Goodell, Stratton, Edmonds, & Palmer--2002 KANSAS BAR ASSOCIATION CASE LAW UPDATE

2002 KANSAS BAR ASSOCIATION
ANNUAL SURVEY
CASE LAW UPDATE - HEALTH LAW

Bench Trials

Maasen v. Zwibelman, 2001 U.S. Dist. LEXIS 8349 (D. Kan.)

This medical negligence case was tried to the Court. Plaintiff had symptoms of preclampsia (severe headache and high blood pressure). Defendant ordered Imitrex and Procardia. Plaintiff then had a stroke. The Court found plaintiff failed to establish causation and ruled for defendant. Plaintiff moved for a new trial. The Court, in denying the motion, held that it simply was not persuaded by the evidence and that plaintiff failed to carry her burden on this element of her claim. The Court as the trier of fact stated it had the exclusive function to determine weight, credibility, to draw inferences, and resolve conflicts in evidence.

Civil Procedure B Amendment

Lemons v. Board of County Commissioners of Brown County, 2002 U.S. Dist. LEXIS 1006 (D. Kan.)

The Court allowed plaintiffs to amend their complaint to more accurately set forth the factual and legal basis for their claims and to accurately name the real parties in interest. Certain defendants opposed the addition of an EMTALA claim. The Court held that the addition of the EMTALA claim would not be futile even though it did just restate the negligence allegations. The Court also permitted amendment to allow plaintiff to name the personal representative of the deceased patient as the proper party to prosecute the survival action. This claim, according to the Court, related back to the original complaint and was not barred by the statute of limitations. The Court also allowed amendment to correct a defendant's name. The defendant claimed he was not named in the original complaint or first amended complaint and that the claim against him was time barred. Again, the Court said the amendment related back, noting the defendant acted as if he were properly named.

Civil Procedure B Joinder

Lewis v. Cimarron Valley Railroad, 162 F. Supp. 2d 1220 (D. Kan. 2001)

Plaintiff sued the railroad under the FELA for not providing a safe work environment. The railroad sued the physician on a third-party complaint alleging that part of plaintiff's damages were caused by the physician's negligence. The Court denied the physician's motion to dismiss based on the physician's argument that Kansas law does not permit a physician to be joined in a FELA case. The Court held that Kansas law under a contribution or comparative implied indemnity claim permitted joinder; that comparative fault should be determined in one action; that joinder was appropriate under Rule 14(a); and that the Court had supplemental jurisdiction because the case derived from common facts.

Civil Procedure B Jurisdiction

Birdsong v. West Glen Endoscopy Center, 176 F. Supp. 2d 1245 (D. Kan. 2001)

Defendant's motion to dismiss for lack of subject matter jurisdiction was granted. In so deciding, the Court discussed the differences in standards between Rule 12(b)(1) and Rule 12(b)(6) motions. Subject matter jurisdiction was premised upon defendant not being a Kansas resident. Defendant was organized under Tennessee law as a limited liability company. As an unincorporated entity, its citizenship is determined by the citizenship of its members. Thus, neither the state of organization nor place of principal business activity was determinative. One of the two members of defendant's LLC was a Kansas LLC whose members were all Kansas residents. Since the Kansas LLC was a Kansas citizen, the defendant was a Kansas citizen and there was no diversity jurisdiction.

Civil Procedure - Place of Trial

Riley v. Stormont-Vail HealthCare, 2001 U.S. Dist. LEXIS 12984 (D. Kan.)

Plaintiff claimed that she was injured because of an improper emergency room examination. Plaintiff filed suit in Shawnee County District Court, then filed suit in federal court adding an EMTALA claim. Plaintiff chose Kansas City as the place of trial, and defendants moved to have trial in Topeka. The Court found that since all of plaintiff's witnesses were from Topeka and none from Kansas City that Topeka would be the most convenient location, particularly since plaintiff resided in Topeka. The Court also found that plaintiff's argument she could not get a fair trial in Topeka was speculative.

Civil Procedure B Response Times

Parker v. Central Kansas Medical Center, 2002 U.S. Dist. LEXIS 2849 (D. Kan.)

Plaintiff sued under EMTALA and for medical negligence. Defendant filed for summary judgment and to strike portions of a physician's affidavit. Plaintiff requested more time and the Court allowed plaintiff ten days after it ruled on the motion to strike. The Court struck the affidavit and after ten days passed, plaintiff requested reconsideration of that decision. The Court denied the motion for reconsideration on December 12, 2001, and ordered the summary judgment response be filed in ten days, or defendant's motion would be granted as uncontested. On December 31, 2001, plaintiff filed her response. Plaintiff claimed it was timely filed under the three additional days rule of Rule 6(e). The Court held the rule applied only to responses due within a specified time frame after service and there is no three additional days for responses due within a specified time after filing.

Civil Procedure B Voluntary Dismissal

Bain v. Artzer, ___ Kan. ____, 25 P.3d 136 (2001)

The trial Court granted plaintiff's motion for voluntary dismissal with conditions after trial had begun and testimony revealed her expert did not meet the 50% rule and defendant had moved for directed verdict. The Appellate Court held that it did not have jurisdiction because a voluntary dismissal was not a final order.

Civil Procedure B Work Product

American Casualty Co. of Reading, PA v. Healthcare Indemnity, Inc., 2002 U.S. Dist. LEXIS 952 (D. Kan.)

