2004 Case Law Update

STATE AND FEDERAL CASES

Administrative Law

1. Merkel v. Board of Emergency Medical Services, No. 89,384 (unpublished) Kan. App. (9-12-03).

Merkel appealed the revocation of his mobile intensive care technician license contending his constitutional rights were violated by the appointment of the hearing officer and that there was insufficient evidence to warrant revocation. Merkel apparently inserted a nasogtracheal tube into the patient's esophagus. He contended that the agency's ability to appoint its own hearing officer was improper. The appellate court did not review the issue of how hearing officers were appointed, deeming it was not promptly raised (even though it was submitted before the hearing and to the trial court). It also found the evidence insufficient to overturn the agency decision.

Causation

1. McCaffree v. Via Christi Regional Medical Center, No. 88,209 (unpublished) Kan. App. (12-19-03).

Following a four and one-half week trial, the jury was unable to reach a verdict and the court dismissed the case. The Court of Appeals affirmed. The patient had a heart transplant in St. Louis and received follow-up care in Wichita. About eight months after the transplant she was hospitalized with gastrointestinal difficulties but without apparent concern about her heart. She had gall bladder surgery with some unusual findings related to her liver. The following day she deteriorated and there was concern about transplant rejection. She died and the cause of death was disputed. Her husband sued claiming diagnosis delay. The court dismissed finding no deviation or causation. On plaintiff's motion for new trial, the judge reconsidered the standard of care ruling, but denied a new trial on causation. The court found that based on the testimony provided, direct causation was not shown. The Court of Appeals also upheld the trial court's denial of plaintiff's motion to add a punitive damage claim, essentially finding that malpractice does not equate to punitive damages conduct.

2. Nichols v. USA, 2004 U.S. Dist. Lexis 5083 (D. Kan.)

In this Tort Claims Act case, the judge ruled for the defendant on causation. The court found that because the injury would have occurred regardless of the delay in diagnosis there was inadequate proof of causation. The plaintiff claimed that a delay in a diagnosis of skin cancer caused her to undergo extensive surgery but the evidence demonstrated she would have had the same surgical procedure.

Child Abuse Reporting

1. Cortez v. Pawnee Mental Health Services, No. 89,955 (unpublished) Kan. App. (10-3-03).

Plaintiff sued because defendant's employee reported suspected child abuse to SRS. The court found that because plaintiff stipulated that the physician did not act with malice summary judgment was warranted based upon K.S.A. 38-1526 which provides immunity unless there is malice.

Comparative Negligence

1. Maunz v. Perales, 276 Kan. 313 (2003)

Maunz committed suicide after his discharge from the hospital. The jury assigned 79% of the fault to him, and his parents appealed. The Supreme Court held that his fault could be compared. Defendant claimed Maunz was at fault for not being candid about his emotional state, obtaining a gun, purchasing ammunition, failing to seek assistance to deal with his suicidal thoughts and purposefully taking his own life. The court found that in adopting comparative negligence the legislature made it clear that people have a duty to exercise ordinary care for their own safety. The court also found comparison appropriate because the suicide occurred in a non-custodial setting; Kansas law allows comparison when a patient fails to follow his physician's advice; and the jury was able to evaluate capacity.

Contracts

1. Graham v. Cirocco, 31 Kan. App. 2d 563 (2003)

A covenant not to compete that froze defendant out of the Kansas City area and gave the former employer a virtual monopoly was not enforceable. A 150-mile restriction of patient solicitation was reasonable, but a 25-mile limit on office placement was not reasonable.

2. Riverside Health Systems v. Unruh, No. 90,370 (unpublished) Kan. App. (10-31-03)

Riverside had a professional services agreement with Dr. Unruh which allowed Riverside to seek overpayments made to Unruh. Riverside assigned the agreement to Via Christi with Unruh's consent. In an asset purchase agreement with Via Christi, Riverside retained the right to recoup overpayments made to Unruh. Riverside terminated the agreement with Unruh the day before the assignment went into effect. The trial court held Riverside could validly terminate, assign and recoup. The Court of Appeals reversed. It held that the contract was not terminated, therefore Riverside could not recoup under that provision, however, the court suggested that Riverside had the right to recoup because it was a personal right that constituted an accrued cause of action.

