By Damian D. Capozzola, Esq.
The Law Offices of Damian D. Capozzola
Jamie Terrence, RN
President and Founder, Health Care Risk Services
Former Director of Risk Management Services (2004-2013)
California Hospital Medical Center
Morgan Lynch, 2018 JD Candidate
Pepperdine University School of Law
News: In 2010, a 39-year-old patient was told by a doctor that a catheterization showed a 60% blockage in an artery. He then was told that if he did not have a pacemaker implanted, he would die. That doctor implanted the pacemaker and then recommended a stent. The patient sought other opinions, and other doctors told him that he did not need the pacemaker. They also told him that it could not be removed. The patient filed suit against the doctor, who settled with him, and the hospital. The trial lasted seven days, and the jury found that the doctor exceeded the terms of ordinary care and failed to obtain informed consent. The jury also found that the hospital failed in its duty and conspired with the doctor in accomplishing a corrupt or unlawful act. The jury awarded the plaintiff $21.3 million.
Background: In early September 2010, a milk truck driver went to a doctor to have testing done. The doctor informed the patient that a catheterization showed a 60% blockage in an artery and that if he did not have a pacemaker implanted, he would die. After the surgery to implant the pacemaker, the doctor recommended a stent. The patient was suspicious about this recommendation, so he decided to obtain the opinions of additional doctors. They informed him that he actually had a 10% blockage. They also told him that the surgery to implant the pacemaker was unnecessary. Unfortunately for the patient, the pacemaker could not be removed. Because his surgery left him bedridden for weeks, he suffered shoulder problems. The patient also was forced to switch to a job that keeps him away from home more, which meant less family time.
The patient filed suit against the doctor and hospital in 2011. Almost 400 other plaintiffs also filed suit against the hospital and the group of cardiovascular specialists formerly known as “the heart doctors.” This action was the first of the large pool of litigants to be prosecuted. In his complaint against the hospital, the patient alleged the hospital formed a joint venture with local cardiologists that provided incentives to boost the number of heart procedures, but it failed to put in safeguards to ensure that only necessary procedures were performed. Evidence was presented at trial that showed the hospital anticipated making $90 million over three years from heart procedures and that executives were given bonuses based on productivity and revenue. The same hospital agreed to pay the federal government $16 million in 2014 to dismiss civil claims against it for submitting false or fraudulent claims to the Medicare and Kentucky Medicaid programs for medically unnecessary heart procedures.
In his suit against the doctor, the patient claimed the doctor injured him by operating on him without justification and that he failed to obtain informed consent. The doctor settled with the patient before trial. That doctor later was indicted on criminal fraud charges for implanting devices into patients without sufficient need or justification.
At the seven-day trial against the hospital, it was argued that the operation on the patient was medically necessary. The hospital also stated that the doctor acted independently of the hospital and said that doctors, not the hospital, make medical decisions. As to the alleged joint venture, the hospital said it was trying to strengthen cardiac care in a historically underserved region. Finally, the hospital stated it had no choice but to hire foreign doctors and because of a shortage of cardiologist specialists, it had to pay them incentives to get them to move to London, KY. The jury was unmoved by those arguments and rendered a verdict in favor of the patient for $21.3 million. The verdict included $20 million in punitive damages against the hospital on the basis that the hospital engaged in a conspiracy to profit off the people of Laurel County. The base $1.3 million was allocated 50/50 between the doctor and the hospital, but because the jury also found the existence of a joint venture, the hospital also was liable for the doctor’s portion.
What this means to you: This case illustrates the need for hospitals to exercise care when hiring medical personnel. The screening process for hiring doctors, nurses, administrators, and other employees should be oriented toward preventing cases such as this one. Hospitals should put in review mechanisms to ensure ethical treatment of all patients. In a perfect world with a hospital that practiced morally, the test results received by the doctor in this case would have been reviewed by a supervisor to increase accountability and prevent tragedies such as this one.