Plaintiff (CNA) and defendant (HCII) both insured a nurse employed by Wesley Medical Center. CNA insured the nurse under her individual policy. HCII insured her through Wesley. The nurse was sued and defendant contended plaintiff agreed to contribute 25% of indemnity and defense costs. Plaintiff disagreed and sued for declaratory judgment. CNA moved to compel production of HCII's claim file in the underlying lawsuit and HCII claimed work product. Defendant argued the entire claim file was protected. The magistrate disagreed, finding the selection and grouping of information does not transform discoverable documents into work product. In addressing individual documents, the Court looked to whether they were actually drafted by defendant or defendant's representative for defendant or for defendant's representative. Finding that many of the file's documents were not, the Court ordered those documents produced. The Court then looked at whether each document was prepared in anticipation of litigation. The Court found that there were two elements to this "causation" requirement B preparation for litigation and reasonable time frame. The "motivating purpose" for the document's creation governs the first element, and the issue of litigation being real and imminent governs the second. The Court held some of the documents met this criteria. The Court went on to address waiver of the privilege finding that defendant had disclosed documents in a manner likely to be discovered by the opposing party (pleadings and correspondence in the underlying case). Next, the Court looked at whether plaintiff showed substantial need of the documents to prepare their case and that it could not, without undue hardship, obtain the substantial equivalent by other means. The Court found plaintiff did not meet its burden on this issue, but took the opportunity to discuss fact and opinion work product.

Consumer Protection

Stovall v. Confirmed.com, ___ Kan. ___, ___ P.3d ___ No. 87,177 (1-25-02)

A non-resident physician was enjoined from prescribing or dispensing prescription medicine within Kansas, but his acts were not unconscionable under the KCPA. The State appealed arguing that a $75 charge for an online medical examination, prescribing Viagra online, and dispensing Viagra to a minor without parental consultation was unconscionable. The Court of Appeals upheld the trial court finding that conduct which does not involve advertising techniques, contract terms, debt obligation, or limitations of warranties is not the type of conduct intended to be considered unconscionable.

Damages

Schwartz v. Abay, 2002 Kan. App. Lexis 326

The jury awarded plaintiff $76,200 for damages emanating from a spinal fusion. Included in the amount was $40,000 for future medical expenses which the trial court set aside on a motion for judgment notwithstanding the verdict. The plaintiff appealed and the Court of Appeals held that there was no evidence presented upon which a future damage award could have been based. While expert testimony on damages was not necessary, according to the Court, pre-existing conditions and other factors can complicate the damage issue and then an expert is required to distinguish damages from the pre-existing condition or other factors and damages from the negligence.

Employment

Craven v. University of Colorado Hospital Authority, 260 F.3d 1218 (10th Cir. 2001)

Plaintiff was the hospital manager for risk and safety. She became involved in disputes over internal air quality, infectious waste, and radiation safety. Plaintiff claimed she was terminated in retaliation for speaking out on these issues in violation of public policy and her First Amendment rights. Defendant claimed plaintiff was confrontational, inflexible, consistently demeaning to personnel, that she failed to appropriately consult with her supervisor, and that she ignored supervisory direction. Defendant contended that the speech did not support a retaliatory discharge claim.

The Court granted defendant summary judgment on plaintiff's public policy claim and a jury found for defendant on the remaining claims. The Tenth Circuit upheld the district court's and the jury's decisions. In reviewing plaintiff's claims of protected speech, the Appellate Court found that plaintiff was speaking as an employee, not a citizen, when she debated with her supervisor about whether a presentation on bio-hazardous waste should be made to a management committee and this speech was not protected. Plaintiff's speech on air quality and radiation was unprotected because it did not outweigh the interest of the state as an employer in promoting the efficiency of public services. Plaintiff's public policy claim was properly disposed of before trial because there was only a tenuous relationship between plaintiff's discharge and the provision of medical services to the public; therefore, there was no waiver under the governmental immunity act.

King v. Hillcrest Health Center, 264 F.3d 1271 (10th Cir. 2001)

King sued Hillcrest claiming he was terminated in retaliation for reporting Medicare and Medicaid fraud. The case settled. During the pendency of the employment, King filed a qui tam action alleging false claims act violations. The United States did not intervene. The trial court dismissed on res judicata finding the employment case and FCA case were identical. The United States filed an amicus brief on plaintiff's motion to reconsider. It also notified the Court that King did not provide information on his FCA allegations prior to suit. The District Court vacated, but dismissed for lack of subject matter jurisdiction. The Tenth Circuit agreed and said that King was not an original source because he did not provide the information upon which the FCA case was filed before filing his employment case. The employment case constituted public disclosure.

Nieto v. Kapoor, 268 F.3d 1208 (10th Cir. 2001)

Defendant was a medical director of a state hospital radiation oncology department. Defendant was not an employee, but a contractor with medical and administrative duties. A group of employees sued him for deprivation of First Amendment rights and infliction of emotional distress. The defendant made extensive and repeated racist and sexist remarks. He also displayed aggressive physical conduct such as throwing books at staff members. At a bench trial, damages of $3,750,000 were awarded. On appeal, the Tenth Circuit held that Kapoor was a state actor under ' 1983 because he was obligated by contract to provide patient care and to supervise staff, that staff could not choose to whom they would answer, and Kapoor was the only person staff could look to for orders and training. The Court said that a state could not escape its constitutional obligations simply by contracting with a private person to supervise employees. The Court also found a connection between the state's grant of authority to Kapoor and his ability to harass employees.

Turnbull v. Topeka State Hospital, 255 F.3d 1238 (10th Cir. 2001)

Plaintiff, a psychologist, sued a state hospital under Title VII alleging a sexually hostile work environment. Patients would sexually act out, creating problems at the hospital. According to plaintiff, this behavior was viewed by the hospital as a treatment issue. Employees signed job descriptions which disclosed the risk of assault. Understaffing led to additional safety concerns and plaintiff complained about inadequate safety measures. A patient sexually assaulted plaintiff and threatened to kill her. At trial, defendant moved for judgment as a matter of law. The Court let two issues go to the jury, then granted the motion. The Tenth Circuit reversed, finding that an employer is liable if it had actual or constructive knowledge of the harassment and did not respond with adequate protective measures. It found the real issue to be the employer's response to the plaintiff's complaints.

