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Presented by: Clifford A. Rieders, Esq. MEDICAL MALPRACTICE Rieders, Travis, Humphrey, Harris, Waters & Waffenschmidt 161 West Third Street Williamsport,

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Presentation on theme: "Presented by: Clifford A. Rieders, Esq. MEDICAL MALPRACTICE Rieders, Travis, Humphrey, Harris, Waters & Waffenschmidt 161 West Third Street Williamsport,"— Presentation transcript:

1 Presented by: Clifford A. Rieders, Esq. MEDICAL MALPRACTICE Rieders, Travis, Humphrey, Harris, Waters & Waffenschmidt 161 West Third Street Williamsport, PA Phone: Fax: Pennsylvania Association for Justice Medical Malpractice Seminar Philadelphia, April 9, 2012

2 By: Clifford A. Rieders, Esq.2 M-CARE ACT & ATTORNEY FEES

3 § 509 M-CARE ACT 40 P.S. § PAYMENT OF DAMAGES (a) General rule.-- In a medical professional liability action, the trier of fact shall make a determination with separate findings for each claimant specifying the amount of all of the following: (1) Except as provided for under section 508, past damages for: (i) medical and other related expenses in a lump sum; (ii) loss of earnings in a lump sum; and (iii) noneconomic loss in a lump sum. (2) Future damages for: (i) medical and other related expenses by year; (ii) loss of earnings or earning capacity in a lump sum; and (iii) noneconomic loss in a lump sum. By: Clifford A. Rieders, Esq.3

4 § 509 M-CARE ACT 40 P.S. § PAYMENT OF DAMAGES CONTINUED (b) Future damages.— (1) Except as set forth in paragraph (8), future damages for medical and other related expenses shall be paid as periodic payments after payment of the proportionate share of counsel fees and costs based upon the present value of the future damages awarded pursuant to this subsection. The trier of fact may vary the amount of periodic payments for future damages as set forth in subsection (a)(2)(i) from year to year for the expected life of the claimant to account for different annual expenditure requirements, including the immediate needs of the claimant. The trier of fact shall also provide for purchase and replacement of medically necessary equipment in the years that expenditures will be required as may be necessary. **** (5) Liability to a claimant for periodic payments not yet due for medical expenses terminates upon the claimant's death. By: Clifford A. Rieders, Esq.4

5 § 509 M-CARE ACT 40 P.S. § PAYMENT OF DAMAGES CONTINUED 2002 MCARE ACT Payment of damages governed by Section 509. Damages paid a lump sum, except for future medical expenses. Provides mandatory periodic payment system for future medical expenses. By: Clifford A. Rieders, Esq.5

6 FOUR PROBLEMATIC ISSUES RAISED BY THE AMBIGUOUS LANGUAGE IN SECTION 509(B)(1) When should attorney’s fees be paid? Who pays the attorney’s fees? How should attorney’s fees be paid? Should future medical expenses be reduced to present value for purposes of calculating delay damages? By: Clifford A. Rieders, Esq.6

7 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT Medical Malpractice claim brought against gynecologist for allegedly failing to diagnose breast cancer. Jury awarded a verdict for plaintiff in the gross amount of $3,973,000 on January 18, The molded verdict was for $2,582,450, reduced by plaintiff’s 35% contributory negligence. The potential award for future damages was $521,235 but since the plaintiff died, the actual award accrued at the time of death was $165,750. The jury awarded $170,000 per year in future medical expenses payable over five years, for a total of $850,000; after reduction the 35% comparative negligence the award for future medical expenses over the five year period is $110,500 yearly, or $27,625 quarterly. Plaintiff accrued medical expenses, totaling $165,750, when Plaintiff died prior to the expiration of the five-year period. By: Clifford A. Rieders, Esq.7

8 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT Defendants appealed all the way to the U.S. Supreme Court. During appeal process, the plaintiff died on May 23, After a denial of writ for certiorari by U.S. Supreme Court, plaintiff (executrix of estate) filed an amended petition for entry of judgment on November 23, By: Clifford A. Rieders, Esq.8

9 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT Issue: whether the MCARE Act provision stating that future damages are paid as periodic payment after the proportionate share of counsel fees and costs based upon the present value of the future medical damages requires that attorney fees be calculated based upon the five year award when the plaintiff died prior to that, terminating the award prematurely? By: Clifford A. Rieders, Esq.9

10 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT held that § 509 of M-Care Act that required that future damages for medical and other related expenses be paid as periodic payments after payment of proportionate share of counsel fees and costs did not authorize additional attorney fees and attorney was required to calculate his 40% contingency fee based on the present value of the patient’s future damages at the time of death ($165,750) rather than on the potential award ($521,235) – had plaintiff lived the full five years. By: Clifford A. Rieders, Esq.10

11 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT The court heavily relied on analysis that § 509 does not authorize additional attorney fees to support its conclusion that the attorney fees must diminish the award rather than add to the award under the “American Rule” precluding recovery of attorney fees from the adverse party “unless there is express statutory authorization, a clear agreement of the parties, or some other established exception.” (citation omitted) By: Clifford A. Rieders, Esq.11

12 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT § 509 is not an express authorization requiring the adverse party to pay the prevailing party’s attorney fees because it refers to attorney fees by stating that “future damages for medical or other related expenses shall be paid as periodic payments after payment of the proportionate share of counsel fees and costs based upon the present value of the future damages awarded pursuant to this subsection.” (emphasis by the court) 40 P.S (b)(1). By: Clifford A. Rieders, Esq.12

