Alert02.18.2020

Health Law From the Courts: Review of 2019 Connecticut Case Law

By Margaret A. Bartiromo and Stephen M. Cowherd

Our annual survey of health law cases for 2019 includes a number of notable decisions affecting the practice of medicine and the delivery of other health care services in Connecticut.  These include the Connecticut Supreme Court’s decision in Doe v. Cochran concerning the duty of care owed to a non-patient third party and the Connecticut Appellate Court’s decision in Wood v. Rutherford setting forth new circumstances under which physicians must obtain additional informed consent from their patients. This year’s summary also covers another Connecticut Supreme Court decision establishing a standard for resolving disputes involving the disposition of pre-embryos, two Connecticut federal District Court decisions that reached differing results on how much reliance can be placed on pre-authorizations from health plans and an update on the status of the ongoing class action challenging the placement of Medicare patients in observation status.

If you would like to discuss any of the matters addressed in these cases, please contact one of our Health Care Law attorneys.

Physician Held to Owe Duty of Care to Identifiable Non-Patient

In a case of first impression, the Supreme Court of Connecticut held that a physician owed a duty of care to an identifiable non-patient who could foreseeably be exposed to a sexually transmitted disease (STD) due to the incorrect reporting of a test result. In Doe v. Cochran, 332 Conn. 325, the plaintiff and her boyfriend decided that they would be tested for STDs prior to entering into a sexual relationship. The boyfriend informed the defendant-physician that he wished to be tested for the protection of his new, exclusive girlfriend. The lab report indicated the presence of herpes but a staff member in the physician’s practice incorrectly informed the boyfriend that his test results were negative. The couple began a sexual relationship and the plaintiff-girlfriend, who had previously tested negative for STDs, began exhibiting symptoms of herpes. The boyfriend contacted the physician, who informed him that he had in fact tested positive for herpes, and the plaintiff sued the physician for negligence.

The physician argued that since there was no physician-patient relationship between the parties, there could be no claim. Alternatively, the physician argued that if the claim was for ordinary negligence he did not owe her a duty of care. The trial court granted the physician’s motion to strike.

A divided Connecticut Supreme Court reversed, finding first that the plaintiff’s complaint was for ordinary negligence and not medical malpractice. The court also found that in most instances a physician’s liability for the negligent care of a patient does not extend to nonpatient third parties who have been foreseeably injured by that negligence, but under the facts of this particular case the physician owed a duty to the plaintiff. The court made clear its holding was limited to STDs and that the duty extended only to nonpatient third parties who were identified to the provider.

The court found support for its decision in the case law of other states and in the public policy of stemming STDs and other contagious diseases (among other things, the court cited Connecticut General Statutes §20-14e(e), which allows prescribing practitioners to dispense antibiotics to the sexual partners of patients with certain STDs without physically examining the partners).

Providers should stay alert to see if would-be plaintiffs attempt to use this important precedent to extend  the limits of liability  to other communicable diseases and/or  other types of third parties.

Additional Informed Consent Required Following Substantial Change in Circumstances 

In Wood v. Rutherford, 187 Conn. App. 61, the patient signed an informed consent prior to undergoing a laser ablation procedure. In a follow-up examination a few weeks later, the surgeon discovered that the patient’s skin had become agglutinated (i.e., fused) at the surgical site and he separated the agglutination with his fingers. The patient alleged that this caused her great pain as well as physical injuries and she sued the physician for battery and negligent infliction of emotional distress. After the physician’s motion to dismiss was granted, the patient filed a revised complaint,  claiming that the physician failed to obtain her informed consent before engaging in a course of treatment for a complication that the physician discovered during the post-operative exam. That claim was also dismissed.

The Appellate Court determined that the trial court improperly dismissed the patient’s battery and negligent infliction of emotional distress claims, finding that these claims were not medical malpractice claims focused on the physician’s level of skill, but were claims that the physician committed a battery through his intentional conduct without the patient’s consent, causing her emotional distress. The court also reversed the trial court’s decision on the patient’s claim that a substantial change in circumstances obligated the physician to obtain her informed consent before separating the agglutination with his fingers. The court looked to how other states have treated the issue and concluded, as a matter of first impression in Connecticut, that the scope of a consent provided by a patient is necessarily limited to the course of treatment outlined by the medical practitioner and encompasses only those risks that are disclosed, so that when a substantial and material change occurs during the course of medical treatment, the practitioner is generally obligated to obtain consent from the patient before proceeding further. The court determined that there was a genuine issue as to whether the discovery of the medical complication in this case constituted a substantial and material change. The court also found that the informed consent that the patient signed for the laser ablation was silent with regard to postoperative care.