Damages

1. Rose v. Via Christi Health System, Inc., 276 Kan. 539 (2003) on review

The rule established in Bates v. Hogg is not extended to Medicare. In so holding, the court viewed Medicare like private insurance, rather than a public benefit and found that the windfall from a person's collateral sources should benefit the individual, not the tortfeasor.

2. Stewart v. Hutchinson Hospital Corp., No. 89,687 (unpublished) Kan. App. (1-9-04)

The trial court granted the plaintiff's motions to seek punitive damages in a medical malpractice case based on allegations that the hospital's nursing staff administered overdoses of morphine on two occasions. On interlocutory appeal the Court of Appeals reversed. Noting that it was obligated to follow the standards imposed by K.S.A. 65-3702 and K.S.A. 65-3703, the Court held that plaintiffs failed factually to meet their burden. The Court noted that the plaintiffs needed to present expert testimony to establish wanton conduct relating to policies, procedures and error rates.

Employment

1. Goodman v. Wesley Medical Center, 276 Kan. 586 (2003)

Goodman, a Wesley nurse, was terminated because she gave the plaintiff's attorney in a pending malpractice case confidential patient and staffing information. Goodman claimed retaliatory discharge for reporting unsafe nursing practices in violation of the Kansas Nurse Practice Act. The court found that a retaliatory discharge claim could not be based upon Goodman's personal opinions about violations of the Nurse Practice Act when the Act set no definite or specific rules. Further, risk management laws preclude common-law retaliatory discharge claims for reporting standard of care issues.

2. Welding v. Bios Corp., 353 F. 3d 1214 (10th Cir. 2004)

Plaintiffs sued under the Fair Labor Standards Act for overtime pay. Plaintiffs provided in-home services to developmentally disabled persons. The employer claimed that the workers were exempt under the companionship exemption. The trial court considered the clients as a group and denied defendant's motion for summary judgment. The court disagreed noting that to be entitled to the exemption the place of service must be a private home and that this determination must be made on a case-by-case basis. The case was remanded with specific factors for consideration.

Expert Witnesses

1. Cunningham v. Riverside Health System, No. 89,826 (unpublished) Kan. App. (10-31-03)

Plaintiff claimed that a nursing assistant twisted her leg while helping her into bed, causing her femur to break. Defendant's experts opined that the break most probably resulted from disuse osteoporosis. Plaintiff's treating physician agreed with the expert. Another defendant's expert opined there was no deviation from the standard of care. Plaintiff did not have expert testimony, contending that the common knowledge rule applied. Summary judgment for the defendant was upheld. Plaintiff's osteoporosis and recent knee surgery, along with the complexity of determining the cause of the fracture made expert testimony necessary.

2. Dawson v. Prager, 276 Kan. 373 (2003)

Plaintiff's expert was excluded because he did not spend 50% of his professional time in actual clinical practice. In his deposition, the expert agreed that he did not spend the requisite amount of time in patient care activities as defined by counsel. Plaintiff argued that counsel defined clinical practice too narrowly, but the court based upon the testimony, rejected the argument because the expert included time spent outside actual patient care and included patient related activities in his calculation. The court also rejected a post-deposition affidavit. Additionally, the court upheld summary adjudication of plaintiff's negligent infliction of emotional distress, outrage, money had and received, and breach of fiduciary duty claims stating that they were coexistent with the malpractice claim.

3. Diggs v. McCann, No. 89,429 (unpublished) Kan. App. (8-8-03)

The trial court ordered plaintiff to pay mileage and an expert witness fee to his treating physician. The physician was subpoenaed to testify at trial as a fact witness, but he was asked opinion questions at trial. The Court of Appeals reversed finding the opinion questions were tangentially related to questions about his treatment of plaintiff.

4. Uhrich v. Gripps, U.S. Dist. No. 02-1238-JTM (D. Kan. 9-29-03)

Plaintiff's motion to compel production of defendant's non-testifying expert reports was denied. Tissue samples were sent to various physicians for review and plaintiff claimed that examination of the samples was actually an examination under Rule 35. The court rejected this argument.