13 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT A significant fact in Sayler is that the plaintiff died prior to the calculation of attorney fees. As a result, liability for future damages already terminated pursuant to 40 P.S (b)(3). Under these circumstances the court viewed attorney fees based on future damages as an addition to the jury award, requiring express statutory authorization. By: Clifford A. Rieders, Esq.13

14 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT In many cases, however, unlike Sayler, the question of when the future damages will terminate remains unknown at the time of the attorney fee calculation because the plaintiff has not yet died. Question: when a jury award is reduced to judgment prior to the death of the plaintiff, will courts be more receptive to the view that the attorney fees should be a percentage of the jury award reduced to present value rather than as the Sayler court did, as an additional cost imposed upon an adverse party. By: Clifford A. Rieders, Esq.14

15 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT Perhaps underlying the Sayler decision was a perceived unjust “windfall” in attorney fees when it is known at the time of judgment that the jury award for future medical benefits has already terminated at a value far less than what the jury awarded. It is harder to view attorney fees that are based upon a jury award for future medical benefits that are expected to be paid in full at the time of judgment as an “additional award” requiring statutory authorization. By: Clifford A. Rieders, Esq.15

16 SAYLER V. SKUTCHES --- A.3D ----, 2012 WL (PA.SUPER. 2012) JUDGE PLATT, LAZARUS, OTT The court did not discuss the potential for conflict of interest between attorneys and plaintiffs or authority from other jurisdictions which analyze similar medical malpractice statutes. The court notes that its conclusion is consistent with the declaration of policy accompanying the MCARE Act “to limit jury awards in medical malpractice suits in order to ensure affordable health care premiums.” By: Clifford A. Rieders, Esq.16

17 PA-JICIV COMMENTARY AND ANALYSIS Attorneys' fees are not to be paid periodically because §509(b)(1) requires that the future medical and related expenses be paid as periodic payments after payment of the proportionate share of counsel fees and costs based on the present value of the future damages awarded pursuant to this subsection (emphasis added). The question arises as to whether the future damages for medical and other related expenses should be reduced to present value. Section 509(a)(2) requires a separate finding for, among other things, “Future damages for: (i) medical and other related expenses by year.” By: Clifford A. Rieders, Esq.17

18 PA-JICIV COMMENTARY AND ANALYSIS The reference to attorney fees in §509 addresses actual payment to the claimant rather than any determination by the fact finder. This is demonstrated by the remainder of the subsections under 509(b); §509(b)(3), (4), (5), (6), and (7) do not relate to the function of the finder of fact. For example, (b)(3) explains the schedule of payments of future damages, (b)(6) sets forth the mechanism in connection with the funding for the “portion of the judgment” where periodic payments have been awarded. The funding is provided by an annuity contract, trust, or other qualified funding plan approved by the court. By: Clifford A. Rieders, Esq.18

19 SAYLER V. SKUTCHES, M.D. NO C-2210V., 2011 WL (LEHIGH CO. MARCH 4, 2011) TRIAL COURT OPINION The trial court agreed with defendants’ interpretation of 40 P.S. § (b)(1) to mean that counsel fees are based only on the accrued future medical damages at the time of Plaintiffs death, and not on damages Plaintiff has not lived to collect. The trial court discussed the Statutory Construction Act (Act), 1 Pa.C.S. § 1901 et seq. in concluding that the statute did not create an explicit authorization for attorney fees which it concluded was required to “add” the fees to the judgment. By: Clifford A. Rieders, Esq.19

20 SAYLER V. SKUTCHES, M.D. NO C-2210V., 2011 WL (LEHIGH CO. MARCH 4, 2011) TRIAL COURT OPINION Trial court considered whether MCARE Act, requires the payment of counsel fees on the entire award of future medical damages, reduced to present value, regardless of whether those future medical damages come to fruition under 40 P.S. § (b)(1). Jury awarded 5 years of future medical damages but the plaintiff only lived long enough for six quarterly payments of future medical expenses, totaling $165,750, plus interest. By: Clifford A. Rieders, Esq.20

21 THE CALIFORNIA EXPERIENCE, AS NOTED IN THE COMMENTARY, ADDRESSES ISSUES THAT WERE NOT FULLY CONSIDERED IN SAYLER V. SKUTCHES. Conflict of Interest - In Sayler the court failed to consider the policy need to avoid the potential for a conflict of interest or continuing legal entanglement evidenced by the California experience, which may have informed the drafters in creating section 509 of the MCARE Act. Invites Battle of Experts Appropriate rate of discount a standard or substandard mortality table Beef up periodic payments such as saved taxes or lump sum & management costs the pitfalls of the “value approach” or the “cost” approach By: Clifford A. Rieders, Esq.21

22 CALIFORNIA EXPERIENCE, AS NOTED IN THE COMMENTARY, ADDRESSES ISSUES THAT WERE NOT FULLY CONSIDERED IN SAYLER V. SKUTCHES. The Sayler court did exactly what the California court cautioned against in Deocampo v. Ahn, 125 Cal.Rptr.2d 79 (Cal. Ct. App. 2002). Plaintiff’s premature death left the full award not fully funded. Even though Pennsylvania went a step further to assure that the annuity company will pay the attorneys' fees in a lump sum as is customarily the case in the community where annuity settlements are made, the result in Sayler did not consider those steps in determining the attorney fees. By: Clifford A. Rieders, Esq.22

