In 1980, the Indiana Supreme Court ruled that Indiana’s statutory cap on medical malpractice awards is constitutional.  The Indiana Court of Appeals has now ruled in October of this year that
a plaintiff is entitled to an evidentiary hearing about whether Indiana’s statutory cap on medical malpractice awards is unconstitutional.  If the plaintiff is successful in his challenge, health care providers in Indiana would face increased, if not unlimited, exposure in damages. 

A husband brought a lawsuit against a hospital alleging medical malpractice that resulted in the death of the man’s wife.  According to the Indiana Court of Appeal’s opinion, doctors failed to
diagnose a small bowel obstruction resulting in the wife contracting sepsis, which eventually led to her death.  The husband received an $8.5 million jury verdict.  The trial court, at the hospital’s request, reduced the jury verdict award to the $1.25 million statutory cap.  The husband’s attorney objected to the reduction because he claimed the statutory cap violated the Indiana Constitution. The husband’s attorney also requested an evidentiary hearing to pursue the constitutional challenge.

The trial court denied the husband’s request for an evidentiary hearing.  The Indiana Court of Appeals reversed the trial court because the Indiana Supreme Court, in other unrelated cases, has
declared that whether a statute is constitutional can be revisited from time to time.  The party challenging the constitutionality of a statute has the burden to prove that changes in circumstances require the reversal of existing case law.  The Court of Appeals determined that without a hearing the husband would have no means to show a change in circumstances that required a reversal of the existing case law.

It must be emphasized that the Indiana Court of Appeals did not decide on whether the medical malpractice statutory cap was unconstitutional.  It merely determined that the husband should
be able to present his case to the trial court.  As a result of this ruling, the husband’s case now goes back to the trial court judge for the evidentiary hearing.  It seems very likely that this case will work its way back through the appellate courts once the trial court issues a ruling.  Only next time, the Court of Appeals, and possibly the Indiana Supreme Court, will likely address the actual constitutional issue.

For now, the statutory cap for medical malpractice awards in Indiana remains valid.  However, the future of the statutory cap is uncertain at this time due to this recent decision.  Unfortunately, there will not likely be an answer until the constitutional challenge works its way through the trial court, Court of Appeals and the Indiana Supreme Court.  The attorneys at Bamberger will be keeping a
close eye out for developments on this issue.  Please contact us if you have any questions.

Author: Chad M. Smith (bio)
Phone: 812.452.3597
email: csmith@bamberger.com

For most individuals, it is not easy to admit when they have done something wrong and someone else suffers.  But, when someone suffers and an individual did not do anything wrong, then it is easy to tell the suffering person that we are sorry they are going through a tough time.  In litigation, including medical malpractice cases, the defendants (who are accused of doing wrong) and their attorneys are leery to express empathy for the plaintiffs or their families out of fear that the expression will be taken as an admission of wrongdoing.  So, is there really a difference between an apology for an adverse event and an admission of fault? 

In the health care arena, apologies and expressions of remorse for medical errors or bad outcomes seem to be a trendy practice.  Generally speaking, the theory is to disclose an adverse medical event with an expression of empathy, followed by an investigation into whether the event was caused by a breach of the standard of care and then a sharing of the investigation results with the patient or patient’s family.  If there was a breach of the standard of care then compensation will be offered.  If there was no breach then no compensation is offered and any legal action is defended.  The hope is that the patient or patient’s family will appreciate the health care provider’s empathy and truthfulness in what is an emotional period of time for the patient or patient’s family, which will lead to a better understanding of what occurred.

This trend of encouraging apologies is reflected in state statutes limiting the admissibility of such statements that have been passed in some form in most states.  Indiana Code 34-43.5-1-1 et seq., passed in 2006, renders “communications of sympathy” inadmissible in court.  However, statements of fault may be admitted into evidence.  This leads us back to the question of whether there is a difference between an apology and an admission.  Clearly there is a distinction. 

But it is not always easy to apologize to a patient without it seeming like an admission of fault.  Physicians often complain of telling the patient “A, B, and C” and the patient hearing “X, Y, and Z.”  In emotionally charged circumstances or in cases involving litigious individuals, expressions of sympathy may be twisted into statements of fault.  For example, in the case of a patient’s death, a health care provider does not admit fault if he or she says to the patient’s family, “I am sorry for your loss.”  However, the patient’s family after receiving devastating news may hear or interpret, “I am sorry I caused your loss.” 

