$4.25 Million Failed Diagnosis Award Reduced to $250,000 by Statutory Cap
News: The Supreme Court of California affirmed an appeals court decision to reduce a multimillion-dollar noneconomic damages award in a suit accusing two physician assistants (PAs) of failing to timely diagnose the malignant melanoma in the plaintiff’s 4-year-old daughter. This led to the child’s death. The cap, enacted by California’s Medical Injury Compensation Reform Act of 1975 (MICRA), caps noneconomic damages at $250,000. The state supreme court rejected plaintiff’s bid to create an exception to the MICRA cap.
The court granted review to determine whether the MICRA cap applies to actions against PAs who are nominally supervised by a doctor but receive minimal or no actual supervision when performing medical services. The justices ruled the MICRA cap applies to a PA with a legally enforceable agency relationship with a supervising physician and provides services within the scope of that agency relationship, even if the physician violates his or her obligation to provide adequate supervision.
Background: In December 2010, a woman brought her 8-month-old daughter to a dermatologist’s office to examine a dark spot on the child’s scalp. The PA who examined the child recommended an excision and biopsy. In January 2011, the PA performed a shave biopsy of the lesion. At a follow-up appointment, a different PA reported he believed the biopsied lesion was benign and everything appeared normal.
In June 2011, the plaintiff brought her child back to the office after noticing the lesion was growing back. The PA assessed the lesion as “wart(s)” and recommended liquid nitrogen treatment, which the child received the following month. The child returned in September 2011 when the lesion grew back yet again. A physician at the practice reviewed and countersigned the treatment plan 88 days later. In December 2011, a general surgeon removed the lesion, which was diagnosed as “benign pigmented intradermal intermediate congenital nevus.”
In early 2013, the plaintiff noticed a bump on her child’s neck. A doctor excised the neck mass and referred the child to an oncologist, who diagnosed her with metastatic malignant melanoma. The child passed away on Feb. 27, 2014.
The patient’s mother filed a malpractice suit against the PAs and the practice physicians, asserting negligence and wrongful death. The trial court ruled in the plaintiff’s favor, noting the PAs did not take adequate steps to diagnose the child’s condition, nor did they seek guidance from a physician. The physicians in charge of the practice were found vicariously liable for the PAs’ actions. The court awarded the plaintiff $11,200 in economic damages and $4.2 million in noneconomic damages. However, the court reduced the noneconomic damages to $250,000, pursuant to MICRA.
The plaintiff appealed the reduction, arguing the MICRA cap should not apply because the PAs acted outside the scope of services for which a healthcare provider is licensed. The healthcare professionals provided medical care with negligible physician supervision, which is a violation of California law. The appeals court upheld the reduction, noting PAs can be considered acting within the scope of their licensed duties as long as they are acting under an established agency relationship with a licensed physician. The plaintiff appealed to the Supreme Court of California, which upheld the appeals court ruling.
The justices used the original justification for enacting MICRA to defend their contentions. They noted MICRA was enacted to reduce medical malpractice insurance premiums. Because of this, they believe carving out an exception would be problematic because it would require determining the adequacy of the physician’s supervision on a case-by-case basis. This would create a multitude of questions and issues regarding whether a PA knew he or she was not adequately supervised, and to what extent.
The justices noted they believe their role is confined to interpreting MICRA in a manner that closely follows the legislature’s intent for the legislation. They rejected the plaintiff’s argument that MICRA applies only when the provided treatment is “not within any restriction imposed by the licensing agency or licensed hospital.” The plaintiff contended because the PAs provided treatment without adequate physician supervision, they ran afoul of state medical licensing agency regulations, making this case an issue of licensing agency restrictions. The court disagreed, reasoning if the conduct alone were sufficient to trigger an exception to MICRA, then plaintiffs could consistently avoid MICRA damage caps by identifying one healthcare professional who violates a single regulation. This would open the door to unlimited liability of noneconomic damages through vicarious liability. The justices ruled this was not the purpose of MICRA when it was enacted.
What this means to you: The issue in this case is whether MICRA’s cap on noneconomic damages applies to actions against PAs where a licensed physician is legally responsible for supervising the PA but provides minimal or no actual supervision. The language scope of services for which the provider is licensed is universally understood as the general range of activities encompassed by the provider’s license. The court gave the example of a psychiatrist who is licensed to provide psychiatric treatment. A psychiatrist’s conduct arising out of the course of psychiatric treatment falls within the scope of services for which the psychiatrist is licensed. By contrast, a “psychologist performing[ing] heart surgery” does not provide services within the scope of his or her license.
In this case, the question is whether a PA who establishes a legal relationship with a supervising physician, but in practice receives minimal or no supervision, is nonetheless practicing within the scope of services for which the provider is licensed. Because a PA is only authorized to perform services “when the services are rendered under the supervision of a licensed physician and surgeon,” the court analyzed what it means for a PA to be “under the supervision” of a licensed physician.
PAs allow physicians to manage larger patient populations, which gives more patients the opportunity for needed care. However, establishing how much supervision is required and what defines direct supervision in real time vs. reviewing documents and co-signing notes after the fact is with which something hospitals and medical practices have struggled since these programs began. Regulations require the scopes of practice and the definition and expectations for direct supervision be clearly defined in their bylaws or rules and regulations. Validation of supervision can only be done if described in the medical record by narrative and signature that can support that supervision. It has been problematic, especially in the high-risk areas of medical practice.
In the end, the court determined a PA acts within the scope of his or her license for MICRA purposes if he or she has signed a legally enforceable agency agreement with a supervising physician, regardless of the quality of actual supervision. It is important to note that such issues — and, in particular, statutory damage caps — may vary widely by state. It is strongly recommended to promptly consult with experienced counsel about such issues as soon as they arise.
- Decided Feb. 24, 2022, in the Supreme Court of California, Case number S262487.
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