December 1, 2000

Legal Cases


HMO Disclosures
HMO Disclosures
Negligent Credentialing
Incident Reports
Exclusive Contracts
Lyme Disease and Licensure
Employment Arbitration Agreements Unenforceable
California Court Prohibits Government from Revoking MD License for Marijuana Recommendation
US Supreme Court to Look at Proposition 215 and Health Plan Reimbursement
Penn. Court states Hospital not Liable for Informed Consent
Wash. Court states there is a Tort for Unauthorized Disclosure of Information
MD Liability from a Curbside Consult
MD and Hospital Fraud Charges, a New Federal Tactic
Texas Medical Association and HMOs Settle ADA Case
NY Action Against MDs Overturned

Peterson v. CGLIC (Disclosure on MD Financial Rewards to Patients)
3rd USCA

The Federal Appeals Court stated that HMOs, here Connecticut General Life Assurance Company (CGLIC), do not have to tell its members about the financial rewards it pays to physicians. The court stated that the HMO only had to disclose the financial incentive if a specific inquiry was made or where the HMO knew of particular requirements of a patient requiring disclosure and the non-disclosure resulted in an injury. The information was present on the CGLIC web site. The court also took into account recent congressional action where both houses passed separate bills to address the financial disclosure, but only when upon request. The plaintiff never claimed that she was not reimbursed for medical expenses, denied care or treated improperly by a physician.

Therese Neade v. Steven Portes MD and Primary Care Family Center
(Managed Care Plan has Duty to Disclose Financial Information to a Patient)
Illinois Supreme Court

In a state verdict seemingly opposed to the Federal one above, the Illinois high court ruled that when a patient sues a physician for malpractice, they may not also sue for failure to reveal payment arrangements with managed care companies. The court stated that it is up to the managed care company to tell their clients the financial between them and their physicians. This case is different from the above case, as it did not cover ERISA. The facts were a patient with chest pain with radiation to the neck and arm was recommended to undergo an angiogram. The primary physician never ordered one; instead he relied on hospital tests done 10 months earlier, including a thallium stress test and EKG. Those were normal and a GI diagnosis made. The patient died of a myocardial infarct. The primary care group received a 60% share of any money not used on referral to specialists. The Supreme Court stated that the failure of telling the patient duplicates a malpractice claim.

Case Name Unknown
Texas Trial Court

A jury awarded a physician $4 million dollars in compensatory damages for unfairly dropping him from Humana Health panel. By dropping Dr. John Schulze due to his unwillingness to accept inadequate care, he lost approximately 800 patients. He claimed patients were being released too early from hospitals. Humana stated that Dr. Schulze "has faults." The jury is currently out on potential punitive damages.

Winona Memorial Hospital v. Kuenster (Negligent Credentialing)
Ind. Ct. App.

The plaintiff sued a hospital for negligent credentialing for a surgeon accused of medical malpractice. The plaintiff attempted to get around the Indiana Malpractice Caps. The court said the claim of negligent credentialing was directly related to malpractice and came under the Indiana Malpractice Act. This was true since the deciding factor in negligent credentialing was whether or not the physician was the cause of the injury.

State of Nebraska ex rel. Amisub, Inc. v Buckley (Incident Reports)
Nebraska Supreme Court

The Nebraska Supreme Court ruled in a malpractice case by a patient falling out of bed in a hospital that incident reports are discoverable. The court ruled the plaintiff could have not only this patientís report but also the reports of all reports of other patients who fell at the hospital. Since these reports are for the hospitalís internal review and even if they had been created at the request of any medical staff committee they are only factual and not privileged under Nebraska Law. It is also probable these reports are not protected in California.

Garibaldi v Applebaum (Exclusive Contracts)
Illinois Supreme Court

In this case an exclusive contract was given to a group of cardiovascular surgeons leaving out another surgeon on the staff. The excluded surgeon sued for loss of privileges and a right to a medical staff hearing. The court ruled that since the excluded surgeonís privileges were not revoked, suspended or reduced within the meaning of the bylaws and there was no challenge to any clinical competence no hearing was mandated. The court distinguished the granting of privileges, which qualifies a physician to practice in a hospital from the right to exercise those privileges made up of hospital administrative decisions unrelated to clinical competence. In California it has been long settled that exclusive contracts are legal for bona fide hospital reasons. However, if a hospital has a MediCal contract it may not have exclusive contracts.

Lyme Disease and Licensure

The New York Times on 11/10/00 states that New York has charged a Long Island physician for improper treatment of patients. Apparently there are two schools of thought regarding Lyme Disease treatment. The first is to treat with antibiotics for thirty days. This side has the blessing of the Dr. Charles Cutler, chief medical officer of the American Association of Health Plans. He stated that this is overuse of antibiotics. "Our concern is for good health quality care, and in this instance and others, good quality can cost less. But we have no financial incentive, our overriding intent is to do the right thing." The other school is the belief that in about 10% of the cases, long term clinical and antibiotic treatment is needed. This could be years of therapy. Twenty physicians from 10 states, Germany and Switzerland have signed a petition supporting the accused physician. His patients have also gone to bat for the physician. So far about 50 physicians nationwide have been subject to investigation or discipline for treating Lyme Disease patients. The legal question for me is if there are two reasonable schools of thought on an illness, is only one right? The courts have split on this issue.

Employee Arbitration Agreement Unenforceable
Armendariz v. Foundation Health Psychcare
6 P. 3d 669

The California Supreme Court ruled that the entire contract between the employer and employees was against public policy since it was an adhesion contract (a contract that is take it or leave it and one party has an unfair advantage over another). The Court of Appeal had ordered the unconscionable aspects of the contract to be severed and to enforce the remainder of the contract. The Supreme Court reversed finding the entire arbitration clause had two unlawful provisions and was therefore entirely void. It also found the contract to be unconscionably unilateral since imposed as a condition of employment a condition with no opportunity for negotiation as well as prohibiting employees from fully recovering damages with no such restrictions on Foundation.

