Pagarigan v. Aetna U.S. Healthcare of California Inc.
(California Court of Appeals, 2nd District, Oct. 25, 2005)
Ruling: At issue on this appeal was the liability of a health maintenance organization, which contracts out its healthcare responsibilities to various providers, when one or more of those providers denies medically necessary services or commits malpractice in the delivery of those services. The court concluded that the HMO owes a duty to avoid contracting with deficient providers or negotiating contract terms that require or duly encourage denials of service or below standard performance by its providers.
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