Insurance/Fund Issues

1. Holt v. Wesley Medical Center, L.L.C., 2004 Kan. Lexis 144

Plaintiffs sued various providers including the Wichita Center for Graduate Medical Education in federal court for negligence arising out of the birth of Kimberly Holt in 1998. Judge Robinson certified questions to the Kansas Supreme Court regarding whether the retroactive application of K.S.A. 40-3404(h) to the case by application of 2001 amendments violated Sections 1 and 18 of the Kansas Bill of Rights. In 2001, nonprofit corporations organized to administer graduate medical education programs were added to the definition of health care provider and included in the Fund making them eligible for the prohibition against vicarious liability. The Supreme Court found that the amendment was substantive and therefore its retroactive application deprived the plaintiffs of a vested right, and violated ' 18 (due process). It did not violate ' 1 (equal protection) because all legislation must have an effective date and equal protection based upon such classification has no utility.

2. Marshall v. KaMMCO, 276 Kan. 97 (2003)

Marshall received a records request from the Weiss' whose son sustained birth injuries. After receipt of the request Marshall applied for a million dollar excess coverage endorsement from KaMMCO. Marshall was sued and demanded excess coverage from KaMMCO. After KaMMCO refused, Marshall filed a declaratory judgment action and was granted summary judgment. The Supreme Court reversed, finding that the claims made requirement for malpractice insurance applied only to basic coverage, that basic coverage and excess coverage are not similar coverages; therefore, the excess policy did not have to cover the prior event; and that the policy did not violate public policy. The court balanced three factors: the concept of insurance coverage that is simultaneous with the insured's legal liability, freedom to contract, and fraud prevention.

3. Smith v. Almonte, 32 Kan. App. 2d 224 (2003)

The Court of Appeals reversed the trial court's order that the Kansas Health Care Stabilization Fund make a second installment payment within the same fiscal year. The plaintiff obtained judgment in 2001. The defendants in that case appealed, the judgment was upheld in 2002 and the Fund made its first payment. The Fund claimed it was not liable to pay until after appeal. Plaintiff claimed the first payment was due 60 days after the initial judgment. The Court of Appeals held that because the Fund filed a bond, it did not owe payment until after the appellate ruling. The bond stayed the proceedings (not the liability), thereby staying any action to collect the judgment.

Insurance Issues

1. Administrative Committee of the Wal-Mart Associates Health and Welfare Plan v. Willard, 2004 U.S. Dist. Lexis 2164 (D. Kan.)

Willard received a settlement in a negligence case. The amounts of the settlement attributable to medical expenses were paid into the court. Wal-Mart Plan then sued for declaratory judgment to recover the amounts it had paid under the Plan for Willard's medical care. The court found that because the monies were paid into court and no personal liability was sought against Willard, that the suit was equitable in nature and therefore not prohibited by ERISA. The court also found that pursuant to a subrogation and reimbursement provision contained in the Plan, that Wal-Mart Plan was entitled to the money. The court held that the subrogation prohibition contained in K.A.R. 40-1-20 was not applicable to the Plan because the Plan was not an insurance company but a self-funded plan.

2. Blue Cross and Blue Shield of Kansas v. Prager, 276 Kan. 232 (2003)

Anthem Insurance Companies sought to purchase Blue Cross and Blue Shield of Kansas. The Insurance Commissioner denied the request. The district court reversed, and the Kansas Supreme Court disagreed with the district court, finding that it was too narrow in its interpretation of the law. The Supreme Court held that the Insurance Commissioner was empowered by the Kansas Insurance Holding Company Act to deny an acquisition when it was not in the interest of the public, the policyholders and the insurance buying public and that merely meeting the statutory criteria does not necessarily equate to operating in the best interests of the public, policyholders or insurance buying public. The Commissioner's interpretation of the statutes and regulations were entitled to deference and were rationally based, according to the Court.

