February 1, 2001 Legal News

Georgia Supreme Court Rules Blue to Disclose Fees
Wrongful Death and Emotional Distress
Mass. Settlement in Childís Death

Gynecologist Convicted for False Billing

Trustee Liability
Invasion of Privacy
Drug Wholesale Prices
Malpractice Offer Not Accepted
EMTALA
Sexual Assault
MD Group v Hospital
Patient Record Confidentiality
HCA pays $65 Million in Fines.
Physician Gets Back License
VA Hospitals Breaking Immigration Law


Georgia Supreme Court Rules Blue to Disclose Fees

The Court upheld a lower court verdict requiring Blue Cross to disclose fees paid to physicians and how they were determined. The Blue Cross contracts pay the usual and customary fees as paid by indemnity insurance. Blue Cross then switched to paying usual and customary but added to the mix not only indemnity but also Medicare and Medicaid fees. This reduced the amount paid to the physicians. This means that Blue Cross has the ability to pay lower fees but must disclose how they were determined. Top

Wrongful Death and Emotional Distress

            Bird v Saenz
            Ca. Ct. Appeal
In a motion for summary judgment the trial court ruled for the defendant physician in both a wrongful death action and intentional infliction of emotional distress. The Ct. of Appeal overturned the trial court and sent the case back for trial. The facts are the plaintiff had a Stage IIIC Ovarian cancer treated initially with a debulking operation. The CA125 went from 1830 to 14. Bird was scheduled for an outplacement insertion of a port-a-cath for subsequent chemotherapy. During the placement the Subclavian vein and artery were transected and the patient required a surgical procedure. After the procedure the patient was rolled to ICU past her waiting relatives who witnessed their mother "blown up like a balloon." Several hours later she went into shock and was again wheeled past the relatives back to surgery with multiple blood bags hanging. Another operation was performed and the damage repaired. The mishap caused a significant delay in the onset of chemotherapy with an increase again in the marker. The patient died a year later with ovarian carcinomatosis. The summary judgment for wrongful death hinged on whether or not the delay caused by the mishap shortened the patientís lifespan. The appeal court said after reading the testimony of the two sideís expert witnesses that the mishap played a concurrent factor in the time of death. The negligent inflection emotional distress issue was originally tossed because the plaintiffs did not witness the actual transection of the vessels. The appeals court reinstated that issue since the bystanders were closely related to the victim, suffered severe emotional distress and were contemporaneously present and had sensory awareness of the causal connection when the event occurred. I doubt this case will ever be heard of again due to settlement. Top

Mass. Settlement for Childís Death

In the latest of unexplained deaths at Newton-Wellesley Hospital a four-year old child was admitted for a colon motility study the night prior to the exam. She was kept NPO and then had a normal colonoscopy the following day under sedation. Following the procedure a nurse gave the child water per rectum for the remainder of the motility study. The child complained of a headache, vomited considerably and then became stuporous, convulsions and finally cardiac arrest. The death was due to hyponatremia. The following day when an attempt was made to explain to the parents the reason for the death, the pediatric gastroenterologist stated that the conference wasnít about suing or lawsuits. I wonder how the new JCAHO rule of hospitals making physicians tell patients when things do not go as planned will lead to more lawsuits. I would continue to advise hospitals to take a Type I rather than comply with the rule.                                 Top

Gynecologist Convicted for False Billing

In a case not involving Medicare a gynecologist and anesthesiologist were convicted for defrauding insurance companies. They stated that infertility studies that were not covered were procedures usually covered by insurers. They face severe fines and 20 years in prison.                             Top

Trustee Liability

Are you a member of your Board? If so, you are liable if you do not do your homework, states an article by the Cain Bros. This is becoming more prevalent in troubled hospitals or systems. It is the deep pocket theory. As a trustee or member of a Board you are held to a duty of care and loyalty that is extremely high. This means you have the duty of care that a reasonable prudent person would exercise in similar circumstances and a loyalty to the institution, not to yourself. You may not be charged with negligence if you have exercised your business judgment. In order to do that, you must be involved in the decision making process by questioning and participating and not be present only to rubber stamp that which the CEO or corporate lawyer states. There is no such thing as an honorary board member. Creditors will scour corporate minutes for areas of ineptitude for director liability. It is hoped that you have enough D & O insurance to pay or you will. You should consider reviewing the Board structure to make sure it and its committees are the best possible. Board members should have some expertise and not be placed there only because they are good fundraisers. The members need education as to their duties. Regular financial updates should be given in terms all can understand. If you do not do these, you may be financially at risk.