Regardless of how the case is ultimately decided on the merits, providers should not assume that the informed consents they obtain from their patients cover all complications and risks of medical treatment. Deciding what constitutes a substantial and material alteration of risk requires careful consideration of the circumstances of each patient individually.

Court Interprets Medical Malpractice Claim as Ordinary Negligence

In Stratz v. Upchurch, the plaintiff, representing a client of a home care agency, sued the agency and an employee of the agency for medical negligence after the client died of hypothermia while under the care of the agency. The plaintiff alleged that the agency’s employee fell asleep while on duty and the client wandered out of her house and fell into a snow bank where she was later found unconscious. The defendants moved to dismiss the complaint on the basis that the allegations did not satisfy all requirements for a medical malpractice claim (for example, the plaintiff included a letter from a licensed nurse practitioner pursuant to Connecticut General Statutes §52-190a, but the letter did not name the state in which the practitioner was licensed, as is required under the statute for opinion letters where the defendant health care provider is a non-specialist). The Superior Court of Connecticut (J.D. Fairfield) found that the claim was defective as a medical malpractice claim but agreed with the plaintiff that the court should view the complaint as also sounding in ordinary negligence. Noting that Doe v. Cochran (summarized above) provided guidance on this issue, the court determined that the alleged negligence was not of a specialized nature nor did it involve the exercise of medical judgment; instead, the allegations sounded in ordinary negligence and for this reason the court denied the defendants’ motion to dismiss. (Stratz v. Upchurch, Docket No. FBTCV196085237S (November 8, 2019))

This is another instance of how courts may be willing to find liability for a health care provider’s negligent act even if the plaintiff’s claim does not meet the strict requirements of a medical malpractice action.

CT Supreme Court Establishes Standard for Resolving Disputes Regarding Disposition of Pre-Embryos

As a matter of first impression, the Connecticut Supreme Court in Bilbao v. Goodwin, 217 A.3d 977, recently determined that, in the case of a dispute between sperm and egg donors regarding the disposition of pre-embryos, an agreement between them governing the disposition is presumed valid and enforceable.

The plaintiff and defendant had undergone in vitro fertilization. The process successfully produced several pre-embryos which were frozen by the clinic for implantation in the future. The couple entered into a storage agreement with the fertility clinic in which they agreed that if they ever divorced or if one partner died, the pre-embryos would be discarded. The couple indicated their agreement by checking and initialing a box in the contract. Both parties also signed the contract. Five years later, the couple sought a divorce and one issue in the dispute was the disposition of the pre-embryos. The wife wished to have the pre-embryos discarded but the husband wished to preserve the pre-embryos in case the couple reconciled or alternatively he wished to have them put up for adoption.

The trial court found that the contract was little more than a check-the-box questionnaire and unenforceable for lack of consideration. In the absence of an enforceable contract, the trial court determined that the pre-embryos should be treated as marital property and awarded to the party with the greater interest in them, in this case the wife. The husband appealed the decision, arguing that the pre-embryos were not marital property but human beings and therefore must be awarded to the party seeking to preserve them. He also argued that, even if the pre-embryos were property, the trial court failed to employ a legal presumption in favor of the party seeking to preserve them.

The Connecticut Supreme Court found the contract enforceable. The court disagreed with the trial court’s conclusion that the contract was essentially a check-the-box questionnaire and found that there was an offer and acceptance between the parties as well as consideration. The court also decided, as a matter of first impression, that where the parties have entered into a contract with a facility governing disposition of pre-embryos, a court should look to the contract as the first step in resolving a dispute between the parties rather than applying a “balancing” approach (where the court weighs each progenitor’s interest in the pre-embryos) or a “contemporaneous mutual consent” approach (under which both progenitors must agree to a disposition at the time of disposition). The court also noted that fertility clinics are statutorily required to provide progenitors with information to allow them to make an informed choice regarding disposition, including the option of storing, donating or disposing of unused embryos, and that the contractual approach was consistent with Connecticut’s public policy of enforcing “intimate partner” agreements such as prenuptial and postnuptial agreements. Because the husband argued that there was no enforceable contract, the court did not reach the question of whether the pre-embryos were human beings.

The court explicitly clarified the scope of its holding in two respects: first, it stated that its decision applied to contracts that, if enforced, would not result in procreation. The court stated that it was not deciding whether the contractual approach would apply in a situation where a party could be forced to become a genetic parent against his/her wishes, or if the contractual approach does apply, whether such a contract would be unenforceable for public policy or other reasons. Second, the court noted that it did not decide what a court must do in the absence of an enforceable contract.