3. Fought v. ONUM Life Insurance Co., 357 F. 3d 1173 (10th Cir. 2004)

The plaintiff was diagnosed and treated for coronary artery disease. She underwent coronary surgery and developed an infection which led to her disability. She was denied disability benefits because the Plan Administrator concluded the disability was caused by a preexisting condition. Ms. Fought had coronary artery disease prior to enrollment, but her surgery was after enrollment. UNUM admitted it operated under a conflict of interest because it administered the Plan and paid claims. The trial court granted summary judgment which the Tenth Circuit reversed. The Court of Appeals ruled that a sliding scale approach should be used to review the plan administrators' acts. Under that approach the court utilizes an arbitrary and capricious standard but decreases the level of deference given to the administrator in proportion to the seriousness of the conflict of interest. The court then defined the level of deference. First, the administrator bears the burden to justify the reasonableness of its decision; second, when the administrator is also the insurer, it must show by a preponderance of evidence that the denial was warranted. Using these standards, the Court of Appeals also used Department of Labor regulations to find UNUM must demonstrate proximate cause between the preexisting condition and the disabling condition (that the infection was a preexisting condition). The Court found UNUM interpreted its language too broadly.

4. Lefler v. United Healthcare of Utah, Inc., 2003 U.S. App. Lexis 16700 (10th Cir).

Class action plaintiffs sued the plan administrator claiming he improperly calculated co-payment amounts in violation of ERISA. The plaintiffs claimed that their co-payments were based upon reasonable and customary charges, while the plan's payments were based upon negotiated discounted amounts. The co-pay amounts paid were essentially greater than the amounts stated in the plan according to the plaintiffs. The Tenth Circuit held that because the administrator's interpretation that allowed co-pays to be based on customary charges was reasonable, and it was controlling. The Tenth Circuit noted that the same method was used by Medicare and was approved by the state health department. Because the court was construing the reasonableness of the administrator's interpretation of the plan, not the plan itself, construction against the plan was not appropriate.

Medicare/Medicaid Issues

1. Bartlett Memorial Medical Center v. Thompson, 347 F. 3d 828 (10th Cir. 2003)

Plaintiff owned several hospitals that participated in the Medicare and Medicaid programs. In February 1997 the Secretary issued a ruling detailing a new calculation for disproportionate share hospitals. The new calculation was to be applied prospectively or to providers with pending appeals. Plaintiff did not fall into the appellate category and sought to have its Notice of Program Reimbursement reopened. The intermediary refused and suit was filed. The district court held that some NPRs should be reopened. On appeal, the Tenth Circuit held that although there was not mandamus jurisdiction, there was federal question jurisdiction because the case presented an issue related to an exception allowing challenges to the validity of the Secretary's instructions and regulations. On the merits, however, the plaintiff failed. The court held that plaintiff did not show entitlement to mandatory reopening.

2. Fisher v. Oklahoma, 335 F. 3d 1175 (10th Cir. 2003)

Plaintiffs were HCBS (Home and Community Based Services) recipients under Oklahoma's Medicaid program. They sued under the Americans With Disabilities Act because HCBS recipients were limited to five prescriptions due to budgetary shortfalls. Nursing home residents were not limited. The Tenth Circuit reversed the district court's grant of summary judgment to defendant, finding that there was a factual issue related to violation of the integration mandate forbidding unjustified isolation of the disabled. The appellate court also found that the fact the program was optional did not support a fundamental alteration defense under the ADA. The court was not persuaded by the state's defense of budgetary restrictions.

3. Soskin v. Reinertson, 353 F. 3d 1242 (10th Cir. 2004)

Plaintiffs, a class of legal aliens, sued alleging Colorado's Medicaid's eligibility requirements violated their equal protection and due process rights. Colorado, in response to budgetary concerns terminated optional Medicaid coverage to legal aliens. The Tenth Circuit agreed with the trial court that the plaintiffs' claims were unlikely to succeed on the merits. The court, using the rational basis level of scrutiny found that the Personal Responsibility and Work Opportunity Reconciliation Act (Welfare Reform Act) authorization to the states to provide or deny benefits did not violate the uniformity requirement of the naturalization clause; and that the PRWORA created separate programs for aliens and citizens. In the aliens-only program states had the option of including or not including more or fewer aliens. This was not considered discrimination between aliens and citizens, and any discrimination among aliens would not be based upon any suspect classification, thus rational basis scrutiny was appropriate. The Tenth Circuit did, however, reverse and order a preliminary injunction on the due process issue finding that the defendant could not terminate benefits for failure to return a redetermination form unless the beneficiary was given notice of a right to a pre-termination hearing.

