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SEPTEMBER 2017

 

A Major Win For The Medical Negligence Defense Bar In Washington
By Our Own Ed Bruya

 

On July 6, 2017, the Washington Supreme Court unanimously affirmed the trial court dismissal of Washington State medical negligence claims against Idaho family physician Dr. Timothy Burns related to treatment of his Idaho patient in Donald R. Swank v. Valley Christian School, et al, No. 93282-4.  Bennett Bigelow & Leedom, P.S. trial attorneys Edward J. Bruya and Eric R. Byrd obtained the trial court dismissal for Dr. Burns, and were joined on appeal by Gregory M. Miller of Carney Badley Spellman, P.S. 

 

The claims against Dr. Burns were brought by the parents of his long-time Idaho patient Andrew Swank, who tragically died following head injuries in a high school football game played in Washington State in September, 2009.  The suit was filed in Washington and named the private high school, its coach, and Dr. Burns.  The suit asked the Washington courts to assert jurisdiction over Dr. Burns for medical care he rendered entirely in Idaho to his long-time Idaho patient who sought him out for the care.  It alleged all defendants failed to comply with a newly-passed Washington statute, the Lystedt Law, which was designed to address and help prevent concussion injuries in youth athletes.  The law restricted the youth athlete’s return to play until an evaluation and written clearance are obtained from a licensed health care provider.  

 

In its July 6 decision, the Supreme Court unanimously held the Lystedt statute does contain an implied cause of action against those who fail to comply with it, that coaches and sports programs have a continuing duty to monitor their athletes for concussions, and that a health care provider’s written clearance does not excuse the coach or program from monitoring the returned athlete and taking immediate steps based on their observations.

 

The unanimous decision affirmed dismissal of Dr. Burns because Washington law does not allow the assertion of state jurisdiction over out of state health care providers for care rendered in their home state and not in Washington.  The Court denied the Swanks’ efforts to apply Washington’s long arm statute to Dr. Burns, affirming its decision in Lewis v. Bours, 119 Wn. 2d 667, 835 P.2d 221 (1992).  It reiterated its holding in Lewis that “claims for medical malpractice originating from care provided in another state but the injury manifests itself in Washington do not constitute a tortious act giving rise to the exercise of personal jurisdiction in Washington.”  Lewis, 119 Wn. 2d at 669. The Court held in Swank that, because Dr. Burns provided medical care only in Idaho, the tort occurred in Idaho, not Washington, and therefore Washington courts lacked personal jurisdiction over Dr. Burns. The Court also reiterated the general rule in Washington, and throughout the country, that the provision of medical care, as a personal service, is strongly tied to the location where those services are performed.  Because the decision did not discuss application of the concussion statute to Dr. Burns,  It implicitly rejected the plaintiffs’ arguments that the new law contained a new, separate basis for a malpractice claim against him as a health care provider.  

 

In sum, the Swank decision is a major win for the medical negligence defense bar, Dr. Burns, and physicians’ practices, and patients.  Allowing such a claim for medical care rendered in a neighboring state would have been a major change in law and the plaintiffs worked very hard to get that change, primarily under the authority of the new concussion statute.  By refusing to extend Washington’s personal jurisdiction beyond the Idaho boundaries where Dr. Burns practices, the Washington Supreme Court strengthened the limitations concerning on extending liability of physicians into jurisdictions where their patients’ injuries may manifest. This is an important win for the Defense bar, which frequently faces attempts by plaintiffs to venue shop to expand the liability of a physician to a state with a longer statute of limitations. It further strengthens the protections provided by Lewis v. Bours, and preserves longstanding limitations on potential exposure for physicians who treat patients who reside or participate in athletic events in states where the physician does not practice.  It will likewise encourage the treatment of Washington residents or athletes who seek medical care outside the state, as those non-Washington practitioners need not fear they may be subject to some unknown Washington statute for work they are licensed to do in their home state.

 

If you have questions about this client alert or related topics, please feel free to contact either of the Bennett Bigelow & Leedom, P.S. attorneys: Edward Bruya (ebruya@bbllaw.com), Eric Byrd (ebyrd@bbllaw.com).