23 By: Clifford A. Rieders, Esq.23 OTHER M-CARE ISSUES COLLATERAL SOURCES

24 § 508 COLLATERAL SOURCES 40 P.S. § (a) General rule.--Except as set forth in subsection (d), a claimant in a medical professional liability action is precluded from recovering damages for past medical expenses or past lost earnings incurred to the time of trial to the extent that the loss is covered by a private or public benefit or gratuity that the claimant has received prior to trial. (b) Option.--The claimant has the option to introduce into evidence at trial the amount of medical expenses actually incurred, but the claimant shall not be permitted to recover for such expenses as part of any verdict except to the extent that the claimant remains legally responsible for such payment. (c) No subrogation.--Except as set forth in subsection (d), there shall be no right of subrogation or reimbursement from a claimant's tort recovery with respect to a public or private benefit covered in subsection (a). By: Clifford A. Rieders, Esq.24

25 § 508 COLLATERAL SOURCES 40 P.S. § (d) Exceptions.--The collateral source provisions set forth in subsection (a) shall not apply to the following: (1) Life insurance, pension or profit-sharing plans or other deferred compensation plans, including agreements pertaining to the purchase or sale of a business. (2) Social Security benefits. (3) Cash or medical assistance benefits which are subject to repayment to the Department of Public Welfare. (4) Public benefits paid or payable under a program which under Federal statute provides for right of reimbursement which supersedes State law for the amount of benefits paid from a verdict or settlement. By: Clifford A. Rieders, Esq.25

26 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § (b) Option.--The claimant has the option to introduce into evidence at trial the amount of medical expenses actually incurred, but the claimant shall not be permitted to recover for such expenses as part of any verdict except to the extent that the claimant remains legally responsible for such payment. By: Clifford A. Rieders, Esq.26

27 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § Argument that expense of medical treatment “bears no logical correlation to the degree of pain and suffering which accompanied the injury to the plaintiff” under Martin v. Soblotney, 502 Pa. 418, 466 A.2d 1022, 1025 (1983); see also Carlson v. Bubash, 432 Pa. Super. 514, 639 A.2d 458 (1994) is inapposite. The language of these motor vehicle statutes, Pennsylvania’s Motor Vehicle Financial Responsibility Law and the No-Fault Act, was interpreted as precluding the introduction of medical bills for which there was no recovery, whereas the MCARE Act expressly allows for the introduction of medical expenses despite their non- recovery. By: Clifford A. Rieders, Esq.27

28 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § Carlson v. Bubash, 432 Pa. Super. 514, 639 A.2d 458 (1994) and Martin v. Soblotney, 502 Pa. 418, 466 A.2d 1022 (1983). are inapposite because they were decided under provisions of Pennsylvania’s Motor Vehicle Financial Responsibility Law and the No-Fault Act, respectively, which precluded recovery from the tortfeasor for medical expenses arising out of a motor vehicle accident that were covered by first party insurance benefits. By: Clifford A. Rieders, Esq.28

29 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § It can be inferred from the fact that the legislature chose to include express language in the MCARE Act Section 508 (b) permitting the introduction of medical expenses that the intent was to reverse the effect of Carlson, in which the statutory silence of the MVFRL was interpreted as a preclusion of such evidence. Statutory Construction: presumption aware of case-law and do not intend an absurd result. By: Clifford A. Rieders, Esq.29

30 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § Relevance of introducing medical bills is to consider medical expenses as a factor in exercising their common sense regarding pain and suffering. Superior court in Martin noted that attorneys, insurance adjustors and judges routinely take the amount of medical expenses into account in valuing a case for settlement or in determining the adequacy or excessiveness of a verdict. Martin v. Soblotney, 296 Pa. Super. 145, , 442 A.2d 700, (1982) rev’d in part, 502 Pa. 418, 466 A.2d 1022 (1983). By: Clifford A. Rieders, Esq.30

31 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § Other jurisdictions have also allowed the introduction of such evidence for the jury’s consideration in evaluating the amount appropriate for pain and suffering damages. Virginia - Barkley v. Wallace, 267 Va. 369, 595 S.E. 2d 271 (2004) “the medical bills … were relevant because they tended to establish the probability of …[she] experienced pain and suffering …” New York - N.Y. Ins. Law § 5104(c) (McKinney)(“Where there is no right of recovery for basic economic loss, such loss may nevertheless be pleaded and proved to the extent that it is relevant to the proof of non-economic loss.”) By: Clifford A. Rieders, Esq.31

32 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § A secondary questions is what amount should the jury be permitted to consider, that which was charged or that which was paid by the insurance company? By its own terms, Section 508 makes a distinction between that which was incurred, or charged and that which was paid and provides that “the amount of the medical expenses actually incurred …” is allowed to be introduced. It could have used the word paid, but it did not. By: Clifford A. Rieders, Esq.32

33 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § Point of Charge regarding medical bills given by Judge Gray in Dieffenbach v. Trevouledes, Lycoming County Case No Plaintiffs are not seeking recovery of [Plaintiff’s] medical expenses as a part of this case. However, if you determine that [Plaintiff] was injured as a result of [the Defendant’s] negligence, the law permits Plaintiffs to present evidence of [Plaintiff’s] medical bills to evaluate the appropriate compensation for her pain and suffering. You may only consider these medical expenses for the purpose of evaluating [Plaintiff’s] pain and suffering. You are not to consider them for any other purpose. I instruct you that Plaintiffs do not remain legally responsible for the payment of these medical expenses. I further instruct you that Plaintiffs are not permitted to recover for such expenses as a part of any verdict which you may render in this matter By: Clifford A. Rieders, Esq.33