Parallel Proceedings

1. Clark v. Vitt, 2004 U.S. Dist. Lexis 2595 (D. Kan.)

Plaintiff sued in state and federal court. Defendant moved to stay the federal proceedings. Plaintiff moved to dismiss the state court proceedings and a hearing was held, but the state court judge deferred ruling until the motion to stay was resolved. The federal court denied the motion, finding that defendant filed an answer first in the federal case, that plaintiff had moved to dismiss the state case, that jurisdiction was proper in federal court and that a scheduling order had been issued.

Peer Review

1. Lloyd v. Quorum Health Resources, L.L.C., No. 88, 451 (unpublished) Kan. App. (3-14-03)

Dr. Lloyd sued for tortious interference with contractual relations, defamation and invasion of privacy. The suit arose from an investigation of Lloyd's conduct with nursing staff. Lloyd filed a complaint with the Board of Nursing claiming that the nursing supervisor manufactured the complaints. The court found that there was a duty to investigate (although it found that unless the investigation involved quality of care issues it would not fall within the peer review or risk management laws) and qualified immunity. The court also found qualified immunity for business communications. There was no malice established in any claim, thereby mandating summary judgment.

2. Public Citizen v. HHS, 332 F. 3d 654 (D.C. Cir. 2003)

When a Medicare beneficiary files a PRO complaint about the quality of care provided, Medicare must inform the beneficiary about the results of its review. Before this decision invalidated provisions of the Department of Health and Human Services Peer Review Organization Manual, the PRO would traditionally notify the beneficiary that it was examining the concerns noted by the beneficiary and the provider could block information from being released.

Res Ispa Loquitur

1. Cohen v. Lockwood, 2003 U.S. Dist. Lexis 10143 (D. Kan.)

This case arose out of plastic surgery gone awry. Plaintiff alleged negligence and res ipsa loquitur. Defendant's motion to dismiss was denied. The court did not consider the proffered deposition testimony of the plaintiff, limiting its consideration to the pleadings. The court held that plaintiff had alleged the required elements of res ipsa loquitur in her complaint by claiming she was under the exclusive control of defendant and she received injuries that would not ordinarily occur if the defendant used proper care.

2. Hartnett v. O'Rourke, 2003 U.S. App. Lexis 14726 (10th Cir)

After surgery, the plaintiff's wife had a massive hemorrhage and died. The trial court granted summary judgment to defendants based upon their deposition testimony that two sutures were used to close the splenic artery. The family had claimed that only one suture was used and on appeal the Tenth Circuit found that there was sufficient evidence to create a fact issue whether one or two sutures were utilized. The use of the phrase "was ligated" appearing in the medical record for the surgery in question, when compared with a plural reference documenting a subsequent surgery created the factual issue. The court did however find that the res ipsa loquitur doctrine was not applicable.

Loss Of Chance

1. Hilleary v. Hopkins, No. 89,000 (unpublished) Kan. App. (6-6-03)

Dr. Hopkins and Dr. Striebinger operated on plaintiff in an attempt to alleviate her back pain. She noticed fluid leaking from the incision site. Hopkins was leaving on vacation, so Striebinger saw the patient and performed a subsequent procedure. He found that the suture closing the dura had come untied. Plaintiff sued, and the trial court granted summary judgment. The appellate court upheld the trial court on summary adjudication of plaintiff's loss of chance of a better recovery claim because her expert did not provide any opinion on the percentage of chance lost. However, the court reversed on the issue of malpractice in tying the suture because there was a factual issue on who tied the suture. In their depositions, Striebinger admitted doing it, Hopkins testified he did not know who did it and plaintiff said Hopkins told her he had tied the suture.

