Helpful Information

MEDICAL NEGLIGENCE AND
LOST CHANCE OF SURVIVAL CASES
AFTER AUGUST 28, 2005
 
NEW FRONTIER OR TWILIGHT ZONE?
 
By Sylvester "Sly" James, Jr.

House Bill 393, scheduled to take effect August 28, 2005, effects a number of substantial changes in medical negligence and lost chance of survival cases although there are no specific changes to the latter cause of action. Whereas before practitioners experienced in these areas of law had a clear understanding of the law, the changes that will take place on August 28 will open a new frontier of appellate litigation in these areas.

The most significant changes brought about by HB 393 concern:

1. Collateral source 490.715.1.5;

2. Venue 508.010.3-14;

3. Damages 537.090;

4. $350,000 cap 538.210-1;

5. Affidavit of Merit 538.225.2, 3, 5; and

6. Limitations on actions against non-profit health care providers.

I.  Collateral Source

Although 490.715.1 states, "No evidence of collateral sources shall be admissible other than such evidence provided for in this section," Section 5(1) and (2) states,

(1) Parties may introduce evidence of the value of the medical treatment rendered to a party that was reasonable, necessary, and a proximate result of the negligence of any party.

(2) In determining the value of the medical treatment rendered, there shall be a rebuttable presumption that the dollar amount necessary to satisfy the financial obligation to the health care provider represents the value of the medical treatment rendered. Upon motion of any party, the court may determine, outside the hearing of the jury, the value of the medical treatment rendered based upon additional evidence, including but not limited to:

(a) The medical bills incurred by a party;
(b) The amount actually paid for medical treatment rendered to a party;
(c) The amount or estimate of the amount of medical bills not paid which such party is obligated to pay to an entity in the event of a recovery.

Notwithstanding the foregoing, no evidence of collateral sources shall be made known to the jury in presenting the evidence of the value of the medical treatment rendered.

This modification of the collateral source rule may have a significant impact on the submission and recovery of actual damages claimed in a case. Under this modification, the defense may argue that the measure of damages for medical bills is not the bill itself, as previously used under existing Missouri law, but what was paid on the bill. This change could have severe implications for cases involving Medicare, Medicaid or private insurance plans, whereby the governmental entity pays only a fraction of the actual bill incurred, or the insurance company has a contract with the provider regarding payment of medical bills and expenses.

Section (2) does allow for a rebuttable presumption that the dollar amount necessary to pay the healthcare provider represents the value of the medical treatment. The court may, however, determine at a separate hearing outside of the jury, the actual value of the medical treatment based on the factors enumerated, however, those factors appear to be weighted towards the amounts paid rather than the amounts billed. There could be a significant difference between those two numbers.

There is a question as to whether at the point of a hearing, the parties may then argue to the jury that the court itself has made a determination as to the value of the medical services rendered, thereby buttressing the amount submitted to the jury with judicial credibility. Further, discovery on this issue will take on added significance in anticipation of the probable hearing and/or trial.

Finally, Medicare, Medicaid and third-party liability lien provisions in private insurance policies will be a factor in determining medical damages. It is unclear, however, how the lien repayment issue will affect the determination of the value of medical treatment.

II.  Venue

The changes made to the standard venue provision R.S.Mo. 508.010 affect not only medical malpractice and lost chance cases but all tort claims. Pursuant to 508.010.3,

The term "tort" shall include claims based upon improper health care under the provisions of Chapter 538, R.S.Mo.

Notwithstanding any other provision of law, in all actions in which there is any count alleging a tort and in which the plaintiff was injured in the State of Missouri, venue shall be in the county where the plaintiff was first injured by the wrongful acts or negligent conduct alleged in the action.

Practitioners should review and familiarize themselves with the other sections of the statute that establish venue for plaintiffs injured outside the State of Missouri, however, the most common situation will be one where the plaintiff(s) is injured within the State of Missouri.