34 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § § 508 (d) provides exceptions to its abrogation of the traditional collateral source rule as set forth in subsection (a) for the following four categories. (1) Life insurance, pension or profit-sharing plans or other deferred compensation plans, including agreements pertaining to the purchase or sale of a business. (2) Social Security benefits. (3) Cash or medical assistance benefits which are subject to repayment to the Department of Public Welfare. (4) Public benefits paid or payable under a program which under Federal statute provides for right of reimbursement which supersedes State law for the amount of benefits paid from a verdict or settlement. 40 P.S. § By: Clifford A. Rieders, Esq.34

35 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § Examples of § 508 (d) exceptions Medical benefits provided in retirement arguably deferred compensation plans and exempt under (1). Qualifying Self-Funded ERISA Plans exempt under (4). It can also be argued that § 508 does not apply to HMOs because the MCARE Act does not specifically mention HMOs as would be required under Wirth v. Aetna U.S. Healthcare, 469 F.3d 305 (3d Cir. 2006). By: Clifford A. Rieders, Esq.35

36 § 508(B) INTRODUCTION OF MEDICAL BILLS 40 P.S. § Medical benefits provided in retirement are arguably deferred compensation plans and exempt under § 508 (d)(1). Post-retirement medical benefits have been found to be “deferred compensation,” for services rendered in past. Fairview township v. Fairview Township Police Association, 795 A.2d 463, (Pa. Cmwlth. 2002) see also Township of Tinicum v. Fife, 505 A.2d 1116 (1986), appeal denied, 544 A.2d 1343, 1344 (1988). An HMO plan from prior private employment should not be a gratuity as used in §508 because they have been long recognized as deferred compensation. See Lowe v. Jones, 200 A.2d 880 (1964). If accept that they are deferred compensation, then the payments made under the plan fall within the exception set forth in Section 508(d)(1) allowing recovery for those medical expenses paid By: Clifford A. Rieders, Esq.36

37 By: Clifford A. Rieders, Esq.37 OTHER M-CARE ISSUES MOOREHEAD ARGUMENT

38 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) It is well-settled Pennsylvania law that a plaintiff is entitled to recover the reasonable value of medical services provided to him from tortfeasor. In Moorhead, however, the plaintiff’s recovery was limited to the amount paid by Medicare and her supplemental insurance, even though it was stipulated that the reasonable value of the medical services was higher. By: Clifford A. Rieders, Esq.38

39 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) As a result, the issue arises: How far will Moorhead extend if defendants seek to similarly limit the recovery of medical costs to the amount paid rather than the reasonable value of the medical services provided. By: Clifford A. Rieders, Esq.39

40 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) It is arguable that the reasoning of Moorhead turns significantly on the fact that the tortfeasor was also the medical provider which itself provided the medical services in greater amount to the plaintiff than the amount paid for those services. An application of the collateral source rule would have required, in effect double payment where tortfeasor provided medical services itself. See Moorhead, supra, 765 A.2d at 788 By: Clifford A. Rieders, Esq.40

41 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) Plaintiff’s damages were the amount actually paid to the medical facility, and the facility itself provided services in greater amount. Thus, the medical facility, in effect, actually made plaintiff whole for the full amount of the claimed medical expenses. Hardi v. Mezzanotte, 818 A.2d 974, 985 (D.C. App. 2003). By: Clifford A. Rieders, Esq.41

42 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) The arguments in favor of limiting recovery, as in Moorhead, do not apply to non-party medical providers. in effect double payment; See Moorhead, supra, 765 A.2d at 788. made plaintiff whole for the full amount of the claimed medical expenses; Hardi v. Mezzanotte, 818 A.2d 974, 985 (D.C. App. 2003) consistent with the collateral source rule policy that it is better for the wronged plaintiff to receive a potential windfall than for a tortfeasor to be relieved of responsibility for the wrong; Johnson v. Beane, 542 Pa. 449, 456, 664 A.2d 96, 100 (1995) tortfeasor arguably incurred a portion of the responsibility of the wrong when it provides medical services in excess of that billed to plaintiff. By: Clifford A. Rieders, Esq.42

43 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) The majority in Moorhead insisted that the collateral source rule was not implicated by their ruling. Id. 765 A.2d Given that expressed view, the holding of Moorhead should be limited to its facts and not broadly applied to other situations. Evidently the legislature also viewed the Moorhead decision as limited in application because they felt it necessary when writing the MCARE Act provisions to explicitly modify the collateral source rule, see 40 P.S. Section (applicable to actions which arise on or after March 20, 2002). By: Clifford A. Rieders, Esq.43

44 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) Robinson v. Bates, 160 Ohio App. 3d 668, 828 N.E. 2d 657 (2005)(An extremely thorough review of various jurisdictions throughout the country) the Ohio Appellate court noted Pennsylvania was in the distinct minority and observed that “the Moorhead court’s position undermines the purpose of the collateral source rule.” Id., 160 Ohio app. 3d at 687, 828 N.E. 2d at 672. Under the public-policy purposes of the collateral-source rule, defendants should be liable for the full amount of damages caused by their wrongdoing, independent of the financial situation of their victims. Id., 160 Ohio App. 3d at 689, 828 N.E. 2d at 673. Large ‘consumers’ of healthcare such as insurance companies can negotiate favorable rates; those who are uninsured are often charged the full, undiscounted price. “In other words, simply because medical bills are often discounted does not mean that the plaintiff is not obligated to pay the billed amount. Defendants may, if they choose, dispute the amount billed as unreasonable, but it does not become so merely because plaintiff’s insurance company was able to negotiate a lesser charge.” Id., 160 Ohio App. 3d at 680, 828 N.E. 2d at 666, quoting Arthur v. Catour, 345 Ill. App. 2d 804, 281 Ill. Dec. 243, 803 N.E. 2d 647 (2004). By: Clifford A. Rieders, Esq.44

