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 Colorado, health insurance carriers, health maintenance organizations (HMOs), and other managed care entities are expected to adhere to a standard of ordinary care when making decisions about health care treatments. If they fail to exercise this level of care, they can be held liable for any harm that comes to an insured person as a result. This liability can arise from specific state statutes or from Colorado's common law under a negligence theory. The negligence theory would require demonstrating that the entity breached a reasonable standard of care that it owed to the insured, and that this breach was the proximate cause of harm to the insured. It's important for entities and insured individuals to understand these obligations and rights under Colorado law to ensure that health care decisions are made with the appropriate level of care and to address any instances where harm may have resulted from a failure to meet this standard.