EMTALA

Nelson v. Calvin, 2001 U.S. Dist. LEXIS 9906 (D. Kan.)

Plaintiffs sued a hospital and physicians for malpractice and did not clearly designate their EMTALA claims as being applicable only to the hospital. Defendant physicians moved to dismiss the EMTALA claims and to have the Court decline supplemental jurisdiction. The Court held that the EMTALA claims did not apply to the physicians but maintained supplemental jurisdiction finding the malpractice claim derived from the same set of facts as the EMTALA claim.

Expert Testimony

George v. Pauly, ____ Kan. App. 2d _____, _____ P.2d _____ No. 84,886 (4-13-02)

Defendant was granted summary judgment on claims he failed to diagnose and treat Plaintiff's son for Hirschsprung's disease. Plaintiff's expert, during his discovery deposition, did not firmly testify on causation. In a trial deposition, the expert opined the disease was treatable and treatment was successful if the disease was detected early. The trial court held that the additional testimony could not be used based on the witness's lack of qualifications (the expert was not a surgeon and could not testify on causation resulting from delayed diagnosis of a surgical condition). The Appellate Court upheld the exclusion on other grounds B the change in testimony. The trial court also prohibited a treating physician from giving expert causation testimony because he was not designated as an expert. The Court of Appeals disagreed. It found that in discovery responses, the plaintiffs informed defendants that the physician would give causation testimony. The Court further found that the physician's statements during deposition that he would not testify on causation was unreliable since the physician was not a lawyer or judge and could not properly characterize his testimony. The Court of Appeals further found that depositions by other treaters provided enough evidence of a causal connection that summary judgment should not have been granted.

Kernke v. Menninger Clinic, 2002 U.S. Dist. Lexis 3487 (D. Kan.)

On a motion for the Court to determine reasonable expert witness fees, the Court held that time spent with the hiring attorney to prepare for deposition is deposition preparation time which the opposing party must pay. The Court also ruled that 16 hours of preparation time was unreasonable and reduced the compensable time to four hours.

Meyer v. Gibson, 2001 U.S. App. LEXIS 18544 (10th Cir.)(unpublished)

The trial court granted defendant summary judgment on plaintiff's claims that Dr. Gibson failed to monitor plaintiff's decedent's diabetic condition while administering Laetrile leading to her death. The Tenth Circuit reversed. The Tenth Circuit acknowledged that expert testimony is necessary to establish causation in a medical malpractice case. Acknowledging that plaintiff failed to list trial witnesses on time and that her summary judgment response was late, the Court found that an order from the Oklahoma State Board of Medical Licensure and Supervision concluding Dr. Gibson failed to monitor and control the deceased patient's diabetes was sufficient expert evidence to establish a prima facie case.

Nalder v. West Park Hospital, 254 F. 3d 1168 (10th Cir. 2001)

Plaintiffs sued defendant hospital and physicians after their son sustained brain damage near the time of birth. The jury returned a verdict for defendants. Plaintiffs claimed error because the Court struck two of their experts and allowed a defense expert to testify to an opinion not disclosed before trial. The Tenth Circuit affirmed. Plaintiffs sought to admit expert testimony from an obstetrician and a perinatologist, and from a neonatologist and a pediatrician. Plaintiffs had redesignated their experts' areas of testimony to avoid duplication. The Court reasoned that since all perinatologists are obstetricians, and all neonatologists are pediatricians that plaintiffs could only have one expert from each specialty to avoid unnecessary duplication. The Court of Appeals voiced concern because the duplication appeared to be only in the experts' qualifications and plaintiffs had taken care to avoid duplication of subject matter. It also troubled the Appellate Court that defendants were able to call a perinatologist and neonatologist on causation even though defendants included an obstetrician and pediatrician who testified about standard of care, so defendants were not forced to choose between standard of care and causation experts as plaintiffs were. Still, the Tenth Circuit affirmed, finding the rulings were not an abuse of discretion and plaintiffs did not establish prejudice.

The Tenth Circuit also upheld the trial court's peer review privilege decision. The trial court found that notes taken at a quality assurance meeting were privileged as "reports, findings, proceedings and data" of a "professional standards review organization." The Court of Appeals also noted that under Wyoming law, documents submitted to the committee were not privileged.

Parker v. Central Kansas Medical Center, 178 F. Supp. 2d 1205 (D. Kan. 2001)

Plaintiff asserted a medical malpractice claim against a hospital and physician, and an EMTALA claim against the hospital. Plaintiff was injured while riding her horse. She went to her physician's office for treatment and was then referred to the hospital for additional treatment. Plaintiff was taken directly to a room. Her physician and the surgeon who was consulted prior to the hospital admission had a dispute over where the patient would be examined B in her room or the emergency department. The surgeon then refused to treat the plaintiff. The patient's mother called the surgeon to ask him to reconsider and he apparently replied he would, but only if all her records were turned over. The plaintiff's doctor then informed the plaintiff she could do this or go elsewhere. Plaintiff chose elsewhere. At the second hospital, she had two surgeries, developed an infection, and was transferred to a third hospital.

In responding to defendants' motion for summary judgment, plaintiff submitted an affidavit of her treating physician. Upon reading the affidavit, hospital counsel contacted the physician's counsel. The physician subsequently disavowed much of the affidavit. Plaintiff claimed witness intimidation and spoilation of evidence. The Court found that as a treater, the physician was limited to testimony based on personal knowledge and could not testify on matters beyond the scope of her treatment. Portions of the affidavit were struck, and plaintiff was denied additional time to secure new expert testimony.

Plaintiff asked for reconsideration of the Court's order striking portions of her treating physician's affidavit because they were undisclosed expert opinions. The motion was denied. In determining summary judgment, the Court held that because the treating physician's opinions were struck, plaintiff did not have expert testimony to go forward and summary judgment was granted on the negligence claim. Plaintiff also asserted an intentional infliction of emotional harm case. The Court found that the conduct of asking plaintiff to have her records turned over was not outrageous considering the fact plaintiff needed surgery. Further, getting extremely upset was insufficient to demonstrate extreme emotional distress. Finally, summary judgment was delayed on the EMTALA claim for further briefing.

