by Mark Bauman | May 24, 2023 | Health Care Law, Legal News
The PA Superior Court has held that a hospital waived the attorney-client and work-product privilege by forwarding correspondence written by their counsel regarding the naming of the doctor accused of performing medically-unnecessary stents, to a public relations firm the hospital hired to manage the public announcement concerning the overuse of stents.
In BouSamra v. Excela Health, 2017 PA Super 66 (Pa. Super. Ct. Mar. 13, 2017), the hospital hired an outside peer review organization to evaluate the stent utilization by physicians at the hospital. The organization’s report revealed that appellee doctor had performed unnecessary stent implants and the doctor subsequently heard about the report and resigned before his staff privileges were suspended. A second outside peer review corporation, hired by the hospital concluded that the doctor had overestimated arterial blockage and inappropriately treated mild narrowing with stents. The hospital then publicly announced the results and informed the affected patients.
The doctor sued alleging that the two peer review proceedings were pretextual and conducted in bad faith and assisted intentional interference with an existing and potential contractual relationship with defamation. During the discovery phase, appellee doctor sought production of documents related to planning and reasoning on the disclosure to the media of the peer review reports and naming the doctor. The hospital objected on attorney-client privilege and work-product doctrine grounds.
The doctor learned that a principal of the public relations firm hired by the hospital had received a letter written by outside counsel for the hospital concerning the public naming of the doctor. The doctor filed a motion to compel and the discovery master held that the attorney-client privilege applied. The doctor subsequently filed exceptions to the master’s ruling and the trial court held that the hospital had waived the attorney-client privilege by disseminating the letter to a third party – the public relations firm. The hospital appealed.
The hospital’s reliance on United States v. Kovel, 296 F.2d 918 (2d Cir. 1961) failed because the hospital could not show that the public relations firm was hired to aid in rendering legal advice on whether the doctor could be named or not. The hospital also failed to show that the public relations firm was an agent of the attorney and gave legal advice. The work product privilege was also waived by disclosing the correspondence to a third party, the public relations firm.
by Mark Bauman | May 23, 2023 | Health Care Law, Legal News
Overturning the trial court’s dismissal of the plaintiff’s lawsuit on preliminary objections, the Superior Court recently held that while a hospital was entitled to the limited immunity protections afforded it by the Mental Health Procedures Act (MHPA), the complaint had pled sufficient facts that, if true, could be found by a jury to constitute gross negligence.
In Martin v. Holy Spirit Hospital, 2017 Pa.Super. 11 (on appeal from Cumberland County Court of Common Pleas), the decedent had attempted suicide and was pulled from a second-story window by police. She was taken to the emergency room at Holy Spirit Hospital. There, the nursing staff recorded the decedent’s history of a suicide attempt and active suicidal thoughts, including a notation of “CRISIS; SUICIDAL.” The plaintiff alleged that a mental health protocol was initiated, and the decedent’s street clothes were removed and replaced with a hospital gown and slippers.
The plaintiff alleged that after about ninety minutes, the decedent still had not been seen or evaluated by a physician, and she was left unattended. She then walked past one nurses’ station and one billing desk, opened two sets of exit doors in the emergency room, then passed another nurses’ station and exited to the outside through sliding glass doors, all while gripping her head and wearing a hospital gown and slippers. Soon thereafter, the police responded to an accident on US 15, where the decedent was pronounced dead as a result of a motor vehicle collision. Her death was ruled a suicide by the county coroner.
Pennsylvania’s Department of Health conducted an investigation as a result of these events and found that this had been the ninth elopement of a mental health crisis patient from the emergency room without any crisis intervention evaluation in three and one-half months.
Plaintiff filed suit, and Holy Spirit Hospital filed preliminary objections on the basis of demurrer, alleging that it was entitled to immunity from this lawsuit in accordance with the MHPA, 50 P.S. §§ 7101-7503. The MHPA provides limited immunity to facilities providing mental health treatment absent willful misconduct or gross negligence. The trial court sustained Holy Spirit Hospital’s preliminary objections and dismissed the lawsuit, finding that the allegations did not amount to gross negligence so as to overcome the immunity provision of the MHPA.
The plaintiff appealed on two bases: (1) that the MHPA did not apply because the decedent had not seen a physician and thus was not being treated so as to trigger the MHPA; or (2) the facts as pled were sufficient to show gross negligence under the MHPA.
