Holland & Hart Healthcare Law Blog

THE REPUBLICAN HEALTH CARE LIABILITY REFORM PACKAGE

Greg Piche' — Sun, 08 Nov 2009 14:34:12 -0700

Deep in the Republican Alternative Healthcare reform proposal unveiled by Rep. John Boehner (R) Ohio on November third, (The “Common sense Health Care Reform and Affordability Act,” can be found “Division C- Enacting Real Medical Liability Reform.” This section purports to nationalize state medical malpractice and medical product liability law and procedure into a uniform federal code which provides greater protection for doctors, pharmaceutical companies and medical device manufacturers.

Section 301 euphemistically entitled “Encouraging speedy resolution of claims,” shortens the statute of limitations, the time frame in which a claimant must bring an action. In most states it is two years from date of the discovery of an actionable claim. The Republican proposal limits the time to the lesser of three years after the date of the first manifestation of the injury or one year after the plaintiff discovers or should have discovered the injury. In other words, three years after one becomes aware of the damage or one year after one becomes aware or should have become aware of a legal health care claim against a particular defendant, absent proof of fraud, intentional concealment or the presence of a scalpel or other non therapeutic foreign object left in the body.

Limitations of actins by minors are usually tolled until after the minor reaches majority. Here the supported standard requires that an injured child (or a parent or guardian on the child’s behalf) bring an action the later of 3 years from the manifestation of the injury or before the minor’s eighth birthday. (Cause for a special celebration on the eighth birthday? No more legal claims for your damage. Welcome to suck it up manhood?)

The compensation to plaintiffs in “health care lawsuits” is limited to provable economic losses plus a cap of $250,000 on non-economic damages like pain and suffering.

The proposed statute directs courts to supervise the contractual relationship between plaintiffs and their attorneys involving contingent fees “based upon the interests of justice and principles of equity.” It sets a ceiling on contingent compensation to 1) 40% of the first $50,000; 2) a third of the next $50,000; 25% of the next $500,000; and 4) 15% of anything awarded over $600,000. Although couched in terms of maximizing patient recovery,” it seems clearly aimed at reducing an attorney’s ardor for making a big score on behalf of the patient.

Interestingly, Sec. 304 of the proposal provides for the introduction of evidence by either party of collateral source befits, such as insurance coverage and eliminates any subrogation claims by insurance companies to any part of any award recovered by the plaintiff. This essentially reduces the economic damages to the plaintiff to the extent that he or she is covered by insurance or other third party protection.

Sec. 305 guts most claims for punitive damages. No claim for punitive damages may be brought in any complaint. A complaint may be amended to add a claim for punitive damages in the event the court finds that the plaintiff can make a showing of a “substantial probability that the claimant will prevail on a claim for punitive damages. In order to obtain an award of punitive damages a plaintiff must prove, by an elevated standard of “clear and convincing evidence” that the defendant acted with malicious intent to injure the patient. (“Nurse, I intend to kill this patient just for the fun of it. Scalpel please”). There would be no more punitive damages for reckless conduct.

Under Sec. 306, an award in excess of $50,000. will be converted at the request of any party (i.e. the defendant) into a periodic payment plan. (“Lets see, a thousand a year, plus interest over 50 years plus interest. I am sure the hospital and your other healthcare creditors will be willing to wait for their money.”)

The Bill’s proposal applies to any “health care lawsuit,” meaning any healthcare liability claim concerning the provision of health care goods or service or any medical product affecting interstate commerce, brought in any state or federal court venue or in any arbitration or other adjudicatory proceeding. A “medical product” means any drug, device, or biological product intended for humans. All in all a nice gesture to the health insurance, pharmaceutical and medical device industries – but then the reality. In the real political reality world where most of us operate, Reverend Al Sharpton (D) New York would have a better chance being elected Pope than this bill would have in being enacted into law. Perhaps it should be called the “Sixth Sense Health Care Reform and Affordability Act.”

"TOKE TIME" FOR MEDICAL MARIJUANA – New Federal Enforcement Rules Announced.

