Uninsured Practice of Medicine as Actionable Tort
Jarrell v. Kaul, — A.3d — 2015 WL 5683722 (N.J. 2015)
A week ago, the Supreme Court of New Jersey has delivered an important decision on whether uninsured practice of medicine is actionable in torts. Jarrell v. Kaul, — A.3d —- 2015 WL 5683722 (N.J. 2015). This decision involved an uninsured anesthesiologist who allegedly provided negligent pain management treatment to a patient. Under New Jersey statute, N.J.S.A. 45:9–19.17; N.J.A.C. 13:35–6.18(b), a physician’s license to practice medicine is only valid when she holds medical-malpractice liability insurance in the requisite amounts.
The Court held that this statute does not give patients a private cause of action against uninsured or underinsured physicians. Based on the traditional common-law analysis (see In re Resolution of State Commission of Investigation, 527 A.2d 851 (N.J. 1987), and a more familiar decision, Uhr v. E. Greenbush Cent. Sch. Dist., 720 N.E.2d 886 (N.Y. 1999)), the Court determined that the Legislature did not intend to make uninsured practice of medicine actionable in torts because it was sufficiently discouraged by disciplinary penalties, administrative enforcement, and the physician’s prospect of loosing her license.
The Court also ruled that the aggrieved patient cannot sue the uninsured physician for violation of her right to informed consent. The patient’s entitlement to informed consent – it explained – only entitles her to receive information about the nature and the risks of the recommended medical treatment and its alternatives, which includes, in appropriate cases, information about the physician’s credentials and experience with the treatment. This entitlement does not extend to information about the physician’s insurance against medical malpractice claims.
The Court, however, decided that the patient can still successfully sue the hospital or the practice that employed the uninsured physician. Importantly, the Court ruled that such an action would succeed even when the physician was an independent contractor. The patient’s cause of action would then be the physician’s negligent hiring or credentialing by the hospital (or practice). In the Court’s words,
“The provision of medical care is highly regulated in this State. Hospitals and the wide variety of alternative providers of health care services, including ambulatory care centers and surgical centers, are highly regulated. No health care facility may provide medical care unless it obtains a license, and that license is subject to renewal on an annual basis. Each set of regulations governing each type of health care facility recognizes that the health care administered in a facility is provided by employees, such as nurses and technicians, and independent contractors, such as physicians. Health care facilities are given broad responsibility to select the professionals who will provide medical care; however, regulations address the manner in which the medical staff shall be organized, the staff policies and procedures that should be addressed, and medical staff qualifications. The governing authority of each facility is required to establish criteria for delineating the privileges that will be granted, granting privileges to provide medical care in its facility in accordance with the adopted standards and procedures, and reviewing the granted privileges on a periodic basis. Physicians must submit an application to obtain privileges and must demonstrate that they are currently licensed to practice medicine in this State. Obtaining and maintaining medical malpractice liability insurance in the amounts prescribed by law is a requirement to obtain and maintain a license to practice medicine in New Jersey.
[The] basic element of competency for any physician seeking surgical privileges at [a healthcare] facility is possession of a license to practice medicine in the State of New Jersey. An essential condition for such a license is possession of a policy of medical malpractice liability insurance or an acceptable letter of credit as required by statute and the regulations adopted by the BME. Moreover, the statutory financial responsibility requirements impose a continuing obligation on the physician to maintain the appropriate type and amount of insurance.” [citations omitted and emphasis added]
This decision raises an interesting question: Can an aggrieved patient sue the physician’s hospital or practice in a state in which doctors must have liability insurance as a matter of customary practice rather than statutory mandate?
My tentative answer to this question is as follows:
- The patient would be able to successfully sue the hospital for negligent misrepresentation if the hospital held itself out as a fully insured (or self-insured) facility.
- The patient would also be able to successfully sue the hospital under the “apparent authority” doctrine if the hospital advertised itself as a full-service facility that employs its physicians.
- The patient, however, would not be able to sue the hospital for negligent credentialing (or negligent hiring) because, unlike in New Jersey, an uninsured physician is still considered licensed and professionally competent.
