Feature Archive

Can You Sue Your HMO?

New hope for patients.

WebMD Feature

June 5, 2000 -- When Cynthia Herdrich dragged herself to Carle Clinic in Bloomington, Ill., with searing abdominal pain, she was told by her doctor that she had no choice but to wait eight more days before she could undergo an ultrasound exam at a clinic-owned facility 50 miles away.

In the meantime, on two separate visits in March 1991, her doctor, Lori Pegram, MD, misdiagnosed the inflamed mass in Herdrich's abdomen as a urinary tract infection and later an ovarian cyst. While Herdrich was waiting for the diagnostic test, her appendix ruptured, requiring emergency surgery and causing a life-threatening infection.

Herdrich sued Pegram for medical malpractice and won $35,000 in compensatory damages. During the fact-finding, however, she discovered that her HMO paid cash bonuses to doctors who ordered fewer diagnostic tests and referrals and used only network facilities. Infuriated, Herdrich also sued her physician-owned HMO, Carle Clinic Association, and its insurance company, Health Alliance Medical Plans, for fraud.

"We were amazed," says Herdrich, 42, who now lives in Colorado. "I felt strongly that the way my HMO was set up and structured -- with incentive clauses written in the doctors' contracts -- really did affect the care and treatment I received. I fault the HMO as much as my doctor."

The Case That Could Dismantle HMOs?