Greg Piche' — Mon, 19 Oct 2009 15:30:58 -0600

The Justice Department announced new guidelines for medical marijuana use and dispensaries today that directs federal law enforcement officials to reallocate their resources away from federal prosecution of medical marijuana users and dispensaries in states that have “legalized” medical marijuana. The Justice Department will continue their pursuit of serious drug traffickers and those engaged in violence, money laundering , sales to minors and in the unlawful use of firearms. They will also pursue those attempting to use the distribution of medical marijuana as a cover for illegal use or trafficking.

A number of state laws such as those of Colorado, authorize the use of medical marijuana in the State, but provide little or no guidelines for the production or dispensing of the drug, leaving many MMEntrepreneurs up in the air as to how to protect themselves from federal prosecution despite the state authorization. Recent prosecutions in California have given rise to concerns about regulatory limbo for both patients and distributors.

Lamar Smith, (R. Tex.). the leading Republican member on the House Judiciary Committee was none to happy with Justice’s action.

"But we cannot hope to eradicate the drug trade if we do not first address the cash cow for most drug trafficking organizations -- marijuana, .. .Illegal marijuana sales in the U.S. help fund the illegal drug trade. By directing federal law enforcement officers to ignore federal drug laws, the administration is tacitly condoning the use of marijuana in the U.S. If we want to win the war on drugs, federal prosecutors have a responsibility to investigate and prosecute all medical marijuana dispensaries and not just those that are merely fronts for illegal marijuana distribution."

Seems like pulling resources away from prosecuting patients and legitimate growers and dispensers of medical marijuana would reduce the demand, lower the price, reduce violence and free up scarce federal resources for other purposes. Since winning the war on drugs is considerably less likely than winning the war in Afghanistan, this would appear to be a step in the right direction.

10th Circuit Affirms Summary Dismissal of Nephrologists’ Monopolization Shootout in the Streets of Durango.

Greg Piche' — Fri, 09 Oct 2009 18:05:05 -0600

Dr. Mark F. Bevan has a thriving nephrology practice in Farmington, New Mexico. Mercy Medical Center of nearby Durango, Colorado repeatedly invited him to provide kidney dialysis and other nephrology services in’ Durango, which he declined. The hospital then with the financial support of the Southern Ute Indian Tribe hired a different nephrologist to practice his craft in Durango. Under the pre-existing bylaws of the Hospital, the hiring of the new doctor automatically resulted in the cancellation of Dr. Bevan’s consulting privileges at the hospital. Consulting privileges were designed for the purpose of filling gaps in physician coverage. He was left with the status of being a member of the consulting staff. He then applied for active staff privileges at the hospital , but found it difficult to ethically meet the requirement in the by-laws that he reside within 30 minutes of the hospital. The hospital, in an attempt to pre-empt and residential success by Dr. Bevan, granted the new physician the exclusive right to practice nephrology at the hospital. Dr. Bevan responded with a claim of monopolization and attempted monopolization of the nephrology physician services in Durango in violation of Section 2 of the Sherman Act.

In Four Corner’s Nephrology Associates, P.C. et al v. Mercy Medical Center of Durango, No. 08-1231 (10th Cir. 2009), a panel of the Tenth Circuit Court of Appeals affirmed the summary dismissal, on the basis that even if a monopolist, the Hospital had no duty to deal with Dr. Bevan and that Dr. Bevan was unable to describe any anti-trust injury. The court noted that .monopoly power was not itself illegal. It is only illegal when accompanied with an element of anticompetitive conduct. The Court perceived that the refusal to permit Dr. Bevan to access its facilities was a reflection of “competitive zeal” to maximize its own short term profits. the conduct was procompetitive, not anti-competitive.