First, the Superior Court found that the MHPA was triggered by the facts alleged because the decedent was seen by trained nursing staff and some medical care had been provided. The complaint alleged that the nurses had taken the decedent’s history and given her a bed, hospital gown and slippers, and orange juice. The Court distinguished this case from Fogg v. Paoli Mem’l Hosp., 686 A.2d 1355 (Pa.Super. 1996), in which it had held a decedent had not received treatment for purposes of the MHPA. In that case, the decedent had waited in the emergency room and then proceeded down a hallway unescorted. He then ran towards a window, crashing through it and landing on a concrete driveway two stories below. In Fogg, the decedent had not seen any healthcare professionals; in this case, the Court reasoned, the decedent was seen and evaluated by nursing staff.
Because the Court found that Holy Spirit properly invoked the MHPA, it reviewed the alleged facts to determine whether gross negligence was adequately pled to permit further discovery. The Court noted that gross negligence is defined as “flagrant, grossly deviating from the ordinary standard of care.”[1] The Court also noted that whether the facts amount to gross negligence is a question for the jury. A court may take the issue from the jury only when the case is entirely free from doubt, and no reasonable jury could find that the acts or omissions constituted gross negligence.
The Court then quoted nearly thirty paragraphs from the plaintiff’s third amended complaint, which described how the decedent walked past a nurses’ station, past the ER discharge and billing desk, through two sets of unlocked exit doors to the emergency room lobby, past another nurses’ station, and then through sliding glass doors to the outside, all while gripping her head and wearing a hospital gown and slippers. The plaintiff also alleged that the hospital had notice of a problem with mental health crisis patients eloping, according the Department of Health’s investigation, and failed to take any action to protect future patients.
The Court held that these alleged facts were sufficient for a reasonable jury to find the hospital was grossly negligent. The Court noted that the plaintiff alleged that the hospital failed to take adequate precautions, failed to follow its own protocols, failed to monitor the decedent, failed to evaluate the patient for ninety minutes, and that this was the ninth mental health crisis patient in three and one-half months to elope from the emergency room. These facts, upon further development, could be found by a jury to constitute gross negligence.[2] Therefore, the trial court’s order of dismissal was reversed and the case was remanded for further proceedings.
[1] Citing Albright v. Abington Memorial Hosp., 548 Pa. 268 (1997).
[2] The Court cited to its similar holding in Bloom v. Dubois Regional Medical Center, 409 Pa.Super. 83 (1991) (reversing dismissal of case on preliminary objections based on immunity pursuant to MHPA, finding pleading alleged sufficient facts that if developed, may permit jury to find hospital’s acts constituted gross negligence).
by Mark Bauman | May 22, 2023 | Health Care Law, Legal News
In an opinion authored on November 14, 2012, a three-judge panel unanimously found that the statute banning wrongful birth and wrongful life actions in Pennsylvania (42 Pa.C.S.A. §8305) was enacted unconstitutionally.
Generally, wrongful birth is a claim made by the parents of a child born with birth defects, wherein the parents allege that the healthcare provider failed to warn them about the defects. Wrongful life, on the other hand, is a claim made by the child for failing to prevent the birth.
According to the panel, section 8305 violated the “single-subject rule” contained in Article III, Section 3 of the Pennsylvania Constitution, which requires that all provisions in a bill assist in carrying out a bill’s main objective or are otherwise germane to the bill’s subject. Section 8305 was signed into law as Act 47 of 1988. The panel examined the final version of that bill and concluded that the majority of the provisions related to post-trial matters in criminal cases. The panel therefore found that all provisions contained in Act 47 not related to post-trial matters in criminal cases, including section 8305, violated the “single-subject rule” and was enacted unconstitutionally.
by Mark Bauman | May 21, 2023 | Health Care Law, Legal News
On October 23, 2012, the U.S. Department of Health and Human Services, Office of Inspector General (OIG), issued a favorable Advisory Opinion (Opinion 12-15) regarding the payment of per diem fees by hospitals to physicians providing on-call coverage to unassigned patients who presented to the hospital’s emergency department. In its Opinion, the OIG advised that under the federal Anti-Kickback Statute, neither civil monetary penalties nor administrative sanctions would be imposed on the parties involved with the arrangement at issue.