In certain, if not all, cases, expressions of empathy certainly have value for all involved.  There are procedures that can be implemented to minimize and/or alleviate the fears associated with offering empathy to the patient or patient’s family.  But health care providers must be cautious and must be educated on what to say, how to say it and under what circumstances to voice such expressions.  In other words, this is not something to start doing tomorrow after reading this article.  Health care providers will need to give it some thought and seek counseling on how to implement this theory.

Author: Chad M. Smith (bio)
Phone: 812.452.3597
email: csmith@bamberger.com

My sister is a pharmacist so the recent decision by the Indiana Court of Appeals dealing with the liability of a pharmacist and her employer, CVS, caught my attention.  Plus, pharmacists are not the subject of many court decisions so I was curious about what the Court had to say.

An Indiana pharmacist working for CVS filled a prescription for OsmoPrep for a customer’s upcoming colonoscopy.  CVS also filled the customer’s other prescriptions, including Lisinopril, an ACE inhibitor that treats hypertension.  When filling the OsmoPrep prescription, the pharmacist paid no attention to a warning which flashed on her computer screen that OsmoPrep posed a risk of renal failure due to the customer’s age.  A document had also been given to CVS pharmacists warning that the interaction of OsmoPrep and Lisinopril could cause kidney damage.

After taking just two pills, the customer went to the hospital after feeling tingling sensations in her arms.  She was diagnosed with kidney failure and is now required to undergo dialysis for the rest of her life or receive a kidney transplant.

The customer sued her doctor, her doctor’s nurse, CVS and the pharmacist for negligence.  A final decision has not been made in the case, but the Indiana Court of Appeals found that CVS and the pharmacist might be liable if the jury finds that they failed to exercise appropriate professional judgment.  The Court of Appeals emphasized two Indiana laws, the first of which states that pharmacists must fill all valid prescriptions unless an appropriate exercise of professional judgment indicates that honoring the prescription would be against the patient’s best interest or be contrary to the patient’s health or safety.  The Court also referenced a Pharmacy Board Rule which requires a pharmacist to initiate an offer to counsel the patient on matters concerning prescription drugs, including side effects and/or interactions with other drugs.  The Court of Appeals stated that a judge or jury must determine whether these laws were violated.

The case will now undergo further proceedings to determine whether the pharmacist and CVS violated any Indiana laws or duties owed to this particular customer.  This case should serve as a reminder to pharmacists that they cannot simply follow the directive of a doctor, but must exercise their own professional judgment on whether a prescription should be filled.

This past summer, the Federal Trade Commission (FTC) extended the enforcement deadline for the Red Flags Rule through December 31, 2010.  In addition, Congress is considering legislation that would affect the scope of entities covered by the rule.  Specifically, Congress is considering legislation that would exempt physicians, dentists and veterinarians from the FTC’s Red Flags Rule.  As the newest deadline draws near, you will need to follow up to see if the deadline will be imposed or extended once again or if Congress will act to exempt health care providers, dentists and veterinarians.

You may recall that in 2007 the FTC issued a set of regulations, known as the Red Flags Rule, requiring that certain entities develop and implement written identity theft prevention and detection programs to protect consumers from identity theft.  The Red Flags Rule was originally scheduled for a November 1, 2008 compliance date, but that compliance date has been delayed several times due in large part to the advocacy of the American Medical Association.  The AMA objects to the applicability of the Red Flags Rule to health care providers and other professionals.

As it stands now, healthcare providers need to determine if they are required to comply with the Red Flags Rule by determining if they are creditors with covered accounts.  In the healthcare field, a creditor is an individual or entity that allows a patient to make payments after services are rendered or to set up a payment plan for those services.  A covered account is an account that allows ongoing activity or payments that could reasonably be susceptible to identity theft.