The “Common Knowledge” Exception to the Expert Requirement in Medical Malpractice Actions under FTCA Categorized as “Substantive”
Bush v. United States — F.3d — 2015 WL 5472491 (5th Cir. 2015)
All expert requirements for medical malpractice actions (including merit certificates and affidavits) are categorized as “substantive” rather than “procedural” under both Erie (in diversity suits) and the Federal Tort Claims Act (FTCA). See here and here. The Fifth Circuit recently ruled in connection with a medical malpractice suit filed under FTCA that the “common knowledge” exception to the expert testimony requirement is “substantive” as well. Bush v. United States — F.3d — 2015 WL 5472491 (5th Cir. 2015) (hereinafter: Bush). State law (Virginia law, in Bush) consequently trumps the federal law of evidence and procedure.
In Bush, whether a VA hospital nurse properly instructed the patient and his spouse on how to troubleshoot HeartMate II – a left ventricular assist device, implanted in the patient’s chest to prevent heart failure – was held to fall within “common knowledge” that requires no expert testimony.
This holding was made in connection with a wrongful death suit that complained about the device’s breakdown that led to the patient’s death. The Fifth Circuit grounded it on Beverly Enterprises–Virginia, Inc. v. Nichols, 441 S.E.2d 1 (Va. 1994) – a Virginia Supreme Court decision that extended the “common knowledge” exception to a case in which a healthcare administrator failed to share information necessary for appropriate care with primary caretakers. In Nichols, an elderly nursing-home resident suffering from Alzheimer’s choked to death after a nursing home employee, uninformed about her condition, delivered her a food tray without staying to help her eat. The Virginia Supreme Court ruled in connection with the ensuing wrongful-death action that the plaintiffs could establish their allegations without an expert witness because “the alleged act of negligence clearly lies within the range of the jury’s common knowledge and experience.”
The Fifth Circuit reasoned that Bush and Nichols are indistinguishable because the nurse in Bush “knew that a transient beep from the [device] could be a sign of a serious malfunction [but] failed to inform the Bushes about the risk indicated by such a sound.” “In these circumstances” – the court explained – “a layman could determine that [the nurse] breached the relevant standard of care.” The court further explained that Bush should be separated from suits for informed-consent violations that normally require an expert because here “the [patient’s] risk was inherent to an already-existing condition; [the patient] could [not] avoid the risk by refusing a future medical procedure.” (emphasis in original). As far as positive law is concerned, this decision seems to be right.
Importantly, the “common knowledge” exception must not be confused with claims that sound in ordinary or “common,” as opposed to medical, negligence. The “common knowledge” exception has nothing to do with suits sounding in ordinary negligence. Rather, it allows plaintiffs to prove medical malpractice without furnishing expert testimony. This special permission rests on procedural and evidentiary policies that vary from one jurisdiction to another. A requirement that plaintiffs accompany medical malpractice suits with a merit certificate (or affidavit) from a qualifying expert witness has two goals. The first goal is to promote accuracy in courts’ decisions. The second and equally important goal is to have the plaintiffs’ money speak on their behalf. By making a substantial upfront investment in her suit, the plaintiff reliably signals that her allegations are credible rather than frivolous: see here.
For these reasons, I am now revisiting the “substantive” categorization of the expert certificate requirements and the “common knowledge” exception in the context of medical malpractice suits under FTCA. My forthcoming work, Fixing the Federal Law of Medical Malpractice, will argue that these important rules should be informed by federal, rather than state, policies. Stay tuned!
Medical Publications as Evidence
Kace v. Liang, — N.E.3d — 2015 WL 5253356 (Mass. 2015)
Whether a medical publication – a book or an article – can be used in court as evidence for its truth is determined by the “learned treatise” exception to the hearsay rule. This exception provides that a court can admit into evidence an excerpt from a treatise or periodical when it “is called to the attention of an expert witness on cross-examination or relied on by the expert on direct examination” and when “the publication is established as a reliable authority by the expert’s admission or testimony, by another expert’s testimony, or by judicial notice.” Federal Rule of Evidence 803(18) and its state equivalents.