45 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) Arguably Moorehead should not apply when insurers pay the medical expenses and negotiate the fee or any write-offs because: Private health insurers pay the medical expenses; any write-offs occur as the by-product of the insurance carrier’s negotiations with the medical providers. Therefore, plaintiff – not the defendants- should receive the benefits of their insurance contract. Hardi, supra, 818 A.2d By: Clifford A. Rieders, Esq.45

46 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) Arguably Moorehead should only apply to party medical providers when the MCARE Act’s collateral source rule applies because otherwise, the traditional rule should be applied. Under those traditional principals, the policy is that it is better for the wronged plaintiff to receive a potential windfall than for a tortfeasor to be relieved of responsibility for the wrong. Johnson, supra, and Compare, Moorhead, supra. By: Clifford A. Rieders, Esq.46

47 MOORHEAD V. CROZER CHESTER MEDICAL CENTER 765 A.2D 786, 789 (2001) In sum, the Moorehead limitations on recovery of medical expenses to amount paid should be limited to: when the medical bills cover medical services that were provided by the tortfeasor itself and when the amount paid was not reduced as a byproduct of an insurance negotiation or any write-offs; and when the MCARE Act’s collateral source rule applies By: Clifford A. Rieders, Esq.47

48 By: Clifford A. Rieders, Esq.48 OTHER M-CARE ISSUES EXPERT OVERLAP - § 512

49 40 P.S. § EXPERT QUALIFICATIONS (a) General rule.--No person shall be competent to offer an expert medical opinion in a medical professional liability action against a physician unless that person possesses sufficient education, training, knowledge and experience to provide credible, competent testimony and fulfills the additional qualifications set forth in this section as applicable. (b) Medical testimony.--An expert testifying on a medical matter, including the standard of care, risks and alternatives, causation and the nature and extent of the injury, must meet the following qualifications: (1) Possess an unrestricted physician's license to practice medicine in any state or the District of Columbia. (2) Be engaged in or retired within the previous five years from active clinical practice or teaching. Provided, however, the court may waive the requirements of this subsection for an expert on a matter other than the standard of care if the court determines that the expert is otherwise competent to testify about medical or scientific issues by virtue of education, training or experience. By: Clifford A. Rieders, Esq.49

50 40 P.S. § EXPERT QUALIFICATIONS CONTINUED (c) Standard of care.--In addition to the requirements set forth in subsections (a) and (b), an expert testifying as to a physician's standard of care also must meet the following qualifications: (1) Be substantially familiar with the applicable standard of care for the specific care at issue as of the time of the alleged breach of the standard of care. (2) Practice in the same subspecialty as the defendant physician or in a subspecialty which has a substantially similar standard of care for the specific care at issue, except as provided in subsection (d) or (e). (3) In the event the defendant physician is certified by an approved board, be board certified by the same or a similar approved board, except as provided in subsection (e). (d) Care outside specialty.--A court may waive the same subspecialty requirement for an expert testifying on the standard of care for the diagnosis or treatment of a condition if the court determines that: (1) the expert is trained in the diagnosis or treatment of the condition, as applicable; and (2) the defendant physician provided care for that condition and such care was not within the physician's specialty or competence. By: Clifford A. Rieders, Esq.50

51 40 P.S. § EXPERT QUALIFICATIONS CONTINUED (e) Otherwise adequate training, experience and knowledge.-- A court may waive the same specialty and board certification requirements for an expert testifying as to a standard of care if the court determines that the expert possesses sufficient training, experience and knowledge to provide the testimony as a result of active involvement in or full- time teaching of medicine in the applicable subspecialty or a related field of medicine within the previous five-year time period. By: Clifford A. Rieders, Esq.51

52 40 P.S. § EXPERT QUALIFICATIONS PA SUPREME COURT In January 2011, the Pennsylvania Supreme Court granted the application for appeal in two cases involving the overlap of expert qualifications under 40 P.S. § and consolidated the cases for oral argument. 1.Anderson v. McAfoos, No. 9 WAP 2011 )(Pa. Supreme Court) – PAJ filed Amicus Brief – (Argument held November 30, 2011) 2.Cottle v. Tenet Health Graduate, LLC, No. 1, EAP 2011 (Pa. Supreme Court) (Argument Pending). By: Clifford A. Rieders, Esq.52

53 40 P.S. § EXPERT QUALIFICATIONS PA SUPREME COURT Anderson v. McAfoos – PAJ filed Amicus Brief Whether a board certified pathologist may, under Section 512 of the MCARE Act, testify regarding a general surgeon/treating physician's standard of care in deciding to discharge a patient without reading the patient's blood work results? Cottle v. Tenet Health Graduate, LLC, Whether a board certified obstetrician/gynecologist may, under Section 512 of the MCARE Act, testify regarding an emergency room physician's standard of care concerning an alleged misdiagnosis of a patient with an ectopic pregnancy? By: Clifford A. Rieders, Esq.53