All hospital employees are required by law to participate in compliance training. They learn about fraudulent billing, anti-kickback laws, and laws regarding bribes or excessive gifts for physicians. This training also covers the requirement to report noncompliance incidents to the compliance officer within the employees’ organization. Hospitals also have case managers who follow assigned patients from admission through discharge and beyond. Their role is to evaluate whether the patients’ needs are being met, the level of care is appropriate, and future care needs are addressed. In addition, a case manager has the responsibility to make sure that abnormal test results are acknowledged by attending physicians and medical plans of care are adjusted based on test results. Case managers are trained to identify fraud and abuse by healthcare providers and are mandated to report them. Had the employees of this hospital followed the required training, this practice should have been stopped before harm occurred.
Another lesson to be learned from this case is to seek multiple opinions on life-changing medical procedures. It is tragic that the plaintiff here learned too late that the procedure was unnecessary and irreversible and that the severity of the diagnoses should have prompted the plaintiff to seek a second opinion. Even medical professionals who have the best intentions misread tests and make other similar mistakes every day. Many such errors are harmless, but where one’s livelihood or life is at stake, it would behoove patients to seek additional advice. This case also should encourage medical professionals to tell their patients to seek second opinions when appropriate.
This case also demonstrates the function of informed consent. When doctors have an interest in a certain procedure or treatment, it is imperative for them to fully inform their patients of that interest. That disclosure will permit the patient to decide whether they can attribute the recommendation of the procedure to the outside interest or their medical welfare. It also is important to let patients know what their options are so they can make an informed decision as to how to proceed with their medical care. Finally, it is equally important to tell patients the risks of medical procedures. Without that knowledge, a layperson is not in an informed position to make decisions regarding his or her health. It also is a good idea to document the process of explaining the options to the patient. Some physicians walk the patients through all possible options, from nothing at all to the most aggressive treatment, and explain the pros and cons of each. During this conversation, notes are made to reinforce the explanations, and then the pages used to explain the options can be saved in the patient’s file. By taking this step, if there ever is a question about what was explained to the patient, there is contemporaneous evidence to fall back on. Such evidence can be tremendously helpful in defending a lawsuit, should that be necessary.
One argument the hospital made in its defense was that the shortage of cardiac specialists in the area forced it to hire foreign specialists. This argument leads to the point that training is essential for foreign professionals and locals alike. Because each culture is different, hospitals and staff members should be conscious of cultural differences and, equally important, be prepared to ensure that clashing cultural norms do not interfere with the administration of efficient and adequate healthcare. A hospital must not allow a misunderstanding stemming from cultural differences to have the appearance of corruption that this case contained. Also, ensure that all doctors can adequately articulate the risks, alternatives, and other factors concerning the procedures they intend to perform on patients.
Another factor here, and unfortunately not an uncommon one, is the tendency for administrations to offer physicians a “physician-friendly” environment. A hospital can’t survive without patients, and patients go to hospitals where their physicians practice.
Keeping physicians happy, regardless of their ethnicity, specialty, or ethical conduct, can seem to be of paramount importance. It is much easier to look away than to confront a physician whose practice is in question. In many situations, even though “everyone knows,” employees and administrators fear reprisals and fall silent. Hospitals should have communications mechanisms for reporting concerns without fear of reprisal.
A second argument that the hospital made was that its payments to induce the influx of new cardiac specialists were made to help serve a historically underserved community. While this step would be an admirable action, except for the corruption, it brings to light an issue with offering incentives in the medical industry. Incentives sometimes give the impression of improper influence on a doctor’s decisions. Therefore, hospitals must be wary of what they incentivize and pay careful attention to why they offer them, in addition to how they will affect the behavior of medical professionals.
The jury here made a decision that will help pave the way for the remaining hundreds of plaintiffs who will seek remedies for their unnecessary heart procedures. The hospital was projected to make $90 million from the heart procedures, and with only one case, has to pay out $21 million to only one plaintiff. When money gets put before the welfare of patients, everyone loses.
- Laurel County Circuit Court, Kentucky. Case Number: 12-ci-00090, Aug. 10, 2016.