The Supreme Judicial Court of Massachusetts has recently narrowed this exception. Specifically, it held that organizations such as hospitals and even universities cannot satisfy the “reliable authority” requirement by their institutional credentials. This requirement – the Court explained – can only be satisfied by the person who authors the publication. The Court also expressed skepticism about credibility of academic and other publications driven by the pressure to publish. Kace v. Liang, — N.E.3d — 2015 WL 5253356 (Mass. 2015).
Based on this understanding, the Court ruled that the Johns Hopkins Medicine and Mayo Clinic web pages do not meet the “reliable authority” requirement because they “did not reference a particular author or authors.” Johns Hopkins’ and Mayo Clinic’s stellar reputation in medical research, teaching, and patient care was thus held to be of no consequence.
This decision is problematic. There is no good reason to exclude medical information authored by a hospital or medical school when a medical expert testifies about that information in court. The Massachusetts Supreme Court’s decision also strengthens the pro-incumbent bias of academic and professional publishers, who tend to prefer reputable authors over young and not yet established academics and professionals. Those publishers now have an additional reason for acting upon that preference: it will make their publications admissible as evidence and increase sales.
“Medical Malpractice or Ordinary Negligence?” in the Context of Psychiatric Treatment
Shands Teaching Hosp. & Clinics v. Estate of Lawson, — So.3d — 2015 WL 5057325 (Fla. 5th DCA 2015)
As I explained in these posts and in a foundational article on medical malpractice, categorizing a plaintiff’s action as “medical malpractice” rather than “ordinary negligence” determines whether it must satisfy rigid limitations and repose provisions, comply with special and costly requirements with regard to expert testimony, face the difficult burden of proving the defendant’s deviation from the medical profession’s customary practices and protocols, and suffice itself with the compensation amounts allowed by the statutory caps on damages.
A recent Florida court decision, Shands Teaching Hosp. & Clinics v. Estate of Lawson, — So.3d — 2015 WL 5057325 (Fla. 5th DCA 2015), illustrates the centrality of this issue for suits complaining about a psychiatric hospital’s neglect.
This decision involved a patient locked in a psychiatric unit for safety reasons. The patient took an employee’s unattended keys and badge and run away from the hospital onto a nearby interstate highway, where she was struck and killed by a truck. The patient’s estate sued the hospital for her wrongful death. The suit alleged “ordinary negligence” and disavowed “medical malpractice.” The hospital moved to dismiss the suit for failure to comply with special pre-suit requirements for medical malpractice actions, but the trial court agreed with the estate.
The court of appeals reversed that decision. It explained that here, “the ordinary negligence claim cannot be taken at face value, because the breach allegedly arose from Shands’ failure in providing the signature psychiatric service offered by its specialty “locked unit”—confinement—which was the service that Ms. Lawson’s psychiatric condition especially required.” Hence, “the Estate’s claim sounds in medical negligence [because] the proof required in this case will inevitably involve the medical negligence standard of care, or ‘that level of care, skill, and treatment which, in light of all relevant surrounding circumstances, is recognized as acceptable and appropriate by reasonably prudent similar health care providers.’” (citing the applicable formulation of “medical malpractice” and relying on Robison v. Faine, 525 So.2d 903, 906 (Fla. 3d DCA 1987) (medical care standards apply where an unwatched, suicidal psychiatric patient escaped a bed restraint, exited onto the hospital’s roof, and fell); Young v. Bd. of Hosp. Dirs. of Lee Cnty., 426 So.2d 1080, 1081 (Fla. 2d DCA 1983) (medical care standards apply where a psychiatric patient escaped, ran into the streets, and was struck and injured by a car).