What then about the Aspen Ski case where the Supreme Court held that the Aspen Ski company engaged in anti-competitive conduct by dropping the Aspen Highlands from its four resort ski pass, even though the ski pass arrangement was profitable to Aspen Ski.. The Court noted that the right to refuse to deal is not unqualified and that Aspen Ski had abandoned short term profits for long term monopoly by attempting to drive Highlands out of the market.. the key difference according the Court is that the desire to exclude competitors from one’s facility in order to make more money now is OK and procompetitive, while the willingness to accept short term losses to make more money down stream through the maintenance of a monopoly is not.

The pesky question of antitrust injury also arose here. Antitrust laws are not designed to protect competitors, but to protect consumers. The Court perceived Dr. Bevan’s attempt to join the medical staff of the hospital as more of an effort to participate in the benefits of a monopoly than to protect consumers. It is of course the Court’s perception that counts.

“Don’t Touch The Sheriff:” Tepid Reaction to harassment claim by Chiropractic Practice Results In $100,000.00 Title VII Verdict for Nebraska Therapist

Greg Piche' — Thu, 01 Oct 2009 11:23:10 -0600

One would think that a health care practice group would be on its toes in dealing with a potential Title VII complainant whose last name was Sheriff and its failure to take her full measure and to promptly and reasonably initiate appropriate action resulted in a $100,000.00 verdict in Federal Court for the plaintiff. In Sherri Sheriff v. Midwest Health Partners, P.C. et al., 8:07CV 475, (D. Neb. 2009), the Court upheld a jury verdict in Ms. Sheriff’s favor. The defendants argued that the conduct involved did not arise to the creation of a hostile environment and the evidence was insufficient to substantiate the damages, to establish a causal nexus between the conduct and the plaintiff’s gender, insufficiently severe enough to rise to actionable harm and the or to establish that the defendants failed to take prompt remedial action.

The conduct involved Dr. Curtis Meyer kissing her on the temple when she delivered coffee; and after she complained, squeezing her and pulling her toward him involving contact with her breasts, raising his hands in the air, when she came near him in a mocking manner.

The practice group delayed meeting with Dr. Meyer until two months after the complaint and only requested, but did not order him to undertake counseling. The defendants were unable to identify the employee who was responsible for undertaking an investigation of Dr. Meyer’s conduct. Dr. Meyer eventually agreed to attend a five-day training session about harassment and discrimination, but refused to undertake any type of mental health or psychological counseling. Dr. Meyer spent only one day in training, where after Ms. Sheriff resigned claiming constructive termination.

In order to prevail in a claim of hostile work environment, Ms. Sheriff had to establish that her employer knew or should have known of the harassment and failed to take prompt an effective remedial action. In determining whether the employer undertook reasonable remedial measures the courts look at the length of time between the notice of the harassment to the employer and the amount time elapsing before the remedial conduct, the options available to the employer to control the conduct and whether or not the remedial measures ended the harassment. The time delay and feeble response were insufficient to duck Federal sanctions. The practice was unable to show that the conduct was sufficiently benign and that her damages were unsustainable. This is a cautionary tale for any professional practice. Don’t let your people continue to mess with the sheriff.

HEALTHCARE REFORM PART III:-THERE WILL BE PAIN!

Greg Piche' — Mon, 31 Aug 2009 15:34:06 -0600

One of the unfortunate realities about Health Care Reform is that there will be pain. The current trajectory of health insurance costs is unsustainable. We are pushing 18% of the Gross National Product, more than double other industrialized countries and severely depressing our competitive edge in the world economy. Left unattended health care will continue to eat into American productivity, lifestyle, competitiveness and influence. The solutions are not difficult to understand. The question is how to equitably distribute the pain. The strategy of “just saying no “ will just momentarily and ineffectively defer the pain. There are three ways, or combinations there of to do it. The menu please!

1. Control Access. I mean really control it. If you can afford it you get it. If not you don’t. Repeal EMTALA and refuse to allow people in extremis into emergency rooms. Just refer them to real “death panel” alternatives for disposal. The present system of not providing universal health care coverage and prevention services expands the severity of people appearing in the emergency room of hospitals and results in cost transfers in increased charges by health care providers which ratchet up the costs of insurance premiums. The withholding of prenatal care frequently results in massive societal costs in the care and treatment of abnormal children whose afflictions could have been prevented with proper care. Leave it up to individuals to pay for the health care insurance, not companies. that would make us more competitive and further limit utilization by the rapidly constricting middle class. If health care is a benefit, not a right you have only a limited number of choices – earn it; steal it; beg for it or lump it.