Starling v. Union Pacific Railroad, 203 FRD 468 (D. Kan. 2001)

Defendants sought to exclude testimony of two physicians and a social worker in this FELA case. Plaintiff included these treaters in his expert witness disclosures. The Court ruled that the disclosures did not comply with Rule 26(a)(2)(B). In responding to defendant's motion, plaintiff claimed all three were treaters. The Court held that the scope of the proposed testimony is the determinative factor in determining whether the witness is a treater exempt from the 26(a)(2)(B) disclosure requirements. A treater is not specially retained and the testimony is limited to care and treatment (facts made known to the witness during the course of care and treatment). This can include the cause, nature, and extent of damages. This standard applied even when the treater may have been provided other documents by counsel, but testimony about reports from other experts who had been withdrawn was not permissible.

Fiduciary Duty

Kernke v. Menninger Clinic, 172 F. Supp. 2d 1347 (D. Kan. 2001)

Plaintiffs' decedent eloped from a psychiatric hospital and was later found dead. Plaintiffs sued the hospital and a pharmaceutical company. The Court granted summary judgment for false imprisonment, intentional infliction of emotional distress, fraudulent misrepresentation, and breach of fiduciary duty. The Court also struck plaintiffs' damage claim for increased tax liability, but denied summary judgment on the medical negligence claims, punitive damage claims, and refused to strike an affidavit of a treating physician. Summary judgment was granted on the false imprisonment claim based on the one-year limitations period. The claims for intentional infliction of emotional distress, fraudulent misrepresentation, breach of fiduciary duty, and intentional infliction of emotional distress were based on the same core set of facts as the malpractice claim and were therefore deemed to be just a reclassification of those claims and were dismissed. On the tax liability issue, plaintiffs argued that had decedent lived, his estate would have saved money from exemptions under the Taxpayer Relief Act of 1997. The Court ruled this too speculative to allow. The Court allowed plaintiffs' punitive damage claim to go forward based upon plaintiffs' claims of wanton conduct. Finally, the Court refused to strike the affidavit of a treating physician finding it not inconsistent with her deposition.

Fraud and Abuse

United States v. Daniels, 163 F. Supp. 2d 1288 (D. Kan. 2001)

Daniels was charged with health care fraud, mail fraud, and perjury. The government moved for a determination of whether Defendant's counsel had a conflict of interest. The Court conducted an in camera inspection of documents and in camera interviews with the defendant and counsel. Several victims identified in the indictment had sued the defendant for medical negligence. Counsel represented defendant in those cases and had also entered an appearance in the criminal case. The government contended a conflict was present because the insurer was paying the attorney fees in the malpractice cases and because counsel would have access to information in the civil proceedings that could be used in the criminal proceedings. The Court reviewed Rule 1.7(6) of the Kansas Rules of Professional Responsibility and found an actual conflict would be present if the attorney was forced to make choices that advanced other interests to the detriment of the client. The third-party payor factors were mitigated because there were also two other independent attorneys representing the defendant. Also, the insurer was not a co-defendant and was not an anonymous party which would enhance the risk factors. The insurer understood that retained counsel's loyalty is to the client. The Court noted that counsel had a clear understanding of his ethical obligations as well. The Court also found that counsel would just have to avoid documents discovered in the civil cases that could not be admitted in the criminal case.

United States v. LaHue, 261 F.3d 993, (10th Cir. 2001) (cert. denied)

Defendants Robert LaHue, Ronald LaHue, and Don Anderson were convicted under the Medicare Antikickback Act. The District Court denied their motion for a new trial. The Tenth Circuit affirmed. The appeal consisted of four issues including whether the jury instructions criminalized innocent conduct by adopting a "one purpose" test. Defendants argued that a person should not be convicted of an antikickback violation when the offer, payment, solicitation, or receipt of remuneration was motivated merely "in part" to induce or in return for referrals. They argued that conviction was only appropriate when motivation for inducement or in return for referrals was the primary purpose of the transaction. The Tenth Circuit, joining a minority of the circuits, upheld the instruction finding it was properly based on the statutory language. The Tenth Circuit found that the one purpose interpretation was not improperly vague and in fact noted that the trial evidence demonstrated that defendants by their actions knew their conduct (a pay-for-patients scheme) was prohibited. Defendants also argued that this interpretation of the act encouraged arbitrary enforcement rendering it vague. The Circuit Court of Appeals found this argument contrary to the law and to the evidence as it applied to the defendants. The Court also held that the District Court did not erroneously admit over sixty documents under Rule 801(d)(2)(E), and the District Court properly concluded that the word "conspiracy" in the rule also included lawful common plans. Defendants claimed variances between the indictments and trial evidence prejudiced their right to a fair trial. The variances included the government's failure to provide sufficient evidence to show any defendant but the LaHue's participated in a conspiracy extending to six other hospitals, and the failure of proof as to the lawyer defendants. The issue whether these same variances prejudiced a co-defendant was decided in U.S. v. McClatchey, 217 F.3d 823 (10th Cir. 2001)(In McClatchey the Court of Appeals reversed the trial court's grant of a new trial on this same argument). The law of the case doctrine therefore governed the variance issue. Since defendants' counsel argued the acquittal of the other defendants on closing, the invited error doctrine also applied. Finally, the Tenth Circuit did not find error in the District Court's decision not to grant use immunity to certain witnesses.

