago physician's office in January of 1991 about her ill infant daughter. After she insisted on speaking to Dr. Robert A. Jordan, the physician advised Jones to give her daughter castor oil, according to documents filed in the case. But 3-month-old Shawndale Jones was later found to have bacterial meningitis, which allegedly had been misdiagnosed because Dr. Jordan had been overloaded by Chicago HMO -- he reportedly had 6,000 patients.

As a result of the HMO's contracts with Dr. Jordan, Jones' lawyer said, Shawndale became severely and permanently disabled. The now 9-year-old girl, who lives with her mother and six siblings in south suburban Chicago Heights, suffers regular seizures, is unable to feed herself and weighs just 45 pounds.

In overturning an appellate court ruling that had sided with Chicago HMO, Justice Michael Bilandic wrote that Jones' claim about whether the HMO was negligent "falls within the purview of institutional negligence," and therefore the case is now headed for a trial.

"We hold that Chicago HMO had a duty to its enrollees to refrain from assigning an excessive number of patients to Dr. Jordan," the court said. "HMOs contract with primary care physicians in order to provide and arrange for medical care for their enrollees. It is thus reasonably foreseeable that assigning an excessive number of patients to a primary care physician could result in injury, as that care may not be provided."

The Supreme Court's action carries no verdict of innocence or guilt. Those issues are to be decided at separate legal proceedings in Cook County Circuit Court.

This information was compiled from reports in the Chicago Tribune. More articles about this case and its impact can be found on the Chicago Tribune Web site.