2. Control Utilization. Yes, we are talking about the “R” word – rationing.. It is going on right now. Just ask your insurance company for access to a promising, but experimental drug regimen or procedure and see what the result is. Expect more of it and get over it. Yes you can get it, if you can afford it. We can approach the expensive chronic illnesses and end of life care with rationing of care or with prevention or with greater efficiency of evidence based medicine, and EMR, but not likely without significant government intervention. We Americans are always looking on the horizon for the prospect of a cure that will extend our useful lives, but that dream will likely require some modifications and limitations. If you want to live free or die, die might just be the answer, unless you can afford it. If health reform arrives, expect at least a three tiered system here – the Cadillac; the Chevy and the Yugo.

3. Control Rates. Lots of issues here. Those insurance systems and medical systems that effectively control costs operate on a physician salary basis. Kaiser, the Mayo Clinic all pay their physicians a salary with some structure of bonus. Fee for service medicine is a luxury that has had its day and will not likely survive meaningful health reform. We cannot continue to turn out more and more doctors with more and more school debt to recover in more and more narrow specialties so award more and more compensation based upon more and more tests and procedures. We cannot duplicate expensive medical technology in every urban hospital and bill the government and the public for the down time. Again the idea of private medicine will be a fixture of the past. Those physicians who can truly stand on their own without government or insurance support will likely be free to do so, but that will be a narrow segment of medicine. Are we heading to socialized medicine. No, we arrived many years ago. The public sector is only now insisting on a return on its investment. Insurance reform will need to be part of the picture as insurance companies will have to and frankly should justify their reason for existing and generating those huge executive salaries through meaningful contribution to the system.

These are the moving parts of health care reform – so simple and yet so complex, with so many oxen to gore and so much pain to be distributed. Scalpel please!!!

CMS ISSUES MEMORANDUM REGARDING HOSPITAL EMTALA OPTIONS IN EVENT OF H1N1 FLU PANDEMIC.

Greg Piche' — Fri, 28 Aug 2009 15:34:01 -0600

On August 14, 2009, CMS issued a memorandum on requirements of hospitals under the Emergency Medical Treatment and Labor Act (“EMTALA”) in the event of a surge in hospital emergency room visits for H1N1 influenza treatment. EMTALA requires all hospitals to provide an appropriate medical screening examination on presentation to determine whether the patient has an Emergency Medical Condition. If it determines that one exists, the hospital must treat and stabilize the patient within its capacity or transfer a patient to a hospital that has a capability and capacity to stabilize the condition. In anticipation of a surge in emergency room visits CMS issued additional guidance for hospitals to comply with EMTALA.

The Memorandum suggests the development of alternative screening sites on the medical campus of the hospital and the tailoring of the medical evaluation to the needs of the circumstances, either simple or complex as the presenting case may be. The hospitals must provide qualified personnel and provide stabilizing treatment or appropriate transfer, including moving them from the alternative site to other on campus departments.

Hospitals may encourage patients to go to off campus, hospital controlled sites but cannot direct patients arriving on campus to go to off campus sites. Unless the off campus site is already designated as and Emergency Department of the Hospital, EMTALA regulations due not apply there. The off campus site should be staffed with people trained to evaluate people with Influence Like Illness. (“ILI”). Hospitals are encouraged to coordinate referral and transportation efforts for people with continuing emergency treatment needs to appropriate facilities. The Memorandum advises that CMS may issue waivers that will permit hospitals to redirect patients to off campus sites in accordance with a State emergency or pandemic preparedness plan and to effect transfers ordinarily prohibited by EMTALA so long as the transfer is necessitated by the circumstances of the declared emergency.