Invasion of Privacy

Sanchez-Scott v Alza Pharmaceuticals
Ca. Ct. of Appeal

A breast cancer patient came in for her routine check-up. The physician and another man came into the examining room. The other man was introduced by name only. He was a representative of Alza watching oncology exams as part of a mentoring program. The woman felt flushed and started to fan herself. The oncologist took the fan and gave it to the Alza person stating " This will give him something to do." The woman was asked to disrobe so the physician could examine her breasts and axcilla as well as her abdomen. The woman claims she felt funny disrobing in front of a stranger. The woman dressed, was told she needed a mammogram and left the office. Upon leaving she told the receptionist about her embarrassment and was told "That is not right". The patient called back and expressed her problem to the physician and then sued. The trial court ruled for Alza on the grounds that the invasion was not highly offensive to a reasonable person. The appeals court reversed and sent the case back for trial since the trial court erred in its reasoning. Taken as a whole the episode was offensive to a reasonable person. Would you ever allow someone in your office during any examination without an explanation as to who he or she is and receiving the explicit consent of the patient? Top

Drug Wholesale Prices

Bayer has agreed without admitting liability to pay a $14 million fine for falsely raising the wholesale drug price which Medicare and Medicaid use to gauge payments. The money will go back to the Medicaid program. Top

Malpractice Offer Not Accepted

In the case of Garstang v Regent of California regarding a malpractice claim for a failed TRAM breast reconstruction following radiation therapy and the use of small doses of Keflex for the resulting infection, the plaintiff offered to settle for $29,999. The Regents rejected the settlement offer and went to trial. The jury came back with a verdict for the plaintiff in the amount of $405,000, reduced to $255,000 due to MICRA. Sometimes it pays to consider an offer. Top

EMTALA

Arrington v Wong
9th Circuit

In an important case the 9th Ct. of Appeals (ours) ruled that EMTALA applies to an ambulance not owned by a hospital. This is directly against other court rulings that state in order for EMTLA to apply to an ambulance company; the ambulance must be hospital owned. The facts of the case are Arrington suffered a myocardial infarction and was picked up by an ambulance. The ambulance radioed to the hospital of their arrival and the severe respiratory distress of the patient. The ambulance was told by Dr. Wong to go to another hospital five miles further since the patient was a patient at that military hospital. The patient died shortly after arrival at the distant hospital. This means there can not be any ambulance diversions unless the receiving hospital lacks the capacity to treat the patient. Top

Sexual Assault

N.X. v Cabrini Med. Ctr.
NY App. Division

In this New York case a hospital employee, a surgical resident, sexually assaulted a patient. The patient sued the hospital under the theories of vicarious liability and lack of supervision. The patient lost since the resident was not acting within the scope of his employment while caring out the assault. Since the act was not foreseeable there could be no causation and no liability. We have a similar case in California where a radiology technician sexually assaulted a patient with the same reasoning and result. Top

MD Group v Hospital

Allen Neurosurgical Associates v Lehigh Valley Health Network
E.D. Pa. District Court

The neurosurgical group decided to no longer provide free trauma backup call. The hospital threatened them with loss of privileges. The group filed suit in federal court alleging RICO violation for violation of the anti-kickback and anti-referral statutes. The court said these acts do not come under the federal regulation of racketeering and tossed the case. There was nothing in the case stating the decision of the group to provide services or the hospital in terminating their privileges. Top

Patient Record Confidentiality

Rademan v Superior Court LA (Joseph)
CA Ct Appeal

This case evolves around a psychotherapistís patient records and the ability of the court to see these records in a criminal case to determine if an exception to the privilege is valid. Rademan, a psychiatrist, was accused by the MBC of illegal acts of prescribing controlled substances. The board wanted a patientís record, issued an investigative subpoena and Rademan refused to give it citing the patient therapist privilege. The trial court said the board could have the entire record under the crime/tort, the enabling or aiding of a crime, exception, to the privilege. The appeals court reversed and said the trial court must look at the record en camera (judge only) and make a decision whether or not the exception exists and how much, if any, of the record the board is entitled to. Top

HCA pays $65 Million in Fines

HCA has agreed to payment of $65 million in fines to settle the Florida criminal case of conspiring to defraud Medicare. The money in this case and the additional $30 million HCA paid for settlement in the Texas action for the same crime went to the victimís fund. This fund pays victims of crime and also pays for anti-crime programs. The crime is the money does not go to the Medicare Fund from which it was removed and where it would do the most good. Top

Physician Gets Back License

The New York Department of Health Hearing Committee gave back Dr. Arbitís license and put him on probation for three years. The Department had removed the physicianís license earlier after being accused of operating on the wrong side of a patientís brain. He had earlier operated on the wrong side of another patientís spine. The Department of Health will appeal its own hearing committeeís findings.                         Top

VA Hospitals Breaking Immigration Laws

In a story the Cleveland Plain Dealer wrote regarding the VA system hiring foreign physicians for part time physicians in their hospitals. The law states that foreigners are to stay only for full time jobs. The article states that while many are excellent physicians, others have questionable medical education and have difficulty communicating in English. In 1999 three VA hospitals hired foreign graduates even though US physicians applied and VA and immigration rules prohibited the hiring. VA records show that not all hospitals attempt to hire American physicians prior to hiring foreign physicians. Neither the U.S. State Department nor the INS has ever turned down an applicant approved by the VA. There are many locations that are considered undesirable and mainly foreign medical graduates staff those.

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DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.