Jury Instructions

Domann v. Vigil, 261 F.3d 980 (10th Cir. 2001)

Plaintiff's placenta would not spontaneously expel after the delivery of her child. Defendant took plaintiff to the operating room and eventually performed a hysterectomy. During surgery, plaintiff suffered an unexpected cardiac arrest prior to the hysterectomy, plus had a high level of blood loss. She was later diagnosed with an amniotic fluid emboli and systemic inflammatory response syndrome. Plaintiff recovered with only peripheral nerve impairment. The jury found for defendant and plaintiff appealed the denial of her motion for new trial on the grounds the verdict was inconsistent and incomplete because the jury did not answer all the special questions on the verdict form. The Court held that failure to answer some questions does not vitiate an otherwise unanimous verdict where the unanimous answers to the verdict conclusively dispose of the case. In this case, the jury did answer "no" to the question of proximate cause.

Hibbert v. Ransdell, ___ Kan. App. 2d ___, 26 P.3d 721 (2001)

Plaintiff appealed a verdict for defendant. Plaintiff sued the physician for surgical complications following removal of an ovarian cyst. Prior to surgery, defendant's nurse discussed complications and showed plaintiff a video of the procedure. Plaintiff contended the use of the "physician's judgment" instruction (PIK Civ. 3d 123.11) was erroneous. The Court held that it found merit in the plaintiff's argument that the instruction could confuse the jury into thinking the standard of care is dependent on the physician's thoughts rather than conduct and that all that would be required for the physician to escape liability would be for him to use his best judgment. The Court noted other jurisdictions that had abandoned the instruction. The Court stated that the instruction should always be used with an objective standard of care instruction like PIK Civ. 3d 123.12. However, giving the instruction was not erroneous. During trial, plaintiff sought to amend the pretrial order to allow her to argue lack of informed consent. The plaintiff argued that the issue of informed consent was tried by implication. Avoiding that ground, the Court of Appeals held that K.S.A. 60-215(b) does not require the trial court to allow amendment to the pretrial order, but is permissive. Further, under the facts it would have been unjust to the defendant to add a new cause of action after defendant had testified.

Learned Intermediary Rule

Kernke v. Menninger Clinic, 172 F. Supp. 2d 1347 (D. Kan. 2001)

Summary judgment was granted to a pharmaceutical company on plaintiffs' claim that it improperly included plaintiffs' decedent in a clinical trial and improperly conducted and supervised the trial. The Court held that the learned intermediary doctrine protected the company from the plaintiffs' claims that it failed to warn of risks inherent in the study. The Court further found that adequate warning was provided.

Licensure

Reese v. Board of Healing Arts, 2001 Kan. App. Lexis 1215

The physician appealed the District Court's affirmation of the Board's revocation of his license. The District Court was affirmed on appeal. The Appellate Court held that ambiguities, inconsistencies, and conflicts in witness statements do not prevent them from being substantial evidence. The Court also held there was no bias by the presiding officer because he was advised by the Board's general counsel when the Board's litigation counsel prosecuted the case, or because he refused to release hearing audiotapes to the physician. The physician was not denied due process because the Board met in executive session and the physician was not provided with a transcript. The use of a videotaped deposition did not deny the physician due process since his counsel was present. Further, the physician was not denied a fair hearing by the admission of hearsay, because the presiding officer viewed exhibits prior to the hearing or because he had declined the opportunity to present a DNA sample to prove his innocence.

Medical Records

Ingram v. Mutual of Omaha, 170 F. Supp. 2d 901 (W.D. Mo. 2001)

Plaintiff was identified as a witness in a Kansas case and defense counsel subpoenaed her medical records from Mutual of Omaha, her health insurer. The Kansas court denied motions to quash the subpoena but notice was not provided to Ingram or Mutual of Omaha. The Kansas court held the records were discoverable. Ingram sued Mutual of Omaha alleging breach of fiduciary duty and breach of physician-patient privilege because it did not move to quash the subpoena. The Court found Missouri law applicable and extended a fiduciary duty of confidentiality to insurance companies. The Court refused to extend the physician-patient privilege. The Court also found that since the subpoena provided information on objecting, Mutual could have done so.

Medical Staff

Donnell v. HCA Health Services of Kansas, Inc., ___ Kan. App. 2d ___, 28 P.3d 420 (2001)

Dr. Donnell was terminated after a patient death was reviewed by the executive committee. The review resulted in a Level IV finding and led to a review of all Dr. Donnell's charts to see whether a pattern existed. Dr. Donnell was not notified of the chart review. A second peer review process resulted in suspension of Dr. Donnell's privileges. He was asked to have a physical and neurological evaluation. The evaluation (which did not include a neurological exam) showed no deficiencies. He was asked to get a neurological examination. His employment and privileges continued on suspension. Dr. Donnell filed suit alleging negligent investigation, then amended to add tortious interference with business relationships, libel, slander, and fraud. He claimed punitive damages. The trial court found that expert testimony was not necessary and conceded the investigation was sloppy but granted summary judgment for defendants finding just cause for the termination and finding immunity. Defendants appealed the finding that plaintiff didn't need expert testimony, and plaintiff appealed the summary judgment decision. The Court of Appeals noted that defendants would generally be immune under the Health Care Quality Improvement Act because the peer review group provided adequate due process and the action was taken with the reasonable belief it furthered quality health care, but that the HCQIA did not apply to this case. Instead, it found immunity under K.S.A. 65-442, 65-2898(b) and 65-4909(a). The Court said even if the process was sloppy and negligent, the immunity was based upon good faith. The cross appeal was undecided.

Ferraro v. Board of Trustees, Labette County Medical Center, 2001 U.S. App. Lexis 26283 (10th Cir.)(unpublished)

A nurse anesthetist challenged his suspension on procedural due process grounds. The Tenth Circuit affirmed summary judgment for the hospital. The nurse argued that because the hospital's post-termination process did not include a mechanism to recover back pay, it denied him due process. The Court held that there was no property interest in back pay. The nurse anesthetist was not an employee, but was a fee for service provider. The hospital could not force the nurse to provide services and patients were free to choose among various nurse anesthetists. Staff privileges only provide a venue and opportunity to earn income and these rights were fully restored after the hospital's post-termination processes were completed.