CT District Court Faces Issue of Physicians’ Reliance on Pre-Authorizations Obtained from Insurer

The U.S. District Court for Connecticut (Meyer, J.) issued two opinions on the same day last year regarding the failure of a Connecticut-based health insurance company to pay for medically necessary surgery after the surgeons claimed to have received pre-authorizations from the insurer. Both decisions dismissed the providers’ claims against the insurer under the federal Employee Retirement Income Security Act (ERISA) but they reached different results on the issue of detrimental reliance.

In Taylor Theunissen, M.D., LLC v. United HealthCare Group, Inc., 365 F.Supp.3d 242 (D. Conn. 2019), the surgeon sought pre-authorizations for two surgeries he intended to perform on a patient. For each surgery, he was copied on a letter from the insurer addressed to the patient regarding the anticipated surgery, which included, among other things, the billing codes for the procedure and a statement that the services would be eligible for coverage. Each letter also stated that the information in the letter did not guarantee payment or represent a treatment decision. The surgeon billed over $200,000 for the two surgeries and was paid approximately $2,400 in total by the insurer. He brought an action against the insurer and the patient’s employer (as co-administrator of the plan) for violations of ERISA as well as state law claims, including a claim for promissory estoppel based on his reliance on the letter which he claimed included a promise of payment.

The court denied the employer’s motion to dismiss the ERISA claims because the employer was both the plan sponsor and the plan administrator but granted the employer’s motion to dismiss the state law claims.

With respect to the ERISA claims against the insurer, the court found that the surgeon was barred from pursuing an action under ERISA since ERISA allows only plan participants and beneficiaries to file suit for ERISA benefits and the patient’s plan contained an anti-assignment clause that prevented her from assigning her claim for benefits to a third party. The court also granted the insurer’s motion to dismiss all of the surgeon’s non-ERISA state law claims. This included rejecting the promissory estoppel claim on the basis that the alleged pre-authorization letter did not contain a clear and definite promise to pay but on the contrary clearly disclaimed any guarantee of payment.

The Connecticut District Court faced a similar fact pattern in Aesthetic and Reconstructive Breast Center, LLC v. United Healthcare Group, 367 F.Supp.3d 1 (D. Conn. 2019), but unlike in Theunissen, the practice alleged that it received an oral pre-authorization from the patient’s insurer for two surgeries and received no payment for either surgery. The practice asserted many of the same state law claims against the patient’s employer and the insurer that the surgeon in Theunissen asserted. The court granted the employer’s motion to dismiss all of the practice’s claims and also dismissed all of the practice’s claims against the insurer, with the exception of the promissory estoppel claim. There, the court found that the practice’s claim implicated the insurer’s alleged oral promise to the provider of reimbursement— it did not implicate the actual coverage terms of the plan or require a determination as to whether those claims were properly applied. The insurer attempted to introduce written pre-authorization letters that it claimed had been sent to the practice and were substantially similar to the letters that the surgeon in Theunissen received, but the court refused to consider them, finding that the letters were not integral to the practice’s complaint because the practice did not allege that its communications with the insurer were in writing or limited to writing.

This case is a reminder to providers of the importance of documenting all material communications with insurers and that strict attention should be paid to following all of a health plan’s requirements for pre-authorization prior to providing services.

Court Upholds Contempt Order Imposed for Failure to Produce Patient Records to DPH; Orders Payment of DPH’s Attorneys Fees

In Commissioner of Department of Public Health v. Colandrea, the Superior Court of Connecticut (J.D. Hartford) took significant enforcement action against a dentist who failed to produce patient records to the Connecticut Department of Public Health (DPH).

In 2014, the dentist was requested to produce 31 patient records in response to an audit conducted by United HealthCare. When the dentist refused to produce the records, the matter was referred to DPH, which over the next few years obtained first a subpoena and then a contempt order against the dentist in Superior Court, along with a fine of $1,000 for each day of noncompliance. In 2017, the dentist moved to vacate the contempt order and the fine on the basis that the patient records, which had been stored in his office basement, were likely discarded following a flood in the basement earlier that year.