Under this change of law, it is conceivable that a situation could develop where a person from St. Louis, for example, and another person from Kirksville who collide in the parking lot of the Truman Sports Complex while attending a Chiefs' game would find their case venued in Jackson County, Missouri, even though neither party resides in that county and it would be equally oppressive and inconvenient for both to litigate their matter there.

It is clear that the legislature changed this venue provision in response to complaints by corporate constituents in order to limit plaintiffs' ability to file suits in counties the legislature considers to be unattractive to those constituents, particularly Jackson County and St. Louis City. Unfortunately, however, this provision will play havoc with parties, their attorneys, and courts who may now find that they have more litigation than they had previously.

III.  Damages

Section 537.090 pertains to damages in a wrongful death action.

In every action brought under section 537.080, the trier of the facts may give to the party or parties entitled thereto such damages as the trier of the facts may deem fair and just for the death and loss thus occasioned, having regard to the pecuniary losses suffered by reason of the death, funeral expenses, and the reasonable value of the services, consortium, companionship, comfort, instruction, guidance, counsel, training, and support of which those on whose behalf suit may be brought have been deprived by reason of such death and without limiting such damages to those which would be sustained prior to attaining the age of majority by the deceased or by the person suffering any such loss. In addition, the trier of the facts may award such damages as the deceased may have suffered between the time of injury and the time of death and for the recovery of which the deceased might have maintained an action had death not ensued. The mitigating or aggravating circumstances attending the death may be considered by the trier of the facts, but damages for grief and bereavement by reason of the death shall not be recoverable.

The legislature has added this language to that section:

If the deceased was not employed full time and was at least 50% responsible for the care of one or more minors or disabled persons, or person over 65 years of age, there shall be a rebuttable presumption that the value of the care provided, regardless of the number of persons cared for, is equal to 110% of the state average weekly wage, as computed under Section 287.250, R.S.Mo. If the deceased is under age 18, there shall be a rebuttable presumption that the annual pecuniary losses suffered by reason of the death shall be calculated on the annual income of the deceased's parents, provided that if the deceased has only one parent earning income, then the calculations shall be based on such income, that if the deceased had two parents earning income, then the calculation shall be based on the average of the two incomes.

Kurt Krueger and John O. Ward have analyzed the effects and implications of the added provisions in their paper, "Evaluating Damages Under HB 393" presented at the MATA Summer Convention, June of 2005. In their paper, Krueger and Ward examined the impact of the statutory changes on such damage issues as Pre- and Post-Judgment Interest, Periodic Payments of Future Medical Costs, Deaths of a Minor and Deaths of Care Givers. I recommend that you review Krueger and Ward's paper as a primer on these subjects which are too broad to cover here, however, the changes regarding damages available for the death of a care giver are worthy of some discussion in this paper.

Krueger and Ward point out that "care" was not previously one of the items of damages listed in the string of damage words in 537.090. Although they correctly conclude that "care" would be considered an economic loss, they point out that legislature has not defined what constitutes "care provided." They also point out that the part of the statute addressing care provided to "persons over sixty-five years of age" does not depend on disability status, therefore, conceivably these damages are available to the spouse of an otherwise healthy decedent.

The statutory changes regarding allowable damages is a significant one that will be the subject of many future CLE presentations and much appellate litigation.

IV.  $350,000 Cap

Although the original $350,000 cap for non-pecuniary losses in medical negligence cases remains the same, the cap has been limited in that it is no longer applicable to each individual defendant, but to the class of the defendants in a case. The COLA has been removed such that the cap will no longer increase or change with the cost of living.

The statutory changes also include additional language designed specifically to eliminate the holding in Scott v. SSM Healthcare Services, 70 S.W.3d 560 (Mo. App. E.D. 2002) in that:

(1) Such limitations shall also apply to any individual or entity, or their employees or agents that provide, refer, coordinate, consults upon, or arrange for the delivery of healthcare services to the plaintiff; and

(2) Who is a defendant in a lawsuit brought against a health care provider under this chapter or who is a defendant in any lawsuit that arises out of the rendering of or the failure to render health care services.