Kharidi v. Hays Medical Center, 2001 Kan. App. Lexis 694

A physician, in answering a hospital questionnaire (with a release) for plaintiff to determine staff privileges, did not give the plaintiff a glowing recommendation. The hospital was granted summary judgment on plaintiff's claims of libel. The Court affirmed, adopting the trial court decision and calling plaintiff's action groundless and without merit.

Medicaid Benefits

Harris v. Owens, 264 F.3d 1282 (10th Cir. 2001)

Mr. Harris was a Medicaid recipient with smoking related illnesses. He sued to recover a portion of the state tobacco settlement proceeds claiming he had assigned his right to sue tobacco companies to the state. The trial court dismissed on Eleventh Amendment immunity. The Court of Appeals upheld the dismissal on other grounds, rejecting immunity because the relief requested by plaintiff was prospective, and the claim did not implicate special sovereignty issues. Instead, the Appellate Court found Harris failed to state a claim for relief because an amendment to the Medicaid laws permitted states to utilize settlement proceeds.

Medicare Payments

AllCare Home Health v. Shalala, 278 F.3d 1087 (10th Cir. 2001)

The Provider Reimbursement Review Board disallowed $60,000 in year-end bonus payments to a home health agency's co-owners, finding the bonus payments were not returns on equity. The Tenth Circuit agreed stating that the PRRB decision was not arbitrary or capricious. The owners did not have a well-defined incentive plan with clear standards that would properly allow the bonuses as compensation. The bonuses were paid only after the owners determined allowable costs exceeded allowable claims. Moreover, Medicare prohibits owners of providers from receiving profits and payments representing a return on equity capital are not compensation and are not allowable as a reimbursable cost item.

Negligence Per Se

English v. Via Christi Medical Center, 2001 Kan. App. Lexis 925

Plaintiff claimed injuries caused by tripping over a chair used to prop open a door at the hospital and was awarded damages. Over defendant's objection, sections of the Uniform Fire Code and Uniform Building Codes were admitted into evidence. The Court of Appeals found no error finding that because a negligence per se instruction was not given, plaintiff did not have to demonstrate an individual right of action under the regulations.

Peer Review

Nelson v. Calvin, No. 01-2021-CM (D. Kan. 1-30-02)(unpublished)

Plaintiff moved to compel peer review and risk management data from defendant hospital and physician's correspondence to and from KFMC. Based upon federal regulations governing PROs, the KFMC materials were protected from discovery under federal law. Under state law, the Court determined KFMC, not the physician, was the holder of the privilege and therefore the objections based on state law were overruled. The Court deemed the hospital as the holder of the privilege for documents it generated for its internal peer review. The documents consisted of interviews, a root cause analysis and a medical records flow chart. The Court held the documents were covered under the peer review and risk management privileges. The Court then addressed Adams. It said that it was not convinced that an in camera inspection was automatically warranted and that the privilege log should provide sufficient detail for the Court to decide the issues. The Court further said:

"In this case, defendant SRHC has already provided the Court with an adequate log to establish its claims of privilege and it seems fair, at this point, to shift the burden to plaintiffs to devote the time and resources to use their best efforts to explain to the Court why the Court's holding in Adams warrants production.

"Adams did not draw a bright line for determining when peer review and risk management materials must be disclosed to an opposing party. Certainly, Adams did not abolish the Kansas peer review and risk management privileges. Rather, Adams instructs courts to weigh the goal of maintaining health care >staff competency by encouraging frank and open discussions and thus improving the quality of medical care' against a plaintiff's right to learn critical facts and information that go to the heart of the plaintiff's claims. 264 Kan. at 173, 955 P.2d at 1187."

The Court held that it was not persuaded that plaintiff's rights prevailed since the request was based upon a hunch that the documents could contain information. The Court, however, did decide to conduct an in camera inspection of other documents and gave plaintiff a chance to establish that Adams warranted production.

Physician-Patient Relationship

Doss v. Manfredi, ___ Kan. App. 2d ___, 40 P.3d 333 (2002)

Doss' PIP carrier hired Manfredi to review her chiropractic treatment records and advise whether the treatments were related to Doss's injuries from an automobile accident. Manfredi concluded that some were not and the PIP carrier refused to pay these charges. Doss sued Manfredi for negligent evaluation. The Court of Appeals affirmed the trial court's grant of summary judgment holding (even under the theories of negligent misrepresentation and duty owed to a third party by a tortfeasor) Manfredi owed no duty to Doss. Examination of records is too tenuous a nexus to establish a legal duty.

Downey v. United States, 2001 U.S. Dist. LEXIS 6942 (D. Kan.)

Dr. Patterson, a psychologist at the Topeka VA, moved for summary judgment on plaintiff's claims that he committed malpractice via sexual hugs and kisses during formal therapy and after the end of formal therapy during informal therapy. The formal therapy ended in 1993. Defendant Patterson moved for summary judgment. The Court previously determined on other motions that after the formal therapy ended, Patterson was acting outside the scope of his employment. The Court held that after the date when therapy ended there was no doctor-patient relationship. The Court said that the general topics of discussion did not define whether therapy was being provided, the plaintiff's opinion whether a therapeutic relationship existed, and the expressions of concern by another treater that a professional duty may have been violated were also not persuasive that a treater-patient relationship was present. The visits were not regularly scheduled. The visits varied as to frequency, they were not conducted in an office or at the hospital, and they were not part of a plan of treatment. Since there was no formal treatment relationship, plaintiff's claim was barred by the statute of limitations.

