$A Nevada jury says the state’s largest health management organization is liable for $24 million in compensatory damages to three plaintiffs in a negligence lawsuit stemming from a hepatitis C outbreak that became public in 2008.

That was not all.  Unlike Nebraska, Nevada allows punitive damages.  The plaintiffs’ lawyer asked the jury to hold Health Plan of Nevada and Sierra Health Services responsible for another $1 billion in punitive damages for ”reckless disregard” for patients’ health.  The jury ordered Nevada’s largest HMO to pay $500 million in punitive damages.

Attorneys for the two companies issued a statement saying they’re disappointed but not surprised by the civil trial verdict in Clark County District Court.  They argue they were blocked from showing that company officials didn’t know a doctor in their network was endangering patients with unsafe endoscopy practices at outpatient clinics in Las Vegas.

For the plaintiffs’ part, they claimed, and the jury evidently believed, that the defendants signed a low-bid contract with the physician who operated the clinic where the outbreak started, despite warnings of lackluster procedural safeguards and financial problems placing the patients at an increased risk of contracting blood-borne diseases.

According to the plaintiffs’ attorney, “the jury sent a strong message not only to HPN and Sierra Health, but to every HMO and health insurance company in this country, you’ve got to provide a fair and responsible reimbursement rate to medical providers so that they are able to provide quality health care to their insured members.”

The verdict does raise flags about HMOs using the low bid as the only or main basis for contracting with a given medical provider.  And considering the punitive damages were almost 21 times greater than the compensatory damages, one thing is very clear: an appeal will be forthcoming.