54 40 P.S. § EXPERT QUALIFICATIONS PA SUPREME COURT In both cases now before the Pennsylvania Supreme Court, the standard of care crosses disciplines. The plaintiff in Anderson argues the standard of care applies to all doctors discharging a patient: that it was negligent to discharge patient without reading her blood results and determining the cause of the elevated bandemmia and other symptoms. The plaintiff in Cottler argued that there was no variation among specialties regarding the applicable standard of care, that is, the proper procedure required ruling out ectopic pregnancy. By: Clifford A. Rieders, Esq.54

55 40 P.S. § EXPERT QUALIFICATIONS PA SUPREME COURT When the standard of care crosses disciplines, the board certification requirement of section 512(c)(3) should be irrelevant. To insist upon the board certification prerequisite is to elevate form over substance. § 512(e) provides a specific exception to same specialty and same board certification. By: Clifford A. Rieders, Esq.55

56 VICARI V. SPIEGEL 989 A.2D 1277 (PA. 2010) CASTILLE, SAYLOR, EAKIN, BAER, TODD, MCCAFFERY AND GREENSPAN A husband brought medical malpractice claim against an otolaryngologist and radiation oncologist. Wife died at age 39 from metastic tongue cancer. Despite a high risk of recurrence and metastasis: 1.None of her doctors discussed the option of using chemotherapy as an additional means of preventing a recurrence after the surgical removal of her tumor 2.Neither referred her to a medical oncologist to discuss this option 105

57 VICARI V. SPIEGEL 989 A.2D 1277 (PA. 2010) CASTILLE, SAYLOR, EAKIN, BAER, TODD, MCCAFFERY AND GREENSPAN The issue is whether an oncologist is qualified to testify on the standard of care against an otolaryngologist and radiation oncologist under the MCARE Act. held that an oncologist is qualified to testify as an expert against an otolaryngologist and radiation oncologist under the MCARE Act about the standard of care for recommending and referring a patient for follow-up chemotherapy. Adopts the opinion in Gbur v. Golio, 963 A.2d 443 (Pa. 2009) MCARE Act requires same board certification for experts § 512(e) exception to the same board certification requirement For sufficient expertise in a “closely relate field of medicine.” By: Clifford A. Rieders, Esq.57

58 VICARI V. SPIEGEL 989 A.2D 1277 (PA. 2010) CASTILLE, SAYLOR, EAKIN, BAER, TODD, MCCAFFERY AND GREENSPAN In Vicari, the court emphasized the importance of the relatedness of the specific care at issue. Justice Saylor’s concurring opinion notes that the subsection also requires that the expert’s field be closely related to that of the defendant physician. A proposed physician expert who is certified in a different board than the board certifying the defendant physician does not automatically render the expert incompetent under the MCARE Act to testify against that physician. The Court must look at the specific care at issue. By: Clifford A. Rieders, Esq.58

59 VICARI V. SPIEGEL 989 A.2D 1277 (PA. 2010) CASTILLE, SAYLOR, EAKIN, BAER, TODD, MCCAFFERY AND GREENSPAN In Vicari, the oncologist’s testimony that defendant physicians breached the standard of care was based upon the failure of those doctors to offer follow-up chemotherapy and refer the patient to a medical oncologist. The testimony did not relate to the performance of surgery or administration of radiation. This Court explicitly held that the ““relatedness” of one field of medicine to another, under subsection 512(e), can only be assessed with regard to the specific care at issue.” Vicari v. Spiegel, 989 A.2d at (emphasis in the original) The majority states that it adopts the opinion in Gbur v. Golio, 600 Pa. 52, 963 A.2d 443 (2009). By: Clifford A. Rieders, Esq.59

60 1.Examination of the Bill/Statute 42 Pa. C.S.A. § 7102 Multiple defendant physician Physicians employed by hospitals Physician and hospital defendants 2.Settlement 3.Releases 4.Medical Malpractice and Non-Medical Malpractice Cases WE WILL EXPLORE THE FOLLOWING: By: Clifford A. Rieders, Esq.60

61 Does this ever occur in a medical liability case? May occur with respect to misrepresentations concerning treatment. But see 40 P.S , provider not a warrantor or guarantor. Must be a contract in writing. INTENTIONAL MISREPRESENTATION EXCEPTION By: Clifford A. Rieders, Esq.61

62 A physician may be held liable for failure to seek a patient’s informed consent if the physician knowingly misrepresents to the patient his or her professional credentials, training or experience. § 504(d)(2) Was a reversal of Duttry v. Patterson, 771 A.2d 1255 (Pa 2001). MCARE ACT 40 P.S. § , ET SEQ. By: Clifford A. Rieders, Esq.62

63 Punitive damages may be awarded for conduct based upon willful or wanton conduct or reckless indifference to the rights of others. Punitive damages may be permitted in vicarious liability claims where it can be shown by a preponderance of the evidence that the party knew of and allowed the conduct by its agent that resulted in the award of punitive damages. § 505(c) 505 OF THE MCARE ACT By: Clifford A. Rieders, Esq.63

64 Scenario #1 – Real case; where doctor treated his nurse as a patient and said she required sexual intercourse to relax her and ultimately he forced himself on the patient. Scenario #2 – Himalayan Institute case. Tried in Scranton with a punitive damage result. Patient goes to Himalayan Institute to see Swami. Himalayan Institute offers medical care and doctors. Patient treated for knee problems and Swami has inappropriate sexual contact with patient. Sued were the Himalayan Institute, the Swami, and the physicians. ARE SEXUAL ABUSE CASES INTENTIONAL TORTS? By: Clifford A. Rieders, Esq.64