Irvin v. Smith, ___ Kan. ___, 31 P.3d 934 (2001)

Plaintiffs sued several physicians claiming that an undiagnosed ventriculoperitoneal shunt malformation caused permanent brain damage. Dr. Gilmarten was granted summary judgment on the grounds no physician-patient relationship existed. The other defendants except Smith settled or were dismissed. The jury found for Smith. (There were two previous trials. In the first, there was a directed verdict for Columbia and a hung jury for Smith and Wesley. The second trial took place in Missouri against St. Luke's and Divelbiss. Plaintiff was awarded $1,770,391.08.) On appeal, the Supreme Court upheld summary judgment for Dr. Gilmarten. Gilmarten, who was not a hospital employee or on call, was contacted by Smith about the plaintiff's condition. He testified that he had a complete picture of her presentation and surmised she was stable; that they jointly developed a plan for her evaluation; and that he assumed responsibility to perform tests on the following day. Gilmarten never had contact from any of the plaintiffs (the child and her parents) and had no involvement in her care. The Court found that Gilmarten had no contractual obligation to treat the patient because he was not on call. The Court held that the mere act of agreeing to see a patient the following day did not create a physician-patient relationship. An expert testifying that the acts departed from the standard of care could not create that relationship. The Court noted public policy concerns about imposing the relationship based upon this type of a consultation call. To discourage such calls would not be in patients' or the public's best interests. Justice Lockett wrote a dissenting opinion on this issue.

The plaintiffs appealed the use of expert testimony which they claimed was outside the scope of the designation because it was introduced by Smith. The expert's counsel stated he would not testify about the physicians. The expert was originally retained by Wesley but adopted by Smith after Wesley's dismissal. The discovery deposition was used at trial over plaintiff's objection. The Court said that Smith could use the expert because he was designated by Smith by the phrase in the pretrial witness list "expert's witnesses named by other defendants." The Supreme Court also held that it was not error to order the plaintiff to appear during voir dire; that it would not decide the issues whether evidence of an annuity or foundation on a future damages exhibit were proper because the issue of damages was moot; and that the verdict was not contrary to the evidence.

Nold v. Binyon, ___ Kan. ___, 31 P.3d 274 (2001)

In this case, a pregnant woman saw a series of providers due to managed care referrals. Some had actual treatment relationships; others did not. The woman was tested for hepatitis B but was not informed that she was positive. After delivery, the child was not treated to prevent contagion. The jury found for plaintiff. The physician defendants claimed error because the trial judge excluded testimony of plaintiff's expert on the breach of the standard of care of Wesley nurses. The trial judge felt the physician was not qualified to testify on nursing standards. The Supreme Court disagreed, holding a physician could testify on nursing standards and remanded for new trial and to compare Wesley's negligence.

The Court instructed that in caring for a pregnant woman with a disease communicable to the child and for which transmission could have been avoided, the physician must notify other treaters, advise public agencies, and advise the mother of the presence of the disease. The Court instructed that a physician who knows or should know of the disease is not excused from his duty because another provider assumes the patient's care. The instruction included that there was a duty to review all records received or that should have been received and the duty extended throughout the time for inoculation. The Supreme Court in reviewing this instruction held that expert testimony was necessary on these issues. The Court also found that there was a duty to the woman to notify her of the disease but the parameters of the duty with respect to the facts of the case needed to be developed at retrial. It noted that a physician should be free to argue that once the patient is transferred to another physician, there is a different standard of care. This element would require expert testimony. With regard to public agency reporting, this was an issue for remand.

Public Hospitals B Construction

Interior Contractors v. Newman Memorial Hospital, 185 F. Supp. 2d 1216 (D. Kan. 2002)

Plaintiff, a disappointed bidder on a hospital project, sued under ' 1983. Defendant moved to dismiss. Plaintiff was the lowest lump sum subcontractor bidder on bids solicited by the hospital's contractor. Plaintiff was asked to break its bid into components. All the bids came in over budget and no contract was awarded. The contractor made revisions to the project and requested modified bids. Based upon the modified bids, the project was given to two other subcontractors for distinct components. Plaintiff claimed deprivation of a property interest. The Court found that K.S.A. 19-4614, specific to construction of county hospital buildings, governed over the more general construction of the county buildings statute, K.S.A. 19-214. Under K.S.A. 19-4614, the hospital had discretion to contract with whomever it determined was most qualified to perform the work. For hospital construction, the county commission's role is to approve plans and authorize the issuance of bonds. The title to hospital property vests in the county; however, the hospital board of trustees has the authority to contract for construction if the plans are approved and bids are advertised. Therefore, the competitive bidding law for county construction projects did not apply. Plaintiff failed to show a property interest as a result of its low bid. Even if the more general county construction statutes applied, the Court held that a disappointed bidder does not have a property interest in a contract that is not awarded to him.

Public Hospitals B Notice of Suit

Knorp v. Albert, ___ Kan. App. 2d ___, 28 P.3d 1026 (2001)

In 1998, plaintiff sued defendant and a district hospital. The hospital moved to dismiss because the appropriate notice was not provided under K.S.A. 12-105b. The hospital denied in its answer that it was liable for the physician under respondent superior. The plaintiff voluntarily dismissed and refiled within six months. Plaintiff still did not comply with 12-105b, but only named the physician as an independent contractor. The physician moved for summary judgment because the physician was an employee. It was granted and plaintiff appealed. The Court held that based upon a contract between the hospital and physician, he was an employee in spite of a contractual provision stating that the hospital would not direct, supervise, or control the physician in his professional care of a patient. The Court found that while the hospital under the contract did not control the details of patient treatment, defendant had little control over any other area of his life as a physician.