If a healthcare provider is considered a creditor with covered accounts, the healthcare provider is required to create an identity theft prevention and detection program.  The program must indicate red flags inherent in the healthcare industry and how those areas with red flags will be detected and resolved.  Common red flags are documents that appear forged, conflicting personal contact information, and any unusual activity like a patient who is billed for a service she didn’t receive.  The program must also show how they plan to keep the identity theft program up-to-date to adapt to changes in the medical field.

The Red Flags Rule does not specify any sort of framework or procedure for designing the identity theft program.  It is entirely in the discretion of the healthcare provider, but the program should indicate how staff will be trained to apply the program on a daily basis.  Failure to comply with the Red Flags Rule, once it goes into effect, can lead to financial penalties.  Private citizens may also file complaints with the FTC and the FTC can file civil lawsuits for an injunction requiring healthcare providers to comply with the Red Flag Rules.

Healthcare providers need to begin to address this situation by creating an identity theft program if the December 31, 2010 deadline is not extended and Congress does not exempt health care providers.  If you have any further questions regarding this issue, please contact one of your Bamberger attorneys.

Author: Chad M. Smith (bio)
Phone: 812.452.3597
email: csmith@bamberger.com

A recent article in the Indianapolis Business Journal noted a shocking decline in the number of notaries in Indiana in the last few years.  In years past, a notary public stamp on a document seemed to be ever present and often was the distinguishing characteristic of a document with high importance.  However, in 2007, the Indiana Secretary of State’s office noted almost 23,000 expirations, but only approximately 17,000 renewals or applications for new notaries.  This marked a 22% decline for 2007.  In 2009 the decline accelerated to 30%.  This year the decline to-date is 41%.  The chief legal counsel for the Indiana Secretary of State indicates that he believes the decline reflects that the type of authentication notaries do is falling out of fashion.  Many companies now accept photo I.D. or confirm over the telephone or Internet.  He indicated that notary publics were more popular in the days when companies and people relied heavily on postal mail.  However with the increase in multiple forms of personal communication being available, the mail is not the exclusive source to authenticate the identity of someone’s signature on a document.  If you have questions about notaries in Indiana, contact a Bamberger attorney.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

A relative new trend in medical malpractice litigation involving the use of depositions of physicians could have ramifications for the testifying physician, who is not yet a party to a lawsuit, once the deposition has been completed. 

Recently, the patient’s attorneys have started to ask treating physicians to give a deposition concerning the care of the patient in hopes that the testifying physician will be critical of the health care provider that has been named in the complaint, thus giving the patient an advantage in the claim.  The logic behind this tactic is that it can be part of human nature for a person to profess his or her innocence in a situation by looking negatively at another individual’s involvement in the same situation. 

In some situations, if not most, the patient’s attorney is going as far as telling the testifying physician that the patient is not looking to sue the testifying physician.  This can provide a false sense of security for the testifying physician that he or she will not be dragged into a medical malpractice claim leaving the testifying physician unprepared for the actual deposition.  Healthcare providers need to be cautious because there is nothing to stop the patient’s attorney from adding the testifying physician as a party to the medical malpractice claim after the deposition has been taken.  If that were to happen, the patient’s attorney has the testifying physician’s deposition to use against the targeted health care provider and the patient’s attorney can look to build a case against the testifying physician. 

So what can health care providers do to protect themselves?  There are two quick and simple options you have to make certain you are protected and well advised on how to proceed.  The first is to call your private attorney to advise him or her of the situation.  Your private attorney can make a call to the patient’s attorney to get more information on the matter and then advise you what you should be doing.  The second option is for you or your private attorney to call your medical malpractice insurer to advise it of the situation.  The medical malpractice insurer may opt to provide you with an attorney at the insurer’s expense, especially if the patient’s attorney wants to move forward with the deposition. 

In this type of situation, it is not a bad idea to call both your private attorney and your medical malpractice insurer to ensure you receive as much guidance as possible.  If you have a risk manager associated with your practice group or hospital, you most certainly should contact the risk manager as soon as you are approached by a patient’s attorney.  Your risk manager will be able to help you navigate this situation as well.  If you are ever placed in this situation, the most important thing to remember is that accommodating the request of a patient’s attorney does not mean that you will not be sued even if the patient’s attorney states that you are not being targeted for a lawsuit.

