The 11th Circuit Court of Appeals handed the NCMS and other state medical societies a major victory this week in a legal fight concerning unfair business practices by managed care companies. The NCMS legal team has worked diligently on behalf of physicians to address practices and policies that negatively impact their practices and patients. Read the story that went out as a Special Bulletin to NCMS members on Thursday.
On Tuesday, July 6, 2010, the 11th Circuit Court of Appeals handed the NCMS and other state medical societies a major victory in their fight against unfair business practices against physicians by insurance companies.
In 2002, the NC Medical Society sued in state court alleging that United’s practices – improper coding, bundling, downcoding, edits, improper use of guidelines, and poor claims resolution – breached contracts with physicians (North Carolina Medical Society v. UnitedHealth Group, Inc., et al.). United removed this case (and similar cases brought by state medical associations and physicians in several other states) to federal court in New York, asserting that the federal courts had jurisdiction over claims covered by ERISA.
At the time these state-based cases were filed, another federal case (In re Managed Care Litigation) was pending in Florida against United based on the Racketeer Influenced and Corrupt Organization Act (RICO). Our state cases were put on hold until the Florida case was resolved in 2007. Thereafter, United convinced the court to dismiss all of the state-based cases. NCMS felt these claims were too important to our membership and decided to appeal that decision. On Tuesday, July 6, 2010, the 11th Circuit Court of Appeals ruled that our state-based cases were not precluded by the judgment in the RCIO case and remanded them to the federal district court for further proceedings.
“This is a major milestone in the corridors of justice for the NCMS,” EVP, CEO Robert W. Seligson said. “It is anticipated that if the current suits are successful, it will bring major business practice changes by United, which have been a long time in coming.”
Seligson cited diligence on the part of the NCMS, Medical Society of the State of New York, Connecticut State Medical Society and the Tennessee Medical Association as helping to address the unfair business practices.
“It is critical that steps continue to be taken to keep such practices from occurring,” Seligson said. “It will require the support of NCMS members and their colleagues to provide clear examples of these abuses so that we can seek legal relief for practices. We are committed to eliminating unfair business practices by managed care entities.”
The NCMS will keep you apprised of developments in this important case.
On Thursday, May 13, the NCMS hosted a meeting to discuss the possibility of developing a proposal and applying for a state demonstration program for alternatives to medical tort litigation as outlined in the Patient Protection and Affordable Care Act. Attending the meeting were representatives of the North Carolina Medical Society, North Carolina Hospital Association, North Carolina Bar Association, North Carolina Health Care Facilities Association, North Carolina Society of Health Care Attorneys, Medical Mutual, and Campbell University School of Law.
In addition to reviewing the requirements of the demonstration project, the group heard presentations by Jessica Scott, MD, JD, and Karen Fasler, JD, on the basics of collaborative law in the healthcare context and the potential for developing a demonstration project using a collaborative law approach. The group consensus was to continue to look into the development of a state demonstration project. For more information on the requirements of the state demonstration project, click here .
In 1955, the NC Supreme Court enunciated the three elements of a physician’s duty of care, as follows: (1) [the physician] must possess the degree of professional learning, skill and ability which others similarly situated ordinarily possess; (2) [the physician] must exercise reasonable care and diligence in the application of his knowledge and skill to the patient’s case; and (3) [the physician] must use his best judgment in the treatment and care of his patient. Hunt v. Bradshaw, 242 N.C. 517 (1955).
In 1976, the General Assembly enacted legislation addressing the standard of care in medical malpractice cases. The statute, commonly referred to as the “locality rule,” provides that “the defendant shall not be liable for the payment of damages unless … the care … was not in accordance with the standards of practice among members of the same health care profession with similar training and experience situated in the same or similar communities at the time of the alleged [negligence].” N.C. Gen Stat § 90-21.12. (Emphasis added).
In 1984, the NC Supreme Court considered whether the enactment of the above statute effectively supplanted all three elements of Hunt. The court held that compliance with the “same or similar community” standard of care does not necessarily exonerate [a doctor] from liability for medical negligence. The doctor must also use his “best judgment” and must exercise “reasonable care and diligence” in the treatment of his patient. Wall v. Stout, 310 N.C. 184 (1984).
On February 3, 2009, the NC Court of Appeals unanimously upheld the judgment of a Guilford County court in Swink v. Weintraub holding a physician liable for damages in a wrongful death case, even though the trial court admitted opinion testimony from the plaintiff’s medical experts as to whether defendants exercised reasonable care and diligence and used their best judgment (i.e., the last two elements of Hunt) without requiring the experts to testify, as to those opinions, regarding the “same or similar community” standard of care set out in the standard of care statute. The court in this case held that the three elements of a physician’s duty of care enunciated in Hunt were not repealed when the General Assembly enacted the locality rule, and that the locality rule only applied to the first element of Hunt. Swink v. Weintraub slip opinion, p.11.
Dr. Weintraub petitioned the NC Supreme Court to review the Swink decision. The NCMS, with the support and backing of MAG Mutual, assembled a coalition, that included medical specialty societies in NC and the AMA Litigation Center, to support Dr. Weintraub in his appeal. The coalition sought permission from the court to file a brief supporting the application of the locality rule to all three elements of Hunt.
On January 29, 2010, the NC Supreme Court denied Dr. Weintraub’s petition and thereby eliminated the coalition’s opportunity to file its brief. Although the case was not accepted for review, the NCMS appreciates the early and unequivocal support of MAG Mutual and the AMA Litigation Center in this project. These organizations provided the ability to form a coalition that represents an estimated 65% of all physicians in the country, and 95% of all physicians in NC. The NCMS will consider whether legislative action is needed to address these developments.
The N.C. Supreme Court today upheld a lower court ruling that found the N.C. Medical Board had exceeded its authority in January 2007 when it issued a Position Statement threatening to discipline physicians who participated in executions. In its ruling, the Court stated “Because of this position statement, physicians have declined to participate in executions in any manner, which has resulted in a de factor moratorium on executions in North Carolina.” Read the opinion at www.ncmedsoc.org.
A broad coalition representing ninety-seven percent (97%) of the physicians in North Carolina and approximately 65% of physicians nationwide has filed a motion with the North Carolina Supreme Court seeking permission to file an amicus curiae brief in the appeal of Swink v. Weintraub. Our goal is to ensure continued recognition of a community standard of care in medical malpractice litigation. The February 2009 opinion of the NC Court of Appeals in Swink undermines the community standard in favor of a national standard. The Swink opinion, if not reversed by the NC Supreme Court, would contradict clear statutory enactments of the NC General Assembly requiring use of the community standard. It is still uncertain whether the NC Supreme Court will accept the case for review, and if it does, whether our coalition of medical specialty organizations would be permitted to file a brief. Both NCMS and the AMA Litigation Center are participating in the effort together with the state specialty societies.