Specifically, the arrangement at issue involved a charitable, tax-exempt hospital which operated its own emergency department on a 24/7 basis. As to those patients treated in the ED, approximately 19% were treated without compensation given to the hospital, while services rendered to the remaining 81% were reimbursed through some form of insurance, including federal health care programs. The ED was staffed by 130 specialist physicians who pursuant to a written agreement, provided unrestricted call coverage within the hospital. The agreement required the physicians to respond within thirty minutes of a call, regardless of whether they were on-site or elsewhere. In addition, the physicians were required to provide appropriate follow up care and other services in their office practices for any patients who they themselves admitted.
As payment for the physicians’ on-call services, the hospital created a per diem fee system pursuant to an analysis of various factors related to the physicians’ respective call burdens. These factors included the number of days per month the physicians would likely be called, the number of patients per call day they were likely to see, and the likely number of patients requiring inpatient and follow up care. Based on these factors, a total call coverage payment would be allocated and then divided by 365 to determine the per diem fee paid by the hospital to each individual physician.
The federal Anti-Kickback statute makes it a crime to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of services which are reimbursable by a federal health care program, such as Medicare or Medicaid. That said, there are several provisions under the statute which protect arrangements that fit within certain parameters, commonly referred to as “safe harbors.” Notably, the safe harbor pertinent to the arrangement at issue was identified by the OIG as one encompassing “personal services and management contracts.”
In deeming the arrangement at issue to have a “low risk” of fraud and abuse, the OIG took into account several factors. For example, the hospital had certified that its total call coverage payment allotment had been reviewed by an independent consultant, who in turn had certified that the coverage was commercially reasonable, consistent with the applicable fair market value, and independent of volume and/or value of referrals. The hospital had also certified that the physicians’ per diem fees were applied uniformly and were not dependent or based on the referral patterns of individual physicians. Noting the validity of the payments themselves, the OIG also determined that every year, the payments were calculated and allocated in advance, and were ultimately distributed independent of individual referral patterns. Finally, with regard to the services provided by the physicians, the OIG determined that such services were “actual and necessary,” and that the majority of them were paid for solely by the per diem payment allocated by the hospital.
Its opinion notwithstanding, the OIG noted several qualifications to its ruling, advising that its opinion was limited in scope to the specific arrangement at issue, could not be relied upon by any other individual entity, and was limited solely to the federal Anti-Kickback statute (as opposed to other state or federal laws).
by Mark Bauman | May 20, 2023 | Health Care Law, Legal News
In Tristani v. Richman, the United States Court of Appeals for the Third Circuit held that Medicaid liens on judgments or settlements limited to medical costs are not prohibited by the anti-lien and anti-recovery provisions of the Social Security Act, 42 U.S.C. § 1396p(a)-(b).
In Tristani, the Pennsylvania Department of Public Welfare (the DPW) paid medical benefits on behalf of three individuals who suffered injuries allegedly caused by the negligence of others. The three individuals filed separate lawsuits against the ostensibly negligent parties, seeking compensatory damages for the injuries they sustained. After the plaintiffs settled their lawsuits with the parties allegedly responsible for their injuries, the DPW asserted liens against each of the plaintiffs’ settlements for the amount of medical expenses paid on each respective plaintiffs’ behalf, less a proportionate share of the plaintiffs’ costs and attorneys fees. The plaintiffs then commenced a putative class action lawsuit against the DPW and the agency’s current and former secretaries in the United States District Court for the Western District of Pennsylvania seeking a determination of whether the DPW had authority to assert such liens against Medicaid beneficiaries.
Two years after initiating their lawsuit against the DPW, the plaintiffs filed a motion for summary judgment in which they asked the district court to declare that: (1) the Commonwealth’s practice of asserting Medicare liens is invalid; (2) the DPW’s ability to recover medical payments made by managed care organizations is limited to capitation payments made by the State; and (3) Pennsylvania’s current method of determining what portion of a settlement constitutes medical costs violates Supreme Court precedent. The district court denied the DPW’s motion after determining that federal law prohibited the DPW from asserting liens against third-party recoveries obtained by Medicaid beneficiaries. However, the district court further held that Pennsylvania’s method of apportioning settlements between medical costs and other portions of the recovery did not violate federal law. The parties then filed cross-appeals to the United States Court of Appeals for the Third Circuit.
On appeal, the Third Circuit began by noting that the Social Security Act (the Act) requires states, as a condition to receiving Medicaid assistance, to oblige Medicaid recipients to assign to the State any rights they may possess to recover medical costs from a third party. The Third Circuit further observed that the Act requires states to seek reimbursement for medical assistance payments made to Medicaid recipients whenever a state determines that a third party is legally liable to pay for a recipient’s medical care. The Third Circuit noted that the Act does not set forth a method by which states must seek reimbursement of medical assistance payments they have made.