U.S. Court in California Prohibits Revocation of MD DEA License for Recommending Marijuana
Conant v. McCaffrey
N.D. Cal. Sept. 7, 2000

This case involved the government against the passage of Proposition 215 in 1996. Dr. Mastroianni was believed to have given a patient a written recommendation for the compassionate use of Marijuana against the DOJ unilateral policy of not doing so. The court looked at this as a restraint on protected speech. The court believed the "legitimate interests of speaking freely with patients" outweighed the "legitimate government interests in controlling the flow of dangerous substances in the United States". Since a recommendation does not translate into an absolute violation of federal law and even if the patient did purchase the controlled substance the physician would not have committed a federal offense. The court therefore enjoined the government from revoking a physicianís DEA license based on a recommendation of medical marijuana that was based on sincere medical judgment. The court also prohibited the government from initiating an investigation of the physician solely on the grounds of a recommendation.

US Supreme Court to Look at Proposition 215 and Health Plan Reimbursement

The US Supreme court has agreed to decide this term whether Proposition 215 and similar laws in other states are legal as one looks at a "medical necessity" defense for the use and distribution of marijuana (US v. Oakland Cannabis Buyersí Cooperative).

In another case the court will decide whether people injured and receive money for health benefits will have to return that money to the insurer if they also received money for the same thing from another source (the party that did the injury).

Penn. Court States Hospital is not Liable for Failure of Informed Consent
Valles v. Albert Einstein Med. Ctr.
Pa. Super. Ct. August 24, 2000

In this malpractice case against a physician and hospital, the deceased plaintiffís estate alleged the failure of the physician to obtain informed consent and against the hospital for the same cause. The trial court issued a summary judgement in favor of the defendants and the Court of Appeal agreed. The physician had no duty to explain all sites that may be used for the placement of an angiography catheter and the hospital had no control over what even an employed physician explained to the patient as an informed consent issue. There was a dissent that stated the hospital could be liable for the physicianís actions and that there was an issue of dispute of catheter placement that the jury should decide. In California, where there can not be any hospital-employed physicians, the informed consent process rests solely on the physician. The hospital consent form should only state that the physician has explained the procedure. No hospital employee has the duty to explain any procedure.

Washington Court States There is a Tort of Disclosure of Private Information
Berger v. Sonneland
1 P. 3rd 1187

A patient revealed a medical fact to a physician who contacted the patientís ex-husband, another physician regarding the narcotic use. Based on this information, the ex filed a motion for modification of custody support. The patient sued the physician for breach of physician-patient confidentiality. The Court of Appeals stated that the plaintiff if she proved her case was allowed damages for (1) harm directly from the unauthorized disclosure, (2) mental distress proved to have been suffered from the unauthorized disclosure, and (3) special damage of which the unauthorized disclosure is a legal cause. No expert is needed here since there is no violation of a standard of care related to a medical procedure.

Arizona Court states there is a Duty to Patient by Doing a Curbside Consult
Diggs v. Arizona Cardiologists, Ltd.
Ariz. Ct. App. August 8, 2000

The patient came to the ED by ambulance with chest pain. The ED physician did an EKG that was read by a computer as compatible with a myocardial infarction. The ED physician thought the problem was pericarditis and asked a cardiologist who was in the ED to look at the EKG since the ED physician could not read an EKG. The cardiologist agreed with the ED physician, but never saw or treated the patient and was not on call. Based on the "curbside" the patient was released on an anti-inflammatory agent. She died from a MI 3 hours later. The estate sued the ED physician, hospital and the cardiologist for medical malpractice. The question regarding the cardiologist is whether or not there was any duty of care owed to the patient. The trial court stated that there was no duty of care owed. The Court of Appeal over ruled and stated there was a duty since in Arizona the policy was to place duties on those most capable of preventing future harm to others caused by the intervening negligence of others. Since both the patient and the ED physician relied on the cardiologist, the cardiologist has a duty of care to the patient in providing medical advice. How many more "curbside consults" will be performed. Think of how many times you have done the same thing. Formal consults with appropriate monetary charging should be the standard.

MD and Hospital Fraud Charges, a New Federal Tactic

In a new tactic the Feds are using a statement by a hospital and medical group that they are in compliance with all federal laws against them. The organizations are accused of breaking the anti-kickback statute by overcharging rent to a leasing hospital on a building owned by a group of orthopedic surgeons. This possible anti-kickback and Stark violation for potentially receiving money for referrals caused them to potentially be not in compliance with all federal laws. The government contends this makes their statement untruthful. If the statement is not truthful is a violation of the False Claims Act and all money paid to the hospital and physicians from Medicare would have to be repaid to the government. The government filed the lawsuit in Michigan against the McLaren Regional Medical Center in Flint and the Family Orthopedic Associates. Watch this one. If it goes through it has huge ramifications.

Texas Medical Association and HMOs Settle ADA Case

The Texas Medical Association had sued Humana and PacifiCare for ADA violations in the treatment of chronic diseases. The case revolved around HMOs dropping physicians when they ran up bills treating patients with chronic diseases. The adversaries settled with terms not disclosed but the HMOs stated that it was not an admission of liability, a standard phrase that is usually meaningless.

NY Action Against MDs Overturned

After a complaint several Beth Israel Medical Center physicians were charged by the New York Department of Health of disregarding nurses warnings, using equipment not approved by the hospital and having an equipment representative assist in a routine operation and the patient died. A state panel from the Office of Medical Conduct overturned the Department of Health finding the accusations were mostly unproven.

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.