(3) No individual or entity whose liability is limited by the provision of this chapter shall be liable to any plaintiff based on the actions or omissions of any other entity or person who is an employee of such individual or entity whose liability is limited by the provisions of this chapter.

Further, under subparagraph 2, in an automobile case for example, the defendant driver could use a third party action to bring in a health care provider based on an allegation that the health care provider rendered negligent subsequent care and treatment, thereby affecting the measure of damages, in that the automobile defendant would then also be covered by the $350,000 cap.

V.  Affidavit of Merit

Under 538.225, plaintiffs' attorneys filing medical negligence cases have been required to file an affidavit with the court stating that he or she had obtained a written opinion of a legally qualified health care provider. The new changes to the law codified in subsection 2 of the section, however, has made this requirement more burdensome and an area for mischief.

(2) As used in this section, the term "legally qualified healthcare provider" shall mean a health care provider licensed in this state or any other state in the same profession as the defendant and either actively practicing or within five years of retirement from actively practicing substantially the same specialty as the defendant.

(3) The affidavit shall state the name, address and qualifications of such health care providers to offer such opinion....

(7) Within 180 days after the filing of the petition, any defendant may file a motion to have the court examine in camera the aforesaid opinion, and if the court determines that the opinion fails to meet the requirements of this section, then the court shall conduct a hearing within 30 days to determine whether there is probable cause to believe that one or more qualified and competent health care providers will testify that the plaintiff was injured due to medical negligence by a defendant. If the court finds that there is no such probable cause, the court shall dismiss the petition and hold the plaintiff responsible for the payment of defendant's reasonable attorneys' fees and costs.

This requirement has opened the door to potential mischief. Would it be in the least surprising to find challenges to experts and their opinions based on an argument that they do not practice in substantially the same specialty as the defendant? Does a neurologist practice in substantially the same area as a pediatric neurologist? How about a neurosurgeon? Further, defendants may now challenge the initial opinion of the reviewing expert before discovery has begun and testimonial evidence is available for review. Finally, one may question the requirement that the name and address of the expert be provided and whether that information might be used by medical associations and certifying boards in an attempt to intimidate experts who testify on behalf of plaintiffs in medical negligence cases.

IV.  The Non-Profit Healthcare Provider Salvation Act

The legislature has also sought to provide blanket protection under section 538.228 to healthcare providers working in the non-profit sector:

Any physician licensed under Chapter 334 R.S.Mo. who provides medical treatment to a patient at a city or county health department organized under Chapter 192 R.S.Mo. or Chapter 205 R.S.Mo., a senior health department operating under a city charter, a combined city/county health department, or a non-profit community health center or other non-profit entity that solely provides free medical health care services and is qualified as exempt from federal taxation under Section 501(c)(3) of the Internal Revue Code of 1986, as amended, shall not be liable for any civil damages for acts or omissions unless the damages were occasioned by gross negligence or by willful or wanton acts or omissions by such physician in rendering such treatment or unless the physician maintained, at the time of treatment, liability insurance for such treatment, provided that such treatment:

(1) Shall not include the performance of an abortion; and
(2) Is certified in advance of the treatment as being rendered free of charge to the patient, with no compensation from any party or third-party provider, or any attempt to obtain compensation from any third-party provider.

Under this section, the poorest among us may be injured or die as a result of malpractice and have absolutely no redress unless it can be proven that the health care provider was grossly negligent, willful or wanton. How likely is that?

CONCLUSION

The changes brought about by HB 393 are numerous and drastic. Practice in areas affected by these changes will present substantial and perhaps hidden challenges to trial lawyers handling medical negligence and lost chance of survival cases. One can only wonder whether these changes represent a New Frontier or the Twilight Zone of future litigation.