What exactly happened in HealthAmerica case?

Early labor misdiagnosed as fibroid uterus

On its face, the Shannon v. McNulty, MD, and HealthAmerica Pennsylvania case looks remarkably simple and perhaps preventable.

All anyone had to do was tell the plaintiff to go to the hospital to be examined for preterm labor. But no one gave her that advice for 10 days after she first reported abdominal pains to her physician. The result: She delivered a premature baby who did not survive.

The case began when Sheena Shannon, an enrollee in Pittsburgh-based HMO HealthAmerica Pennsylvania, received prenatal care in 1992 from Larry P. McNulty, MD, a Pittsburgh-area OB/GYN. About five months into her pregnancy Shannon called McNulty on Oct. 2 with complaints of abdominal pain. He examined her for five minutes on Oct. 5 and said she had a fibroid uterus. He did no testing and prescribed rest for a week, according to the appeals court decision.1

Her pain continued and she called him again on Oct. 7, 8, and 9 to ask if she could be in pre-term labor. He told her she was not in labor and allegedly became impatient. Finally, on Oct. 10, Shannon called HealthAmerica’s nurse triage phone line to say that she thought she was in pre-term labor. The nurse told her to call McNulty again. After one more call to the nurse line and another call to McNulty, Shannon called the nurse line on Oct. 12 to complain of severe back pain and back spasms. The nurse had her speak with a HealthAmerica in-house orthopedic physician, who referred her to a hospital for back pain.

She delivered a 1.5 pound baby that night, and the baby survived only two days.

Shannon and her husband, Mario, sued McNulty and HealthAmerica Pennsylvania. Their lawsuit claimed the HMO was vicariously responsible for employing nurses who gave poor advice over the nurse triage phone line. And the suit claimed the HMO had corporate liability for its negligent supervision of McNulty’s care.

The case went to trial before a jury, and HealthAmerica moved for a compulsory nonsuit, which the court granted after testimony by the HMO’s triage nurses.

The Shannons filed post-trial motions to have the nonsuit removed; the motions were denied, and the Shannons appealed the decision. The Pennsylvania appeals court reversed the trial court’s decision and ordered a new trial. McNulty settled his involvement before the case’s new trial date was scheduled.

The appeals court also said in its 31-page decision that HealthAmerica and other HMOs could be held responsible under corporate liability when they perform similar functions as hospitals, such as rendering medical decisions that affect a subscriber’s care.

The court used the same standards created in the 1991 Pennsylvania case of Thompson v. Nason Hospital, which had opened the doors for hospitals to be sued under corporate liability.

The court in this case set four general areas of corporate liability:

1. a duty to use reasonable care in maintenance of safe and adequate facilities and equipment;

2. a duty to select and retain only competent physicians;

3. a duty to oversee all persons who practice medicine within its walls as to patient care;

4. a duty to formulate, adopt, and enforce adequate rules and policies to ensure quality care for patients.

In the HealthAmerica decision, the court recognized the central role HMOs play in the total health care of subscribers.

Judge Orie Melvin wrote in the decision: "A great deal of today’s healthcare is channeled through HMOs with the subscribers being given little or no say so in the stewardship of their care. Specifically, while these providers do not practice medicine, they do involve themselves daily in decisions affecting their subscriber’s medical care. These decisions may, among others, limit the length of hospital stays, restrict the use of specialists, prohibit or limit post hospital care, restrict access to therapy, or prevent rendering of emergency room care."

Melvin continues: "While all of these efforts are for the laudatory purpose of containing health care costs, when decisions are made to limit a subscriber’s access to treatment that decision must pass the test of medical reasonableness. To hold otherwise would be to deny the true effect of the provider’s actions, namely, dictating and directing the subscriber’s medical care."


1. Mario L. Shannon and Sheena Evans Shannon, individually and as co-administrators of the estate of Evan Jon Shannon, appellants v. Larry P. McNulty, MD, and HealthAmerica Pennsylvania Inc., appellees; No. 940 Pittsburgh, Superior Court of Pennsylvania (Oct. 5, 1998).