Statute of Limitations

Hall v. Miller, ___ Kan. App. 2d ___, 36 P.3d 328 (2001)

Miller, a social worker, counseled plaintiff. Plaintiff contended Miller and the physician who referred her to Miller implanted false memories of satanic ritual abuse, causing her present mental illness. Miller's last contact with plaintiff as an individual therapist was in October 1993 and in group therapy was in July 1994. In 1995, Hall read an article about false memories and in July 1995, Hall attended a meeting of the False Memory Syndrome Foundation. This was the first time Hall learned of Miller's reputation for advocating satanic ritual abuse therapy. She saw Dr. Lake in July 1995 and according to Lake began to see the causative effects of Miller's treatment in August 1995. The case was filed July 26, 1996. The Court granted summary judgment. The Court of Appeals reversed. It held that although plaintiff knew prior to terminating her treatment with Miller that she was misdiagnosed, she had no reason to believe prior to meeting with the False Memory Syndrome Foundation, that Miller caused her harm, thus her injury was not reasonably ascertainable.

Downey v. United States, 2001 U.S. Dist. LEXIS 8251 (D. Kan)

The Court found for defendant following bench trial of her FTCA medical negligence case. An individual defendant psychologist was dismissed on statute of limitation grounds. Plaintiff, a Vietnam veteran, had residual personal and emotional problems from that experience. He was diagnosed with post-traumatic stress disorder and entered treatment with a VA psychologist in 1983. After the formal cessation of therapy, plaintiff and the psychologist continued a social relationship that was claimed to be a little "too social. Plaintiff subsequently sought treatment for drug and alcohol problems. He injured his back and was sent to another psychologist to determine if his continued back pain was psychosomatic. Plaintiff also sought treatment for marital problems. He was put on medication. By 1992, plaintiff had worked for the postal service for 24 years but sought medical retirement and inpatient PTSD treatment at the VA. Plaintiff was not admitted into the program. Plaintiff believed he was not admitted because the psychologist was afraid their social relationship would be discovered. Plaintiff was given 100% disability. In 1993 plaintiff told his treater about the relationship, who told plaintiff's attorney. He again sought entry into the PTSD program in 1995 and told the VA employees about the relationship and filed an administrative claim.

The Court found that after formal therapy ended, the plaintiff and psychologist no longer had a treatment relationship. Plaintiff presented no expert testimony about a causal connection between any breach and plaintiff's damages. The Court further found that the VA did not negligently supervise the psychologist because there was no evidence it was aware of a risk of sexual misconduct. Although there was evidence the psychologist socialized with patients, there was no evidence the VA knew it was excessive or harmful.

Taxation

In re Application of Mercy Health Systems, ___ Kan. App. 2d ___, 26 P.3d 78 (2001)

The Board of Tax Appeals denied Mercy Health Systems exemption from ad valorem taxes for a rehabilitation center. Mercy appealed. The Court of Appeals examined the interpretation and application of K.S.A. 79-201 Ninth providing exemption for property used for humanitarian purposes. The rehabilitation center was moved from the hospital to a location downtown. A fitness center was included in its services. The fitness center was essentially a fee-based health club. Access times for club members and the number of members was limited. The club provided massage therapy and body wraps. A physical therapist was present at all times and a physical examination was required before club members could exercise. Mercy argued that the exemption for humanitarian services applied even if certain non-humanitarian uses are allowed as long as the non-humanitarian use is minimal in scope, insubstantial in nature, and incidental to the humanitarian purpose. The Court of Appeals agreed. It held that Mercy's interpretation followed the plain language of the statute. BOTA first had to determine if the actual use was substantially and predominately related to the humanitarian purpose, then it needed to determine if the club services were humanitarian or non-humanitarian. If the former, the inquiry would end. If not, BOTA needed to determine if the services were minimal in scope, insubstantial in nature, and incidental. Further, if a service is responsive to a community need, then the statute favors a determination the service is humanitarian.

Wrongful Death

Shelton v. DeWitte, ___ Kan. ___, 26 P.3d 650 (2001)

In an automobile accident case, the Supreme Court held that a wrongful death action may be asserted for the death of a viable fetus. Any heir at law (in this case, the grandparents) can maintain the action.

II.

STATUTORY AND REGULATORY UPDATE

FEDERAL

EMTALA

ABN's

On August 30, 2001, CMS provided guidance in the form of a question and answer dialogue on the issue of Advance Beneficiary Notices under the EMTALA. Briefly stated, CMS has determined that the hospital's EMTALA obligations must first be satisfied before an ABN may be requested. CMS describes the hospital's EMTALA obligations for this purpose as the provision of a screening examination and stabilizing treatment. "Under CMS policy, an ABN should not be given to any patient under great duress, which includes patients seeking emergency services before they are stabilized. Nothing in CMS policy prohibits giving ABN's, when otherwise appropriate, to patients who come to emergency care settings after they have received a medical screening examination and are stabilized." The advice is founded on the November 10, 1999, OIG/HCFA Special Advisory Bulletin on the Patient Anti-Dumping Statute which advises that medical screening examinations and/or stabilizing treatment not be delayed in order to get an agreement to pay for services. The advice is also premised upon Program Memorandum A-00-43, Advance Beneficiary Notices for Services for Which Institutional Part B Claims Will Be Processed by Fiscal Intermediaries, July 27, 2000, which provides that a person under great duress is unable to understand and act on his rights. Medical emergencies are given as an example of situations causing great duress. Even if the patient is using the emergency department as a primary care provider or is not in apparent distress, CMS still considers it improper to obtain an ABN until after stabilizing treatment has been provided. According to CMS, payment will be made in these situations because the treatment was reasonable and necessary.

Bio-Terrorism

On November 8, 2001, Steven A. Pelovitz, Director, Survey and Certification Group, CMS, sent a memo to State Survey Agencies and Regional Administrators addressing a hospital's EMTALA obligation in the face of a bio-terrorist threat. The memo was sent as a result of hospital requests for clarification after the anthrax incidents. The memo states that hospitals must meet their EMTALA obligations and patient presenting to a hospital emergency department must receive a screening examination and subsequent stabilizing treatment for any emergency medical conditions found. The stabilizing treatment must, according to the memo, be within the hospital's capability and ca