The court separated the estate’s suit from “negligence suits alleged in medical contexts [that] don’t implicate medical standards of care” (illustrated by Quintanilla v. Coral Gables Hosp., Inc., 941 So.2d 468 (Fla. 3d DCA 2006) (spilling hot tea on a patient); Tenet St. Mary’s Inc. v. Serratore, 869 So.2d 729 (Fla. 4th DCA 2004) (inadvertently kicking a patient); Lake Shore Hosp., Inc. v. Clarke, 768 So.2d 1251 (Fla. 1st DCA 2000) (slip and fall in a hospital); Broadway v. Bay Hospital, Inc., 638 So.2d 176 (Fla. 1st DCA 1994) (bed collapsed under a patient); Robinson v. W. Fla. Reg’l Med. Ctr., 675 So.2d 226, 227-28 (Fla. 1st DCA 1996) (categorizing a complaint that a hospital “negligently failed to maintain the premises … in a safe condition after an unsupervised patient with a violent history attacked the plaintiff … to be in effect a premises liability case arising out of a criminal attack by a third party” and emphasizing that the harm was “independent of any medical diagnosis, treatment, or care.”); Joseph v. University Behavioral LLC, 71 So.3d 913 (Fla. 5th DCA 2011) (categorizing a suit complaining about one psychiatric patient’s violent assault on another patient as sounding in ordinary negligence because “there [was no] evidence that [the victim’s] injuries resulted from any decision made in the course of [his] psychiatric treatment.”).
This decision was absolutely correct. The estate’s self-serving portrayal of its suit as “ordinary negligence” amounted to what was described by another Florida court as a “creative dance around the obvious.” Dr. Navarro’s Vein Ctr. of Palm Beach, Inc. v. Miller, 22 So.3d 776, 778 (Fla. 4th DCA 2009). Courts should not allow such “dances” to undercut the state’s regulation of medical malpractice actions.
Merit Certificate Mechanism as Substantive Law
Schmigel v. Uchal, — F.3d — 2015 WL 5131465 (3d. Cir. 2015)
Pennsylvania and many other states require plaintiffs to accompany their suits for medical malpractice with certificates (or affidavits) of merit (COM) from qualifying experts. This requirement has a twin goal. First, it aims to promote accuracy in courts’ decisions. Second and equally important, it makes plaintiffs’ money speak on their behalf. By making a substantial upfront investment in her suit, the plaintiff reliably signals that her allegations are credible rather than frivolous: see here. For these reasons, federal courts have categorized the requirement as “substantive” or “outcome-determinative” for purposes of diversity suits governed by the Erie doctrine. This categorization allows the COM requirement to override federal law. See, e.g., Liggon–Redding v. Estate of Sugarman, 659 F.3d 258 (3d Cir. 2011).
Failure to satisfy this requirement leads to the suit’s direct dismissal. To avoid this harsh result, many states, including Pennsylvania, require defendants to give the defaulting plaintiff a pre-dismissal notice to allow her to submit the requisite certificate to court within a specified period of time. Recently, the Third Circuit has held that this notice and extension requirement is “outcome-determinative” as well, which makes it applicable in federal courts. Schmigel v. Uchal, — F.3d —- 2015 WL 5131465 (3d. Cir. 2015).
The court clarified in this connection that the COM requirement is unrelated to the sufficiency of pleadings standards, laid down for federal courts in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). This requirement – it explained – “does not have any effect on what is included in the pleadings of a case or the specificity thereof.” (quoting Liggon–Redding, 659 F.3d at 263). Rather, it is about “facts that can form the basis for a motion for summary judgment.”.
Based on this analysis, the Court concluded that “Because there is no federal interest weighing against applying the same notice requirement as the Pennsylvania Supreme Court, our Erie decision is a clear one: The condition of thirty days’ notice prior to seeking dismissal of an action for failure to comply with the COM regime is substantive and must be applied in federal court.”.
Judge Rendell wrote a powerful dissent. According to her, the Court’s ruling contradicted the Supreme Court’s plurality opinion in Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 410 (2010), that “a federal procedural rule ‘is valid in all jurisdictions, with respect to all claims, regardless of its incidental effect upon state-created rights.’” Judge Rendell explained that Federal Rules of Civil Procedure – Rule 12, in particular – “do not require defendants to give written notice of their intention to file a motion to dismiss [nor] do they preclude courts from entering judgments without such notice.” The Court’s ruling – she added – “will create varied dismissal procedures, which will negate ‘[o]ne of the shaping purposes of the Federal Rules,’ which is ‘to bring about uniformity in the federal courts.’” (citing Hanna v. Plumer, 380 U.S. 460, 472 (1965)). Judge Rendell concluded that while the COM requirement is “substantive” or “outcome-determinative,” the notice requirement is procedural and should therefore be governed by the federal rules.
This dissent strikes me as absolutely right. One should hope that other federal courts decline to follow Schmigel.