65 In any medical professional liability action in which the claimant proves by a preponderance of the evidence that there has been an intentional alteration or destruction of medical records, the court in its discretion may instruct the jury to consider whether such intentional alteration or destruction constitutes an adverse inference. MCARE ACT, § 511(C) – ALTERATION OF RECORDS By: Clifford A. Rieders, Esq. 65

66 Should be no change since with primary coverage Mcare coverage each physician is going to be insured for $1 million. Query: $2 million verdict against doctors D1 and D2. Jury apportions 59% against D1, which is $1,180,000. You will collect $1 million. You will not collect $180,000 against D2 that was apportioned against D1. The amount you collect against D2 will be $ Plaintiff therefore will be left holding the bag for $180,000. D1 benefitted by only being 59% responsible instead of 60%. You can work the numbers other ways to see how, as in any other joint and several situation, plaintiff is affected. MULTIPLE DEFENDANT PHYSICIANS By: Clifford A. Rieders, Esq.66

67 Vicarious liability, and that should not be affected. PHYSICIAN EMPLOYED BY HOSPITAL By: Clifford A. Rieders, Esq.67

68 If there are multiple defendant doctors all employed by the same hospital then what happens? Are their percentages of liability added up? What if they add up to more then 60%? If there is a primary care physician who is 30% liable and two hospital doctors each 30% and 40% responsible respectively, can the hospital, vicariously liable for a 30% doctor and a 40% doctor, be responsible for the entire recovery including the amount that is the primary care doctor’s portion? If the hospital is found liable on a corporate basis, is its own share of the liability added to its vicarious share? VICARIOUS LIABILITY By: Clifford A. Rieders, Esq.68

69 Same scenario as with multiple defendant physicians although exaggerated because typically cases against hospital defendants have smaller percentages of liability than against the individual physicians. Therefore, temptation to sue more people to make sure there is more coverage. PHYSICIAN AND HOSPITAL DEFENDANTS By: Clifford A. Rieders, Esq.69

70 Greater likelihood of contribution claims by doctors or hospitals against other defendants? CONTRIBUTION By: Clifford A. Rieders, Esq.70

71 If a plaintiff settles with any defendant or enters into any release with any non-defendant, there may be apportionment of liability upon appropriate request and proofs. PHANTOM PARTIES? By: Clifford A. Rieders, Esq.71

72 It can be argued that this is not a change from current law where there may be an apportionment of liability with respect to a settling defendant. Whether that also applies to non-parties with whom there has been a settlement is an open question. A CHANGE IN THE LAW? By: Clifford A. Rieders, Esq.72

73 “An attribution of responsibility to any person or entity as provided in this subsection shall not be admissible or relied upon in any other action or proceeding for any purpose.” What does that mean? Is this intended to provide that collateral estoppel or res judicata is no longer applicable to a party found liable or with whom there has been a settlement? ADMISSIBILITY OF RESPONSIBILITY By: Clifford A. Rieders, Esq.73

74 Plaintiffs with significant damages will have to work harder in their cases against physicians employed by hospitals or physicians employed by any entity where there is vicarious liability. ENHANCED IMPORTANCE OF VICARIOUS/OSTENSIBLE LIABILITY By: Clifford A. Rieders, Esq.74

75 Without question, the statute will place sole practitioners in the position of greater jeopardy with respect to their personal assets. Attorneys will have a greater incentive for suing physicians individually and keeping those judgments on file indefinitely where excess verdicts are obtained. INDIVIDUAL DOCTORS PERSONAL ASSETS ON THE LINE? By: Clifford A. Rieders, Esq.75

76 Physician hospital groups and hospital defendants will find themselves under greater scrutiny in serious damage cases. Unfortunately, discovery in corporate cases, unlike vicariously liable defendants, is severely limited by Pennsylvania Peer Review Protection Act and other statutes in making discovery against corporate defendants very difficult. CORPORATE PARTIES By: Clifford A. Rieders, Esq.76

77 In terms of settlements, some argue the statute will make settlements more difficult. It will be important when settling a case to try to obtain an agreement as to whether the non-settling defendants intend to try to prove the case against the settling defendant. SETTLEMENT By: Clifford A. Rieders, Esq.77

78 Undoubtedly the law will drive doctors into the clutches of hospital employment just to protect their own assets. That was one of the motivations behind the Hospital Association of Pennsylvania so strongly supporting the legislative defendant. CLUTCHES OF HOSPITALS By: Clifford A. Rieders, Esq.78

79 The virtual abolishment of joint and several liability in most circumstances will cause carriers and individual physicians to revisit obtaining only a total of $1 million coverage. Currently the primary limit is $500,000 and the Mcare portion is $500,000 of insurance coverage for medical liability claims. COVERAGE By: Clifford A. Rieders, Esq.79

80 How will Mcare react? There are those who argue that Mcare will simply use the virtual abolishment of joint and several liability as an excuse not to settle cases. MCARE RESPONSE By: Clifford A. Rieders, Esq.80

81 A well insured defendant or one with assets, who does not possess a large share of the liability, is less likely to make a payment upon the “risk” factor associated with joint and several liability. RELEASES By: Clifford A. Rieders, Esq.81

82 In the new scenario, if a case is worth $1 million and a plaintiff thinks they have a 10% shot against D-2, they can simply demand $100,000. Since the law declares that a party with less than 60% responsibility cannot be a joint tortfeasor, the plaintiff will retain the benefit of the bargain. Plaintiff’s will want to assure that there is at least a 60% liable party with adequate assets while defendants will want to diminish the likelihood of any one party being responsible. Defendant may join other parties but they are not going to want to “dump” on one another at trial but rather spread responsibility around or present a united front. This may ensure greater cooperation among defendants. It may also be more likely that defendants who are sued may not join others but point to a nebulous “phantom” defendant. SETTLEMENT STRATEGY By: Clifford A. Rieders, Esq.82