The Third Circuit then remarked that the foregoing provisions of the Act conflict with other sections of the Act which prohibit states from imposing liens against the property of Medicaid beneficiaries or recovering any medical assistance properly paid on an individual’s behalf. The Court concluded that the plain language of these conflicting provisions could not be reconciled.
Nevertheless, the Third Circuit determined that the conflicting language in the Act was not fatal to the DPW’s position. Rather, the court followed the well-settled tenet that, when interpreting a statute, a court should not look only at a particular clause in which general words are used, but rather, should examine provisions in the context of the entire statute, and the objects and policy of the law, and construe the statute in a manner that will execute the legislature’s will. The Third Circuit then concluded that, upon consideration of the Act as a whole, including its text, structure, purpose and legislative history, the DPW’s practice of asserting liens against the portion of a Medicaid recipient’s recovery that relates to medical costs must be viewed as an exception to the anti-lien and anti recovery provisions of the Act.
In reaching this conclusion, the Third Circuit stressed that the anti-lien and anti-recovery provisions of the Act significantly predate the reimbursement and forced assignment provisions. The court further noted that the two sets of provisions were enacted to achieve different goals. Specifically, the anti-lien and anti-recovery provisions were created to ensure that Medicaid beneficiaries were not required to directly bear the costs of their medical care. The reimbursement and forced assignment provisions, on the other hand, were enacted to allow states to recoup their medical assistance payments in circumstances where a third party is responsible for a Medicaid recipient’s injuries. According to the court, the only way to effectuate both goals underlying these conflicting provisions is to view the reimbursement and forced assignment provisions of the Act as exceptions to the anti-lien and anti-recovery provisions.
Moreover, the Third Circuit determined that the legislative history of the Act supports the notion that Medicaid beneficiaries are not entitled to retain money paid to them by liable third parties to compensate the beneficiaries for their medical costs. The court reached this conclusion after observing that the anti-lien and anti-recovery provisions were inserted into the Act to protect Medicaid recipients and their spouses from the loss of their property, usually their home, during their lifetime. The court then declared that “Congress’s concern for protecting a Medicaid beneficiary’s personal assets – not her interest in recovering medical costs paid on her behalf – clearly animated the enactment of the anti-lien and anti-recovery provisions.”
The legislative history of the Act’s reimbursement and forced assignment provisions, on the other hand, demonstrates that Congress intended to ensure that states recovered medical assistance payments made to Medicaid recipients whenever third parties are found liable for the recipient’s medical expenses despite the apparent proscription against seeking recovery of such payments. According to the court, “{i} defies common sense to conclude that Congress intended to protect the rights of Medicaid beneficiaries to recover medical costs that they never paid in the first place.” Rather, the court maintained that the reimbursement and forced assignment provisions were meant to limit the financial burden of Medicaid on the states and to ensure that Medicaid beneficiaries did not receive a windfall by recovering medical costs they never paid. Thus, the court concluded that “the forced assignment and reimbursement provisions are best viewed as creating an implied exception to the anti-lien and anti-recovery provisions of the Social Security Act.” The court then held that liens on settlements or judgments that are limited to medical costs are not prohibited by the anti-lien and anti-recovery provisions of the Act.
Finally, the court determined that Pennsylvania’s current statutory scheme, which permits Medicaid recipients to appeal from the statutory default rule of allocation for tort recoveries, is a permissible default apportionment method under federal law.
by Mark Bauman | May 19, 2023 | Health Care Law, Legal News
Act 169 of 2006, which provides a framework for making healthcare decisions on behalf of incompetent adult patients through advance health directives, went into effect on January 29, 2007. The Act allows physicians to initiate, continue, withdraw or withhold medical care based upon instructions contained in a patient’s living will, out-of-hospital do-not-resuscitate order, or by following the directions from a health care agent or health care representative.
Although the living will and out-of-hospital do-not-resuscitate order provisions largely follow existing statutory law, the Act attempts to clearly define the applicable standards and procedures that should be implemented when healthcare decisions for an incompetent adult patient are made by agents appointed through a health care power of attorney or by a health care representative.