Service Of Process

1. Barnes v. Patel, No. 90,305 (unpublished) Kan. App. (9-12-03)

Plaintiff failed to properly serve defendant prior to expiration of the statute of limitations. The trial court dismissed the case and the Court of Appeals affirmed. Barnes was a federal prisoner at Leavenworth and was pro se. The clerk wrote him informing him that they did not have forms or instructions for filing malpractice actions and he would be responsible for the documents. She provided him with legal referral data. Barnes sent the petition certified mail, return receipt, but did not request issuance of summons or file a return of service. Barnes then moved to amend but did not appear at the docket hearing. The case was dismissed for lack of prosecution but later reinstated. A praecipe was filed and summons issued to each defendant. Patel was served and moved to dismiss arguing that service was not effected within 90 days and the statute of limitations had run. Barnes failed to effect service by certified mail because he did not obtain summons and did not file a return. Service was documented 11 months after the petition was filed, therefore it did not relate back. Further, the absence of any responsive pleading from defendants indicated they did not have actual knowledge of suit to allow relation back.

2. Handy v. Reed, 81 P. 3d 450 (Kan. App. 2003)

Summary judgment for the defendant was upheld on appeal. Handy had two rotator cuff surgeries when he injured his shoulder a third time. In July 1996 Reed recommended physical therapy but ultimately performed surgery in October. He released Handy to work on January 20, 1997. Handy felt he was still injured and was involved with the Social Security and workers compensation systems. In February 1998 Reed issued an opinion in the compensation case based on then current records; he felt Reed might have a pinhole or suture track communication, but no significant tear. On September 4, 1998 surgery revealed a significant rotator cuff tear. Handy sought legal counsel in November 1998 and knew he had a claim against Reed. On September 5, 2000 he filed suit, but Reed was not served within 90 days. The case was dismissed without prejudice January 3, 2001. On July 3, 2001 a second suit was filed and Reed was served October 21, 2001. The trial court granted summary judgment which was upheld. The appellate court found that the case was commenced July 3, 2001 because Reed was never served in the September case, thus the savings statute was not applicable. Further, the latest date Reed treated Hardy was January 31, 1997 and commencement of suit on July 3, 2001 was outside the statute of repose.

3. Huebner v. Rosen, 2003 U.S. App. Lexis 22739 (10th Cir.)

Plaintiff's case was dismissed for failure to properly serve defendant within the statute of limitations. Rosen performed an examination of plaintiff in a medical staff dispute. Plaintiff subsequently sued Rosen for failure to diagnose a brain tumor. Plaintiff filed in state court and voluntarily dismissed the case, then he refiled in federal court and served defendant at his business address by certified mail. The return receipt was illegible and defendant denied signing it. Defendant filed an answer with the affirmative defense of improper service. Plaintiff argued that defendant was equitably estopped from raising the defense because in his answer he admitted he could be served at work. Plaintiff also argued that by waiting until the statute ran to file briefs, the defendant misled him. Plaintiff also argued that the case should not have been dismissed because the defendant had actual notice of suit, but the court found the record did not demonstrate defendant had actual notice.

4. Tharp v. Lee, 2004 Kan. App. Lexis 271

The patient in this case died September 27, 1999. On September 26, 2001 suit was filed. After suit was filed plaintiff moved for additional time to serve defendants. After a hearing which was held over 90 days after suit was filed, the court granted plaintiff 30 additional days to obtain service. Service was perfected within 120 days of the date the petition was filed. The following month plaintiff dismissed the case without prejudice; then refiled six months later. Approximately 84 days later plaintiff moved for additional time to obtain service. The motion was granted and plaintiff perfected service within 120 days of refiling the case. Defendant moved to dismiss based upon expiration of the statute of limitations. Plaintiff claimed that service related back to the original petition. The Court of Appeals affirmed the trial court finding that a plaintiff must request an extension and obtain the order within the 90-day period for service to relate back.

Statutory Employees

1. Locke v. Hewitt, No. 90,744 (unpublished) Kan. App. (2-20-04)

Locke injured her back during the course of her employment at Mercy Health Center. Dr. Hewitt's employer, Midwest, contracted with Mercy to provide emergency room coverage and health care for hospital employees. Upon injury Locke was examined by Hewitt who recommended an MRI and neurosurgeon consult. He examined her on three subsequent occasions and referred her to an orthopedic surgeon. The orthopedic surgeon diagnosed cauda equina syndrome. Plaintiff settled her workers compensation case and sued Dr. Hewitt. The trial court's decision that Hewitt was a statutory employee of Mercy's and could not be sued was upheld on appeal.