While the court upheld the contempt order, it vacated the monetary penalty. The court also ordered the dentist to make available to DPH all records relating to the subject patients from any period of time and required the dentist to provide DPH with full access to his dental office for the purpose of inspecting and verifying the manner of storage, existence and location of patient records and other documents. In addition, the court awarded DPH its attorneys fees. (Commissioner of Department of Public Health v. Colandrea, Docket No. HHDCV156064393S (January 2, 2019))

Healthcare professionals are well-advised to work with experienced counsel when responding to insurance carrier record requests and those of governmental authorities to help avoid the occurrence of similar enforcement measures.

CT Supreme Court Rules on Transfer of Funds Made by Son in a Suit by a Nursing Home

The Connecticut Uniform Fraudulent Transfer Act (Connecticut General Statutes §52-552a et seq.) (CUFTA) offers relief to unsecured creditors when a transfer of a debtor’s assets is established as fraudulent. Last year, the Connecticut Supreme Court addressed the question of whether CUFTA applies when the transfer is made by an agent of the debtor instead of the debtor itself. In Geriatrics Inc. v. McGee, 332 Conn. 1, an elderly woman granted her son a power of attorney to manage her finances. The son undertook the care of his mother and, consistent with the power of attorney agreement signed by the mother, paid himself out of his mother’s funds for the care he provided to her and for his power of attorney services. When the son was no longer able to care for his mother, he transferred her to a skilled nursing home facility. During the mother’s stay at the facility, he continued to draw checks from her bank account for his power of attorney services, as well as to pay himself back for loans he had advanced to her and to pay her creditors. Medicare and private insurance paid for her residency and care for several months but when these benefits were exhausted, the resident began to accumulate debt. The operator of the nursing home sued both the resident and the son, claiming it was owed over $150,000 for services provided to the resident and alleging, among other things, unjust enrichment and violation of CUFTA. The trial court found in favor of the son on both claims. On the unjust enrichment claim the trial court found that the nursing home failed to prove that its interest in the resident’s assets should be accorded priority over the interest of the son. With respect to the CUFTA claim, the court held that CUFTA provides for recovery when there is a transfer made by a “debtor,” which is defined as a person who is liable on a claim. Because the son did not sign the residency agreement with the nursing home, the court found that the son was not a debtor of the nursing home under CUFTA.

The Supreme Court of Connecticut determined that the trial court’s decision on the unjust enrichment claim was supported by the record and not clearly erroneous, but it reversed the trial court’s decision on the CUFTA claim based on the language of CUFTA which explicitly states that “[u]nless displaced by the provisions of” CUFTA, the law relating to principal and agency supplements CUFTA. The court noted that a power of attorney creates a principal-agency relationship such that the son’s transfers of his mother’s assets would be imputed to her and framed the issue as whether the language of CUFTA provides, explicitly or implicitly, that the acts of the debtor’s agent are not imputed to the debtor. The court found no such language.

This case illustrates the problems that can arise when a power of attorney or other party that has legal access to a patient’s resources to pay for care is not a party to, and does not otherwise acknowledge the financial obligations of, a patient’s contract with a provider.

Medical Expert Witness Fees Held Unreasonable

Physicians and other health care providers who utilize expert witnesses or offer their services as such should take note of two recent decisions by Connecticut Superior Courts which found that the fees charged by the experts were excessive.

In Russell v. Korobkin, a neurologist serving as an expert for the defendant in a motor vehicle accident in which the plaintiff claimed traumatic brain injury charged $1,500 per hour for his services. The Superior Court (J.D. Stamford-Norwalk) noted the lack of appellate authority in Connecticut to shed light on what constitutes a reasonable expert witness fee. The court reduced the fee to $750 per hour, citing the defendant’s failure to provide information that would inform the court as to the reasonableness of the fee (such as comparable rates charged by practicing neurologists or  the rate charged by the physician in other cases). The court also noted that a premium charge would have been justified if the physician had written in the field of neuropsychology or if he had participated in clinical studies of the type of injury the plaintiff claimed to have suffered. (Russell v. Korobkin, Superior Court, Judicial District of Stamford-Norwalk, Docket No. FSTCV-186035066S (April 10, 2019))

In Savenelli v. Montowese Health and Rehabilitation Center, Inc., the plaintiff argued that the $1,200 per hour fee of her expert witness was not unreasonable given that the physician carried a full patient load, had excellent credentials and, unlike the expert in Russell v. Korobkin, had published in his area of expertise. The plaintiff also required that the fee be prepaid. The Superior Court (J.D. New Haven) decided on a fee of $700 per hour, excluding preparation time. The court also ruled that the defendant did not have to pay the fee until after the completion of the deposition. (Savenelli v. Montowese Health and Rehabilitation Center, Inc., Superior Court, Judicial District of New Haven, Docket No. CV-166064216S (August 19, 2019))

While the court in the first case suggested that a premium would be justified if the expert had published in his field, the court in the second case appears not to have given this fact much weight. In light of these decisions, physicians and other health care providers utilizing or offering expert testimony should be prepared to provide substantiation for the rates charged to provide the testimony.