An advance healthcare directive is a living will, a health care power of attorney, or a document that combines the features of both a living will and a health care power of attorney. A health care agent is appointed by the patient through a health care power of attorney. A health care representative can be designated by the patient or is authorized to act by default under the law. If a health care representative must be designated through default, the Act prioritizes the list of individuals to be considered. However, a patient of sound mind may modify the default designations or disqualify certain individuals. Additionally, upon petition, a judge may disqualify eligible individuals from being appointed a patient’s health care representative.
For an advance healthcare directive to be valid, it must be made by an adult patient who is of sound mind. It must also be in the form of a written document signed by the patient and two witnesses over 18-years-old. If the patient is unable to sign, the advance directive can be signed by another individual at the patient’s direction; however, neither health care providers nor their agents, including office staff, may sign on behalf of a patient whom they are treating. An exception to the requirement that the advance healthcare directive be in writing applies to the designation of a health care representative. In addition to appointment through a written document, a patient may also appoint a health care representative by personally informing the healthcare provider of the designation. Although a written advance healthcare directive need not be notarized to be valid in Pennsylvania, other states may require notarization. Additionally, advance directives executed under the prior law remain valid and advance directives executed in other states are recognized in Pennsylvania as long as the directions from the health care agent or representative are consistent with Pennsylvania law.
A patient can also change or revoke an advance directive. Changes can only be made if the patient is of sound mind and the changes are executed as stated above. A patient can also revoke an advance directive, but the requirements are different depending on whether the advance directive is a living will or a health care power of attorney. A patient may revoke a living will at any time and in any manner and does not need to be of sound mind to do so. The revocation of a living will is effective immediately upon communication to the health care provider by the patient or by a witness to the revocation. However, for a patient to revoke a health care power of attorney, he or she must be of sound mind and the revocation must be in writing or through personal communication by the patient to the health care provider.
When presented with an advance health directive, the health care provider is required to place a copy of the advance health care directive in the patient’s medical record and to also document any amendments or revocations that take place. If the individual claiming authority to make health care decisions on behalf of the incompetent adult patient is a health care representative, the healthcare provider can require the healthcare representative to produce a written declaration establishing the individual’s authority.
The authority granted to an health care agent or representative under an advance directive depends on the type of directive at issue. A living will is only operative if the patient becomes incompetent and is permanently unconscious or is diagnosed with an end-stage medical condition. However, the authority of a health care agent can be more broad and is defined by the language of the health care power of attorney, which may include all care and not just end of life decisions. Some limited restrictions to the health care agents authority apply in situations involving pregnant women and disabled patients. A health care representative holds authority similar to that of a health care agent except that the direction to withhold or withdraw life-sustaining treatment can only be made if the patient is permanently unconscious or has an end-stage medical condition. Furthermore, a patient of sound mind can countermand or reverse any decision made by a health care agent or representative by informing the health care provider. And a patient, regardless of mental capacity, may countermand the decision to withhold or withdraw life-sustaining treatment by personally informing the health care provider.
Under the Act, a physician must determine whether a patient is incompetent. If the patient is found to be incompetent, or conversely regained competence, it must be documented in the patient’s medical records and, to the extent possible, the patient and patient’s health care agent or representative must be notified. Additionally, a physician must also determine whether a patient is permanently unconscious or have an end-stage medical condition. Again, such a finding must be documented in the patient’s medical records and, to the extent possible, the patient and patient’s health care agent or representative must be notified. Although the Act does not require that the above determination be confirmed through a second opinion, a patient’s advance directive may require such confirmation before becoming effective.
In the event a patient’s advance health care directive becomes effective, the Act defines the obligations a health care agent or representative. The agent or representative’s first duty is to collect information regarding diagnosis and treatment options. Health care decisions for the incompetent adult patient are then made following a prescribed criteria. First, the oral or verbal instructions made by the patient while competent are to be followed. If no such instructions were made or apply, the agent or representative should make any health care decisions based on the patient’s preferences and values, which include religious and moral beliefs. Lastly, the health care decisions made on behalf of the incompetent adult patient should take into account the best interests of the patient.
Although the Act provides that a health care provider must generally comply with the decisions of a health care agent or representative, it also addresses situations where the health care provider has religious or moral objections to the health care decision made by the health care agent or representative or has concerns regarding providing medically inappropriate care. The Act also provides guidance regarding various other issues that may arise when a health care agent or representative must make health care decision on behalf of an incompetent patient such as privacy issues, rules regarding documentation of discussions, disclosures and consents between the health care agent or representative and the health care provider, and special rules regarding artificial nutrition and hydration.