II.

KANSAS STATUTES

A.	SB 306 relates to nuclear materials and provides that fees may be assessed for radiation protection services. The act covers medical materials with a maximum annual fee of $5,5000; x-ray machines will have a base annual registration fee of $200 plus a registration fee for each x-ray tube at a facility of $50.

B.	SB 343 repeals the state's hospital conversion law passed in 2003 and implements a procedure for substituted consent for research protocols.

C.	SB 418 provides that the Department of Health and Environment will implement a state-wide birth defects information system to collect information relating to congenital anomalies, stillbirths or abnormal conditions of newborns. KDHE has authority to require mandatory reporting of such conditions.

D.	SB 529 amends the laws governing physical therapists to provide that physician extenders may order physical therapy.

E.	HB 2647 creates a Kansas bioscience authority and provides for its powers and duties, creates the Kansas center for entrepreneurship, provides tax credits for donations in the Kansas community entrepreneurship fund and for certain investments.

F.	HB 2698 provides for the regulation and licensing of radiologic technologists under the auspices of the Board of Healing Arts.

G.	HB 2725 permits a board of county commissioners to pass a resolution requiring inmates in county jails to pay the county a fee for housing and maintaining the inmate.

H.	HB 2760 changes the definition of critical access hospital to permit inclusion of a psychiatric unit, and/or rehabilitation unit not to exceed ten beds. These additional beds are not subject to the length of stay restriction or included in the bed limit. The statute also amends the University of Kansas Hospital Authority to clarify the governing board membership process.

I.	HB 2813 enables the Board to apply to the court for appointment of a custodian of a physician's health care records when the provider has abandoned the records, abandoned his practice, has had his license suspended or revoked, dissolved a business entity and has refused patient access to the records or the patient is unable to access his records , or the provider has died and the patient is unable to access his records. The bill also clarifies the physician assistant licensure act by providing that it governs the direction and supervision of physician assistants and limits the number of physician assistants that may be supervised by one physician to two full time equivalents; makes changes to the podiatry act; makes changes to the physical therapy act.

III.

STATE REGULATORY CHANGES

A.	Naturopathy is now a registered profession under the Board of Healing Arts. K.A.R. 100-72-1.

B.	When licensees state that they are board certified, they must also identify the board providing the certification. K.A.R. 100-22-4.

C.	There are changes to the regulations governing respiratory therapists relating to unprofessional conduct; for occupational therapists relating to fees and licensure; and for physical therapists relating to registration. K.A.R. 100-55-5; K.A.R. 100-54-2 et seq; K.A.R. 100-29-9.

D.	There have been changes to the regulations for nurse aide training in adult care homes and new regulations relating to medication aide qualifications and training in adult care homes. K.A.R. 28-39-164; K.A.R. 28-39-169a et seq.

E.	Home health agency license regulations have been amended and there are new regulations for home health aide training. K.A.R. 28-51-100; K.A.R. 28-51-113 et seq.

IV.

