Laws vary from state to state, but in some states a health insurance carrier, health maintenance organization, or other managed care entity for a health care plan has the duty to exercise ordinary care when making health care treatment decisions and is liable for damages for harm to an insured or enrollee proximately caused by its failure to exercise such ordinary care.

This liability may be created by a specific state statute or by the state's common law (court opinions or case law) under a negligence theory for breach of the standard of care (reasonableness).

In Texas, health insurance carriers, health maintenance organizations (HMOs), and other managed care entities are expected to exercise ordinary care when making healthcare treatment decisions. The Texas Insurance Code, specifically Section 88.002, establishes that these entities owe a duty of ordinary care to their insureds and may be held liable for damages if their failure to exercise such care results in harm. This means that if a managed care entity does not make decisions with the reasonable care that would be expected of a similar entity under similar circumstances, and this failure leads to injury or harm to the insured, the entity can be held responsible for those damages. This liability is grounded in both statutory law and the principles of negligence under Texas common law. An attorney specializing in health insurance law could provide more detailed information on how these regulations apply in specific circumstances.