Author: Chad M. Smith (bio)
Phone: 812.452.3597
email: csmith@bamberger.com

The Indiana Court of Appeals decision in Howard Regional Health System d/b/a Howard Community Hospital, Charles G. Marler, M.D., and Community Family Health Center v. Jacob Z. Gordon b/n/f Lisa Gordon gives even more incentive for health care providers to protect patients’ medical records.  Failure to maintain a patient’s medical record for at least seven years or during a medical malpractice lawsuit could be costly to health care providers in more ways than one.

In Howard Regional, a young boy suffers from multiple disorders that could have been caused by substandard medical care at the time of his birth in 1999.  The boy’s mother filed a medical malpractice action and asked the hospital to produce evidence relating to the boy’s care.  Eighteen (18) months later the hospital responded with an affidavit stating some of the medical records (including narrative notes, labor flow records, peri-operative nurses’ notes and fetal heart monitor strips) could not be located.  A neonatal doctor later determined that he couldn’t provide an opinion about potential medical malpractice on behalf of the boy and his mother because of this missing evidence.

Indiana Code § 16-39-7-1, requires health care providers to maintain medical records for a minimum of seven years.  A provider violating this statute commits an offense for which a board may impose disciplinary sanctions against the provider under the law that governs the provider’s licensure, registration or certification.  In Howard Regional, the Indiana Court of Appeals found a violation of this statute also to be negligence per se (negligence established as a matter of law) and therefore a private civil cause of action for the patient.  The Court rejected an argument by the hospital that the disciplinary sanctions contained in the statute prevented a private right of action by the patient because the Court of Appeals believed those sanctions would be “wholly ineffectual” to remedy the harm the patient suffered by not being able to bring a medical malpractice lawsuit  since the records had been lost. 

The Howard Regional opinion also created a third-party spoliation claim for the patient against the hospital.  “Third-party spoliation” refers to the negligent or intentional destruction or discarding of evidence that is relevant to a tort action.  Typically the evidence is destroyed or discarded by a person or entity not involved in the lawsuit.  In Howard Regional, the Court of Appeals determined it was permissible for the patient to maintain an action against the hospital for third party spoliation of evidence even though the hospital was a party to the lawsuit because the hospital lost evidence the patient needed in order to pursue an action against her obstetrician.  The Court again relied on the fact that the hospital had a duty to retain the evidence that was lost in reaching its decision on this issue.

What may be even more concerning than the private cause of action that this opinion establishes is that the patient’s claim for spoliation of evidence was unrelated to “the promotion of a patient’s health or the provider’s exercise of professional expertise, skill or judgment” and therefore outside the Indiana Medical Malpractice Act.  As a result, the Malpractice Act’s caps on damages would not apply leaving a health care provider vulnerable to damages that have no limitations.  The Court even noted that damages in third party spoliation claims are difficult and highly speculative because the jury is asked to determine what the damages would have been had the evidence been produced.

Due to the uncertainty of damages a health care provider may face if liable to a patient on a third party spoliation claim, we would encourage each of you to review your policies and practices to ensure you are in compliance in maintaining patients’ medical records for at least seven years and are able to locate all parts of the patients’ files.  Please contact the Employment Law attorneys at Bamberger if you’d like to discuss your policies and procedures in more detail.

Author: Chad M. Smith (bio)
Phone: 812.452.3597
email: csmith@bamberger.com

As the Bamberger Blog subscriber list continues to grow, we have decided to upgrade our Blog’s email and RSS service from Google Feedburner to the more enhanced Google FeedBlitz.

The new service will allow us more options in terms of creative content, better reach and SEO components and more ways that our subscribers can choose from with regards to delivery options.  We hope you will enjoy the expanded capabilities.

For those of you who subscribe to our blog by RSS feed, you will want to update your feed by going to our subscription page to update with the latest FeedBlitz URL addresses.

For our existing email subscribers, the only change you might notice is the address which sends you the news alerts, if you are receiving them by email.  Otherwise you shouldn’t see any changes at all.  Same great news articles, same great legal service.

Author: Kim Jewell (bio)
Phone: 812.452.3588
email: kjewell@bamberger.com

The U.S. Department of Health and Human Services, Health Resources and Services Administration, Bureau of Health Professions, Division of Practitioner Data Banks manages the National Practitioner Data Bank (NPDB). That agency issued its NPDB Guidebook to assist the health profession determine when a report to the NPDB is required.

