Laws allowing claimants to sue managed care organizations (MCOs) for malpractice and other treatment-related causes of action. The effect of such legislation is to lift the so-called Employee Retirement Income Security Act (ERISA) preemption, which places substantial legal restrictions upon a patient’s ability to sue an MCO.
Currently, only a few states, most notably Texas, allow lawsuits against MCOs. Interestingly, only a few lawsuits have been filed against MCOs in Texas, thus calling into question some of the insurance industry’s high cost estimates in the event that the ERISA preemption against lawsuits is removed, per pending federal legislation.