83 The potential advantages of a Giant Eagle settlement are gone. Jury verdict of $100,000. Settling defendant was only 25% at fault, and non-settling defendant was 75% at fault. Settling defendant owes no more money to the plaintiff, and non- settling defendant owes his share of the verdict, $75,000. The plaintiff ends up with $115,000 ($40,000 in settlement from settling defendant prior to trial, and $75,000 from non-settling defendant). Settling defendant gets no money back as a result of “overpaying” i.e., paying $40,000 where the jury would have only made settling defendant pay $25,000. The non-settling defendant gets no reduction in what he has to pay even though his full payment will result in the plaintiff receiving a “windfall” of $15,000 beyond the jury verdict of $100,000. This is the “good bargain” joint tort. GIANT EAGLE IMPLICATIONS By: Clifford A. Rieders, Esq.83

84 Pro tanto, dollar for dollar, releases are very rare since defendants normally would never agree to them. The defendant did not want to be exposed to a potential claim for contribution if the non- settling defendant ended up paying more than its percentage share of the verdict. Without joint and several liability, the non-settling defendant will never pay more than its percentage share. The exception is where the non-settling defendant is more than 60% at fault. PRO TANTO RELEASES By: Clifford A. Rieders, Esq.84

85 Plaintiff accepts a pro tanto release from D1 for $30,000 and proceeds to trial against D2. Jury verdict is for $100,000 with 50/50 liability assessed between the two defendants. Plaintiff receives $70,000 from D2: $100,000 less $30,000 credit for the settlement with D1. However, D2 will turn around and sue D1 for contribution of the $20,000 over D2’s 50% share. PRO TANTO RELEASE BEFORE ACT 17 By: Clifford A. Rieders, Esq.85

86 Same hypothetical, but Plaintiff can only collect the $50,000 from D2 that represents its 50% of the verdict. Under the new version of the statute, there is no contribution claim against D1 because D1 and D2 are not joint tortfeasors. However, if D2 is 60% liable, D2 will pay Plaintiff $100,000 less the credit for the $30,000 settlement with D1, or $70,000; D2 will have a contribution claim for $10,000. PRO TANTO RELEASE AFTER ACT 17 By: Clifford A. Rieders, Esq.86

87 Pro rata language only becomes necessary under the common law because without it, the settling defendant had to worry about being liable for contribution if the non-settling defendant paid more than his “rightful” share. That should no longer be an issue. PRO RATA RELEASES By: Clifford A. Rieders, Esq.87

88 Plaintiff accepts a pro rata release from D1 for $30,000 and proceeds to trial against D2. Jury verdict is for $100,000 with 50/50 liability assessed between the two defendants. Plaintiff receives the $30,000 in full satisfaction of D1’s 50% share, and also $50,000 from D2 as its 50% share of the verdict. There is no claim for contribution. PRO RATA RELEASE BEFORE ACT 17 By: Clifford A. Rieders, Esq.88

89 Same hypothetical, same result. Even if D2 is 60% liable, the Plaintiff receives the $30,000 from D1 in satisfaction of D1’s 40% share, D2 will pay Plaintiff $100,000 less the credit for $30,000 from D1, or $70,000, and there will be no claim for contribution. PRO RATA RELEASE AFTER ACT 17 By: Clifford A. Rieders, Esq.89

90 In order to be joint tortfeasors, the court must examine whether the damages are overlapping or whether they are capable of being separated. Even the timing of the negligence is a factor the court will examine. A motor vehicle incident occurs on January 1 st and causes a broken leg. A month later, when the doctor is removing the cast he renders the patient a paraplegic by his negligence. The doctor and the motorist may not be joint tortfeasors. If the damages are $3 million and the motorists insurance coverage is $15,000, it is to plaintiff’s advantage for the doctor and the defendant motorist not to be joint tortfeasors under Act 17. The paraplegia caused by the doctor is going to cause much greater damages than the broken leg caused by the motorist. But the causal negligence of the motorist may be over 60%. It is to the plaintiff’s advantage for these two parties not to be jointly and severally liable. Prior to the change in the law, the plaintiff would have wanted joint and several liability. MEDICAL MALPRACTICE AND NON-MEDICAL MALPRACTICE CASES By: Clifford A. Rieders, Esq.90

91 The negligence of the defendant motorist and the hospital occur close in time and the damages caused by the defendant motorist is a head trauma and the hospital fails to diagnose a brain bleed. In this situation the damages may be difficult to separate. If there is joint and several liability and the motorist only has $15,000 in insurance, the plaintiff may be in a very precarious position if the liability of the defendant motorist is very strong, such as the case where the defendant motorist ran a red light. In this context, the plaintiff is going to try to argue that the defendant motorist and the hospital are not jointly and severally liable and that it is possible to segregate the damages from the failure to diagnose the brain bleed from the initial minor concussion caused by defendant motorist. SCENARIO #2 By: Clifford A. Rieders, Esq.91

92 What is bad about this change in joint and several liability is that it is very harmful for the injured party where a defendant is impecunious, underinsured, or does not have assets and the plaintiff is very seriously hurt. The more damages a person suffers at the hands of a party who is not 60% liable, the greater advantage is reaped by the less than 60% liable due to the effect of the law. PRECIS` By: Clifford A. Rieders, Esq.92


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