Second Circuit Considers Obligation of Hospital to Provide Sign Language Interpreter

The federal Rehabilitation Act (“RA”) requires recipients of federal funds to provide appropriate auxiliary aids to persons with impaired sensory, manual, or speaking skills where necessary to afford such persons an equal opportunity to benefit from the service in question. Money damages may be recovered upon a showing of intentional discrimination, which may be inferred when an “official” or “policymaker” acted with at least deliberate indifference to the strong likelihood that a violation of federally protected rights would result.

The U.S. Court of Appeals for the Second Circuit in Biondo v. Kaledia Health, 935 F.3d 68 (2d Cir. 2019), ruled on a hospital’s obligation to provide a sign language interpreter for a patient who was born deaf. The patient could not speak intelligibly but she was fluent in American Sign Language (ASL) and could communicate to some degree by text and writing. She was admitted to a hospital in New York after suffering from fainting spells. The patient requested an ASL interpreter from several hospital employees but was never provided an interpreter despite her expressed dissatisfaction with written communication during her six day stay. Following her discharge, she sued the hospital seeking, among other things, money damages under the RA. The District Court ruled in favor of the hospital, finding no evidence that any official at the hospital knew that the patient could not effectively communicate with hospital staff.

The Second Circuit disagreed. The court rejected the hospital’s argument that an “official” or “policymaker” must be someone with substantial supervisory authority, noting that such a standard is unspecific and unhelpful in a large institution where it is often the case that patients and visitors cannot identify which staff members are supervisors, and that officials and policymakers will vary depending on the decision to be made. The court also rejected the hospital’s argument that the failure to provide the interpreter was attributable to negligence or bureaucratic inaction, not deliberate indifference. The court acknowledged that a jury might find the hospital’s actions to be negligent but a jury could also find that hospital staff were aware of the patient’s communication issues and had the authority to call for an ASL interpreter but deliberately failed to do so.

The hospital’s petition for certiorari to the United States Supreme Court was recently denied.

While the patient did not claim that the hospital violated the Patient Protection and Affordable Care Act (ACA), note that Section 1557 of the ACA prohibits hospitals and other providers that receive federal funding from discriminating against individuals because of race, color, national origin, sex, age, or disability and can provide an additional basis for liability.

Update on Class Action Challenging Placement of Medicare Patients in Observation Status 

The decision about whether a Medicare beneficiary should be admitted to a hospital as an inpatient (for which services are covered by Medicare Part A) or placed in observation status (for which services are covered by Medicare Part B) can have significant financial consequences for the patient. For example, Medicare covers the cost of post-hospital care at a skilled nursing facility only if the individual was classified as an inpatient at the hospital for a period crossing at least two midnights. Official Medicare policy leaves the inpatient/observation status decision to the discretion of the treating physician, but the question of how much control the federal government actually exerts over the physician has been the subject of debate for nearly a decade.

In 2018, the District Court of Connecticut (Shea, J.) heard final pre-trial motions in a class action involving the rights of certain Medicare beneficiaries who were placed in observation status beginning in 2009. These patients spent multiple days in the hospital and were discharged to skilled nursing facilities, but because they had been designated as outpatients receiving observation services, they were forced to pay out of pocket for the care they received at the skilled nursing facilities. In 2011, these patients sued the U.S. Department of Health and Human Services (HHS) on their own behalf and on behalf of other patients similarly situated, arguing that their failure to receive written notice of the placement in observation status, and the lack of any administrative right to challenge the placement, violated both the Medicare Act and federal due process. The District Court decided in HHS’ favor. The plaintiffs appealed the decision in 2015 to the Second Circuit Court of Appeals, which affirmed that the Medicare Act was not violated, but held that the plaintiffs were entitled to test whether they possessed a constitutionally-protected property interest in being admitted to the hospital as inpatients.

The District Court separately issued two final pretrial rulings in 2019 and the case was heard on the merits in August, but a decision has not yet been rendered. (Alexander v. Azar, 370 F.Supp.3d 302 (D. Conn. 2019); 396 F.Supp.3d 242 (D. Conn. 2019))

This case has been in litigation for so long that all of the original plaintiffs are deceased. The  District Court’s decision is expected to be issued sometime this year.

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