 

 

 

AUGUST 2017


On Monday, August 7, 2017, the United States Court of Appeals for the Eleventh Circuit affirmed the dismissal of a proposed class action lawsuit pending in the United States District Court for the Northern District of Georgia.  Two individuals that underwent heart surgery discovered small metallic particles in their brains after the surgery.  They brought suit on behalf of themselves and a putative class, alleging that the particles were metal shavings that had been shed during surgery by instruments manufactured and sold by Intuitive Surgical, Inc. and Intuitive Surgical Operations, Inc. 

 

The plaintiffs asserted several theories of negligence under Georgia law.  The district court granted the defendant’s 12(b)(6) motion to dismiss, ruling the amended complaint’s allegations did not state a claim for negligence under Georgia law.  The district court concluded that the plaintiffs had failed to sufficiently plead that they had suffered an injury due to the defendants’ alleged negligence.  The plaintiff’s contended that the district court’s conclusion was erroneous because the presence of metal shavings in the plaintiffs’ brains is a legally recognized injury in and of itself. 

 

A unanimous panel of the 11th Circuit Court of Appeals agreed with the district judge in their August 7, 2017 ruling.  The 11th Circuit Court stated the plaintiff’s factual allegations must be enough to raise a right to relief above the speculative level based upon the assumption that all of the allegations in the complaint are true.  The 11th Circuit Court said that, under Georgia law, the presence of metal shavings in the brain did not by itself constitute a legally recognized injury.  The judges also said plaintiffs' allegations that they "suffered and will continue to suffer physical, neurological and mental effects" was too vague and did not describe any particular symptoms.  The court also struck down plaintiffs' claims of financial harm, allegedly due to future medical costs and future wage loss because the plaintiffs failed to make clear what symptoms will interfere with their ability to work and cause a loss of wages.

 

The case is Nassar Cure et al v. Intuitive Surgical Inc et al, No. 17-10978 (11th Cir. 2017).

 

 

JULY 2017

OIG Issues Favorable Advisory Opinion Relating to Waivers of Copayments

On July 7, 2017, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued Advisory Opinion 17-02.  The Advisory Opinion relates to a request by a hospital outpatient facility and a biomedical company that proposed to reduce or waive the cost-sharing amounts owed by Medicare beneficiaries for items and services furnished in connection with a clinical research study.

Brief Summary of Fact
The hospital is a non-profit, full-service, 171-bed regional medical center that provides inpatient and outpatient services and operates an outpatient facility (“Center”). The Center furnishes comprehensive wound care services, primarily to patients with chronic, non-healing wounds.

The biomedical company manufactures biodynamic therapies for wound care, including a product cleared by the U.S. Food & Drug Administration, which is indicated for the management of ulcers and exuding wounds (“Wound Care System”).

Under the proposed arrangement, the Center would reduce or waive applicable cost sharing amounts owed by financially needy beneficiaries for all study-related items and services.  The biomedical company certified that it would not compensate or reimburse the Center or the hospital in any manner for reduced or waived cost-sharing amounts owed by Medicare beneficiaries.

Under the Proposed Arrangement, the Center would determine a beneficiaries’ financial need in accordance with the hospital’s financial need policy. According to the financial need policy, to qualify for financial assistance, individuals must complete an application and provide documentation such as payroll check stubs, unemployment records, documentation of government benefits, and any other financial documentation requested by the hospital.  In addition, the hospital’s financial need policy requires patients to certify that all information provided on the financial need application is true.  Additionally, the waivers or reductions would not be on a non-routine basis and would not be advertised.

Brief Legal Summary
The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. For purposes of the anti-kickback statute, “remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind.  Where remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program, the anti-kickback statute is violated. By its terms, the statute ascribes criminal liability to parties on both sides of an impermissible “kickback” transaction.

The Beneficiary Inducement Civil Monetary Penalty rule provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or Medicaid beneficiary that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or Medicaid. The OIG may also exclude a party from Medicare for violations of the Beneficiary Inducement CMP rule.

