Hot Legal Topics That Every Malpractice Lawyer Will Encounter

Wednesday, July 27, 2011

12:15 p.m. - 1:15 p.m.

Philadelphia Bar Association

1101 Market Street #11

Philadelphia, PA 19107-2911

Presented by: Clifford A. Rieders, EsquireRieders, Travis, Humphrey, Harris Waters & Waffenschmidt161 West Third StreetP.O. Box 215Williamsport, PA 17703-0215Phone: 570-323-8711Fax: 570-567-1025Email: crieders@riederstravis.comwww.riederstravis.com

Collateral Source Rule

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Section 508 of Mcare Act

(a) General Rule. – Except as set forth in subsection (d), a claimant in a medical professional liability action is precluded from recovering damages for past medical expenses or past lost earnings incurred to the time of trial to the extent that the loss is covered by a private or public benefit or gratuity that the claimant has received prior to trial.

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Collateral SourcesSection 508

(b) Option. – The claimant has the option to introduce into evidence at trial the amount of medical expenses actually incurred, but, the claimant shall not be permitted to recover for such expenses as part of any verdict except to the extent that the claimant remains legally responsible for such.

(c) No subrogation. – Except as set forth in subsection (d), there shall be no right of subrogation or reimbursement from a claimant’s tort recovery with respect to a public or private benefit covered in subsection (a).

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Collateral SourcesSection 508

(d) Exceptions. – The collateral source provisions set forth in subsection (a) shall not apply to the following:

(1) Life insurance, pension or profit-sharing plans or other deferred compensation plans, including agreements pertaining to the purchase or sale of a business.

(2) Social Security benefits.

(3) Cash or medical assistance benefits which are subject to repayment to the Department of Public Welfare.

(4) Public benefits paid or payable under a program which under Federal statute provides for right of reimbursement which supersedes State law for the amount of benefits paid from a verdict or settlement.

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Example 1 - HMO’s

Plaintiff is enrolled in an HMO plan provided through employer. The HMO is part of the welfare benefit plan as defined in ERISA.

In the context of public employment, post-retirement medical benefits have been found to be “deferred compensation” – compensation for services already rendered in the past.

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HMO’s Are Excepted

There is no logical reason why the medical benefits provided in Example 1 under the HMO plan arising out of private employment should not also be treated as deferred compensation. The receipt of benefits under the plan does not constitute a “gratuity.

Payments therefore made under plaintiff’s HMO plan fall within the exception set forth in 508(d)(1). The abrogation of the collateral source rule set forth in 598(a) does not apply and plaintiffs should be able to plead, prove and recover the medical expenses.

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Anti-subrogation Inapplicable

In example 1 the anti-subrogation provision of 508(c) is inapplicable because the medical insurance benefits are paid pursuant to an HMO plan. See Wirth v. Aetna U.S. Healthcare, 469 F.3d 305 (3rd Cir. 2006)

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Example 2

Should this logic apply to any ERISA plan?

Depends on the Judge.

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Moorehead Issues

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Whether Moorhead Should Be Applied to Medical Malpractice Cases

• Moorhead v. Crozer Chester County Medical Center, 564 Pa. 156, 765 A.2d 786 (2001). In Moorhead the plaintiff’s recovery was limited to the amount paid by Medicare and her supplemental insurance, although it was stipulated that the reasonable value of the medical services was higher.

• Moorhead involved medical services provided by the tortfeasor itself so that the application of the collateral source rule would have required in effect double payment. Moorhead denied it was a collateral source case, however.

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• Since the court allowed plaintiffs damages for the amount actually paid to the medical facility, and the facility itself provided services in greater amount, the medical facility, in effect, actually made plaintiff whole for the full amount of the claimed medical expenses. Hardi v. Mezzanotte, 818 A.2d 974, 985 (D.C. App. 2003)

Facility Provides Services

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Double Dip

Moorehead involved medical services provided by the tortfeasor itself so that an application of the collateral source rule would have required, in effect, double payment.

The situation should be different where the bills are from other healthcare providers. In those circumstances, private health insurers or public insurers paid medical expenses and any write-offs that occur where the byproduct of the insurance carrier’s negotiations with the medical providers. Therefore plaintiff and not defendant should receive the benefit of their insurance contract. This is consistent with the collateral source rule, which Moorehead said it was not touching.

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Moorehead and Mcare

It is noteworthy that in the Mcare Act the legislature felt it was necessary to explicitly modify the collateral source rule because it must also have viewed the Moorehead decision as limited in application. For an excellent discussion, see Robinson v. Bates, 160 Ohio App.3d 668, 828 M.D.2d 657 (2005).