One issue that has been problematic is what to do about a physician who gets an automatic suspension of hospital privileges because of a failure to timely complete a medical record and that suspension lasts longer than 30 days. Historically, such a suspension was viewed as an administrative matter that bore no relationship to a physician’s professional competence nor had any impact on patient health or welfare.  As such, no report was made to the NPDB of the suspension even if it lasted more than 30 days.  That may now have changed.

On July 30, 2009, the Director of the Division of Practitioner Data Banks, Mr. Daryl Grey, issued a letter which represents the NPDB official position on the obligation to report a suspension for failure to complete medical records that lasts more than 30 days.  In the letter Mr. Grey stated that it was the NPDB’s official position that “a failure to complete medical records is related to a physician’s professional competency or conduct and almost always has the potential to adversely affect a patient’s health or welfare.”  He also indicated that the much anticipated update to the NPDB Guidebook, expected to be released by years end, will provide further clarification on the issue of such reporting.

The “further clarification” may soften the “official” stance some.  An American Health Lawyers Association practice group alert of August 6, 2009, noted that discussions with senior NPDB advisors recognized that while delay in completing medical records is not uncommon and not all suspensions are reportable, those physicians who are chronically late or who have lengthy time lapses in preparing the needed records may well be deemed to be acting in such a way that actual or potential adverse effects on patient health can occur.  In such a case a report to the NPDB would be required.

Simply put, failure to complete the medical record in a timely manner resulting in a suspension of privileges may soon be viewed as a reportable event to the NPDB and not just an administrative matter not requiring a report.  It is suggested that prompt completion of the record must become the habit of every physician to avoid a mandatory report to the NPDB by the hospital.

Author: R. Thomas Bodkin (bio)

Phone: 812.452.3562

Email: tbodkin@bamberger.com

On February 8, 2006, federal Medicaid eligibility rules changed, including those related to the imposition and calculation of transfer penalties. Medicaid (not to be confused with Medicare) is a cooperative program between the federal and state government that offers health care services to low-income children and families, senior citizens, and those with disabilities.  It is also the program that pays for nursing home care for those who cannot pay for such care from their own assets and income.

There are both state and federal rules that apply when determining whether someone is eligible to receive Medicaid benefits.  For the past three years, there have been some very significant differences between the federal Medicaid eligibility rules and Indiana’s Medicaid eligibility rules.  The most drastic difference between the rules relates to so-called “transfer penalties”.  Transfer penalties apply when a person who requires nursing home care makes a gift of assets in order to protect the assets from being consumed by nursing home expense.

There were two significant changes to these rules – (1) the period of time that the Medicaid program can look-back to see whether a gift was made (the “look-back period”) was extended from three years to five years, and (2) if a gift was made during the look-back period, then the transfer penalty period would not begin to run until the person who made the gift was both in the nursing home and otherwise eligible for Medicaid (i.e., out of money).

Indiana has been in a state of limbo since these new federal rules were enacted because Indiana’s Medicaid eligibility rules are significantly different than these new rules.  In particular, the rules in Indiana state that the look-back period is only three years (as compared to five years), and that if a gift were made during the look-back period, then the transfer penalty period would begin to run the month after the transfer was made (as compared to when the person is in the nursing home and out of money).  The result of this is that Indiana’s rules have allowed people to give away money in an orderly fashion without causing much, if any, of a transfer penalty or Medicaid eligibility problem.

It appears that state of limbo that we have been in for the past three years is about to conclude.  The Indiana General Assembly in its most recent session passed a new law that states that the federal rules will not apply in Indiana until at least October 1, 2009.  This means we now know that the old, more favorable Medicaid eligibility rules and transfer penalty provisions will apply for at least another two months in Indiana.  So, if you know someone who may require nursing home care in the near future, that person has another couple of months to take advantage of the more favorable Medicaid eligibility rules and transfer penalty provisions.  Planning opportunities will still exist after October 1, but they will not be as great as they are right now.

— Andy Nestrick

Read Andy’s Bio

anestrick@bamberger.com

812.452.3510