FEDERAL STATUTORY AND REGULATORY CHANGES

Medicare Prescription Drug, Improvement & Modernization Act

1. Signed by President Bush on December 8, 2003, the MMA made significant changes to Medicare impacting beneficiaries and providers. The Act creates Part D containing prescription drug benefits for Medicare participants consisting of a voluntary prescription drug benefit program utilizing a drug discount card as an interim measure, and permanent benefits. The regulations for the drug discount card program were published in the December 15, 2003 Federal Register. There are specific eligibility standards for participation in both programs. The permanent program will cover insulin, some biological products and medically necessary drugs that are not currently covered and will provide limited insurance type coverage for prescription drugs with subsidies for low income beneficiaries. The MMA replaces Medicare+Choice program with Medicare Advantage which is a similar program but with more plan options at the local and regional level. The MMA provides for Health Savings Accounts that are portable and tax free for qualified participants. The Act also has provisions for potentially allowing access to Canadian pharmaceuticals. For providers, the MMA contains numerous provisions that will impact practice and reimbursement. Hospitals will receive the full market basket payment increase in 2004, and in the future if the hospital participates in quality reporting. The MMA eliminates a higher conversion rate for urban hospitals and allows wage index adjustments for worker migration to counties with higher wage indices. Payments to rural providers will generally be increased under the MMA and rural providers will receive the benefit of a anti-kickback safe harbor. Critical access hospitals will see increased reimbursement and may increase certain beds. Some hospital outpatient reimbursements are modified, for example reduced payment for outpatient drugs, and cost based reimbursement for rural hospital clinical diagnostic lab services who qualify. Physician reassignment rules are clarified to provide that the physician can reassign to any entity that he contracts with if the contract meets certain conditions. The MMA creates an EMTALA Technical Advisory Group, requires payment for emergency room services to be based upon the information known to the physician at the time of service, and requires notification of closure of EMTALA investigations. Under the MMA, all hospitals must comply with OSHA blood-borne pathogen standards. There is a moratorium on building speciality hospitals. There are grants for cancer hospitals, a rural community hospital demonstration project, funding for new technologies and a mandated GAO study on appropriate levels and distribution of the payment provisions written into the Act. There are also provisions for regulatory relief and contracting reform, including a provision that permits providers to rely upon agency guidance and a provision for the GAO to study the advisory opinion process. Regulations are to follow as soon as possible.

Final Emtala Regulations

1. In an attempt to clarify the Emergency Medical Treatment and Labor Act, the Center for Medicare and Medicaid Services Issued new Regulations. 68 FED. Reg. 53223. The regulations combine prior guidance provided by CMS into regulatory format and attempt to clarify past guidance. CMS states that interpretive guidelines are forthcoming. The new regulations inject a new concept into the present EMTALA framework B a dedicated emergency department. The regulations detail how patients who present at the dedicated emergency department or at other hospital locations (including ambulance based patients and patients at off-campus departments) are to be treated. The rules discuss hospital owned ambulances and the circumstances that exempt application of the regulations. The regulations also provide that if it is obvious to a layperson that an individual needs emergency treatment, the patient must be screened. Individuals who come to the emergency department without emergency conditions are also discussed. The regulations clarify that inpatients and outpatients are governed by the Medicare Conditions of Participation, rather than the EMTALA. The rules governing on-call physicians are set forth to make it clear that hospitals must maintain the list in a manner that best meets the needs of hospital patients. The regulations prohibit obtaining preauthorization prior to screening, but do permit normal registration processes when they do not delay screening. Finally, the regulations suspend application of EMTALA during national emergencies.

Stark II

1. March 26, 2004 the interim final rule governing what are known as the Stark II regulations was published. 69 Fed. Reg. 16054. On April 16, 2004, corrections to the March regulations were published in the Federal Register. 69 Fed. Reg. 17933. Comments will be accepted until June, 24, 2004 and the regulations will go into effect on July 24, 2002. The new rules clarify the indirect financial relationship and the indirect compensation analysis. Physician investment interests in publicly traded securities and mutual funds are recognized, along with ownership in rural providers. The rural ownership regulation conforms to the MMA. The regulations clarify the in-office services exception and group practice definition. They permit percentage based compensation arrangements and increase the flexibility of the exception for academic medical centers. There is an analytical format for fair market value and set in advance compensation determinations. There are changes to the group practice definition and in office ancillary services exception. The personal service arrangement exception has been revised adding extra requirements for referencing other contracts and hiring of employees rather than independent contractors to assist with contract performance. There are also interpretations for the public company, rural provider, isolated transaction, space and equipment rentals, employment, and recruitment exceptions. New exceptions for Medicare managed care plans, professional courtesy, compliance lapses, charitable contributions, retention payments and technology have been added. Reporting requirements have been clarified as well.

HIPPA

1. Law v. Zuckerman, 2004 U.S. Dist. Lexis 3755 (D. Md.)

Defense counsel's ex parte contacts with a treating physician were governed by HIPAA's privacy regulations. The court denied the plaintiff's request to prohibit further ex parte contacts.