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Sequestration

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Sequestration• When you are taking a deposition, are you entitled

to insist on sequestration of all witnesses?

• You may think this one is obvious, but we have the case on appeal in the matter of Bailey v. Lobar, et al. where a an opinion has been rendered.

• In Bailey v. Lobar, the trial court granted sequestration request.

• Involved was fall from scaffolding. We had requested that different witnesses from the same defendant not be present during the deposition and that the attorney not tell other undeposed witnesses of the deposition testimony of the deponent.

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• There is a difference between federal and state rules on the matter.

• Pennsylvania Rule of Evidence 615 authorizes the sequestration of deposition witnesses.

• The Rules of Civil Procedure are applicable to discovery.

• The Rules of Evidence do apply to discovery depositions.

Logic

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• What sort of “cause” need be shown for such a sequestration order? 

• The existence of good cause for protective order “is a factual matter to be determined from the nature and character of the information sought by deposition or interrogatory weighed in the balance of the factual issues involved in each action.”

Good Cause

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Superior Court Rules

The Superior court handed down a ruling June 23, 2011, before Panella, Shogan and Allen, first quashing defendant’s appeal on the sequestration order as interlocutory.

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Court’s Ruling

Attorney-client argument does not apply.

Defendants and their lawyers not compelled to disclose confidential communications.

Sequestration order ensures the integrity of the discovery process, “Prohibits the Defendant’s employees, and their lawyers, from informing one employee of the substance of another employee’s deposition testimony.” Slip opinion p.4, citing Dade v. Willis, 1998 WL 260270; 1998 U.S.Dist. LEXIS 5941 (E.D. Pa. 1998)

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Substance Of The Order

Although certain employees will not know the substance of the other employees’ deposition testimony prior to the deposition, this would not proven an attorney from adequately preparing his client for deposition. In preparation for deposition, an attorney should inform his client about what to expect at a deposition, review the client’s testimony about the incident, and instruct the client to testify truthfully and without influence from extraneous sources. The lawyers subjected to the trial court’s sequestration order are not presented from taking these measures or for giving this advice. Slip opinion p.5.

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Refreshing Recollection

• If an employee cannot remember, he should so state during his deposition.

• Employee’s memory can be refreshed at trial.

• Employees will be aware of other employee’s deposition testimony following their depositions and prior to trial.

• Employees can adjust or modify their trial testimony subject to impeachment.

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Opinions Currently Held By Doctors and Medical Health

Care Professionals

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Caldwell v. Branton(Pa. Com. Pl. 2009)

Opinion by Anderson, J.

• Plaintiff alleged her left ureter was injured during surgery and that misread CT scan caused delay in diagnosing injury, causing further injury

• Plaintiff filed motions to compel further depositions of two physicians, regarding their opinions at time they were given, currently and any time in between in order to probe underlying reasoning for opinions to test their accuracy and veracity

• Since physicians were testifying as fact witnesses and not expert witnesses, the accuracy and veracity of their current opinions were not relevant, only their opinions at the time they were rendered were relevant

• McLane v. Valley Medical Facilities, No. DG08-005616 (Allegheny Co. March 5, 2009)

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Current Opinions and Depositions

• What the trial courts have ruled is that only doctor opinions at the time they were rendered are relevant.

• Cannot test past opinion with current information.

• Has doctor changed his or her mind?

• Would it make any difference if the doctor was going to testify as an expert witness?

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Ostensible Agency

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Ostensible Agency

• A physician who holds an independent contractor status with a hospital may be considered an agent of the hospital with respect to a patient based upon theory of ostensible agency.

• Bear in mind that these hospitals are constantly changing, reinventing themselves, creating new marketing entities, fictitious names, and the like. Make sure to cover this in discovery.

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• Ostensible agency is now codified at 40 P.S. § 1303.516(a).

• A hospital may be held vicariously liable through principals of ostensible agency only if the evidence shows that:– A reasonably prudent person in the patient’s position

would be justified in the belief that the care in question was being rendered by the hospital or its agents; or

– The care in question was advertised or otherwise represented to the patient as being rendered by the hospital or its agents.

• This section codified and broadened Capan and its progeny.

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Ex parte Communication with Physicians

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Pathologists?

We all know that defendants cannot have ex parte communication with treating physicians.

How about a pathologist performing an autopsy?

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Judge J. Michael Williamson

Judge Williamson, in Gentile v. Timko, ruled that the Pennsylvania Rules of Civil Procedure 4021, Protective Orders. The court considered such discussions to be “discovery,” and therefore not permissible. That court did not reach the issue as to whether the pathologist was an employee who could be talked to.

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