Conclusion
The OIG concluded that the Proposed Arrangement would not constitute grounds for the imposition of civil monetary penalties and although the Proposed Arrangement could potentially generate prohibited remuneration under the anti-kickback statute, the OIG would not impose administrative sanctions.  The OIG relied on several factors including: (1) there was no advertising of the offer to reduce or waive the cost-sharing or waiver, (2) the study participants would not be told of the offer unless the study participant expressed an inability to pay the cost sharing portion, (3) the reduction or waiver of cost sharing amounts was not routine, and (4) the waiver would be based on objective evidence of financial need.

To view the advisory opinion you may click on the following link: https://oig.hhs.gov/fraud/docs/advisoryopinions/2017/AdvOpn17-02.pdf

 

 

JUNE 2017

 

CMS Lifts Prohibition on Nursing Home Arbitration Agreements After SCOTUS Decision

On Monday, June 6, 2017, the Centers for Medicare and Medicaid Services (CMS) proposed a rule rescinding a previous regulation that prohibited nursing homes and long-term care facilities from offering pre-suit arbitration agreements to incoming residents and their families as a condition of admittance.

The proposed revision represents a major change in course for CMS. In October of 2016, the regulation published by CMS prohibited nursing homes and long-term care facilities that participate in Medicare or Medicaid from requiring prospective residents to enter arbitration agreements. Soon after the regulation took effect, the American Health Care Association (AHCA) and several nursing homes in Mississippi brought suit in Federal Court, challenging the regulation and seeking a preliminary injunction to enjoin CMS from its enforcement. (See American Health Care Association vs. Burwell, District Court for the Northern District of Mississippi, Civil Action No. 3:16-Cv-00233). The suit alleged the regulation violated the Federal Arbitration Act and that CMS had exceeded its authority under the Medicare and Medicaid Acts, among other things. The District Court agreed, and issued a preliminary injunction enjoining CMS from enforcing the ban on arbitration. Thereafter, CMS appealed the ruling to the United States Circuit Court of Appeals for the Fifth Circuit. However, rather than submit their appellate brief in the case, CMS voluntarily withdrew its appeal and has now issued the proposed revision eliminating the prohibition on arbitration agreements.

The new proposed rule and CMS’s withdrawal of its appeal comes less than a month after the Supreme Court of the United States (SCOTUS) issued its decision in Kindred Nursing Centers LP vs. Clark. In Kindred, SCOTUS struck down a decision by the Kentucky Supreme Court which held arbitration agreements executed pursuant to a power of attorney were unenforceable unless they contained specific provisions giving the signor authority to waive a resident’s right to a trial by jury.  Accordingly, assuming the proposed revision is implemented, nursing homes and long-term care facilities will be able to offer pre-suit binding arbitration agreements to residents prior to admittance without any legal impediments. The deadline for public comment on the proposed revision is August 7, 2017.

 

MAY 2017


No Business Associate Agreement Leads to a $31,000 Penalty

Jim Hoover

Suite 3400 • 420 North 20th Street • Birmingham, Alabama 35203

jhoover@burr.com   www.burr.com

 

On, April 20, 2017, the Center for Children’s Digestive Health (CCDH) paid the U.S. Department of Health and Human Services (HHS) $31,000 to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule and agreed to implement a corrective action plan. CCDH is a small, for-profit health care provider with a pediatric subspecialty practice that operates its practice in seven clinic locations in Illinois. 

 

In August 2015, the HHS Office for Civil Rights (OCR) initiated a compliance review of the Center for Children’s Digestive Health (CCDH) following an initiation of an investigation of a business associate, FileFax, Inc., which stored records containing protected health information (PHI) for CCDH. While CCDH began disclosing PHI to Filefax in 2003, neither party could produce a signed Business Associate Agreement (BAA) prior to Oct. 12, 2015. Additionally, neither party could produce a signed BAA prior to Oct. 2015.

 

The OCR has penalized more and more cases with covered entities and business associates for not having a business associate agreement.  It is important for you to remember that if your law firm represents a healthcare client and has access to patient health information as a result of that representation your firm is likely a business associate of the healthcare client.  As a result, the law firm and healthcare client must enter into a HIPAA compliant business associate agreement.  Otherwise, both the healthcare client and the law firm are subject to penalties. 

 

 


 

 

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