Highlights of Notable Cases
The following lists some of the more notable cases in which the Litigation Center has been or is currently involved. View the case summaries in their entirety.
A. Holding Managed Care
Organizations (MCOs) liable for their actions
1. Challenging MCO attempts to avoid patient protections promised by state law
Rush Prudential v. Moran, 536 U.S. 355 (2002)
The case: The Supreme Court ruled that ERISA did not preempt the independent review provisions of the Illinois HMO Act. As a result, when Illinois HMOs deny insurance benefits to Illinois patients on the grounds that they are medically unnecessary, the patients have the right to have the HMO's decision reviewed by an independent physician, and the HMO is bound by the result of the independent review. The decision applies to all states that have independent review laws similar to the Illinois law.
AMA/Litigation Center support: The patient's lawyer, a former AMA employee, originally took the case because he knew of its importance to the AMA. The Litigation Center filed amicus curiae briefs supporting the patient in the appeals.
Kentucky Association of Health Plans v. Miller, 538 U.S. 329 (2003)
The case: The Supreme Court upheld the Kentucky "Any Willing Provider" laws against a claim that ERISA preempted them. The Court formulated a new test for upholding state insurance regulations against such challenges, and this test has helped lead to state laws that increase patient protections.
AMA/Litigation Center support: The Litigation Center filed an amicus curiae brief on behalf of the Kentucky Insurance Commissioner.
2. Challenging MCO payment practices
Adventist Health System v. Blue Cross and Blue Shield of Florida, 934 So.2d 602 (Fla. App. 2006)
The case: Adventist Health System, which owned a chain of hospitals in Florida, sued Blue Cross and Blue Shield of Florida (Florida Blue) under the Florida Emergency Services Statute (ESS), claiming that it had been underpaid for emergency services. The trial court ruled in favor of Florida Blue, without considering whether Florida Blue had violated the ESS payment requirements. It held that the ESS cannot be a basis for a lawsuit by a non-government entity, and that, even if it could, Adventist had not exhausted the administrative review process. Adventist appealed. The District Court of Appeal reversed the trial court, finding that the ESS implied a private right of action. It further held that Adventist was not required to exhaust its administrative remedies.
AMA/Litigation Center support: The Litigation Center filed an amicus curiae brief to support Adventist's interpretation of the ESS -- in favor of an implied private right of action.
American Medical Association v. United Healthcare, 588 F.Supp.2d 432 (S.D.N.Y)
The case: This class action lawsuit, which was filed on March 15, 2000, alleged that Ingenix Corp., a subsidiary of United Health Care Group (UHC), had developed a database to determine “usual, customary, and reasonable” (UCR) charges. The suit also alleged that the database had been derived from unreliable and insufficient data. The plaintiffs, including the American Medical Association, the Medical Society of the State of New York, and the Missouri State Medical Association, asserted that the UCR charges for certain procedures were substantially higher than UHC calculations. After years of litigation, UHC settled and paid $350 million to the plaintiffs.
Based largely on information provided by the plaintiffs in this lawsuit, the New York Attorney General undertook an investigation into the use by insurers of defective databases when determining UCR payments made to out-of-network healthcare providers. Following this investigation, the Attorney General ordered UHC to discontinue its defective database. Subsequently, the United States Senate Committee on Commerce, Science, and Transportation issued its own report decrying widespread deceptive practices in the health insurance industry. UHC paid $50 million to a not-for-profit corporation to fund a replacement for the Ingenix database. Other insurance companies also contributed to this effort, so the total amount paid for the new database was nearly $100 million.
AMA/Litigation Center support: The AMA was the lead plaintiff, along with the Medical Society of the State of New York and the Missouri State Medical Association.
Arkansas Blue Cross Blue Shield Lupron payments
The case: Blue Cross and Blue Shield of Arkansas (a Medicare fiscal intermediary) contended that it overpaid more than 100 urologists and oncologists in Oklahoma and New Mexico for the drug Lupron. Years later, it attempted to recover the alleged overpayments. The Litigation Center, along with the Oklahoma State Urological Association, the Oklahoma State Medical Association, and the New Mexico Medical Society, helped the physicians defend against the recovery attempt, arguing that the physicians did not know they were being overpaid, had relied upon the validity of the payments over a period of years, and were generally without fault. Ultimately, the federal Centers for Medicare & Medicaid Services (CMS) accepted the physicians' argument that they were "without fault" as to the purported overpayments. Accordingly, CMS advised the physicians that it would not allow Arkansas Blue's recovery attempt.
AMA/Litigation Center support: The Litigation Center contributed to the physicians' defense costs. The Litigation Center also had experience with similar claims made several years previously in Pennsylvania and North Carolina and was thus able to advise the physicians' attorney on strategy.
Medical Association of Georgia v. Blue Cross and Blue Shield of Georgia, 536 S.E.2d 184 (Ga. App. 2000)
The case: This was the first court decision in the United States that forced managed care organizations to disclose to physicians, in advance and in the absence of specific contractual provisions, how much they are to be paid for their services. Subsequently, the Georgia Insurance Commissioner required all insurance companies to disclose their payment methods in advance. In other states, health insurance companies have moved toward more complete disclosure.
AMA/Litigation Center support: The Litigation Center paid a substantial portion of the plaintiffs' fees and provided considerable strategic advice.
3. Protecting physicians against arbitrary terminations by MCOs
Potvin v. Metropolitan Life Insurance Co., 997 P.2d 1153 (Cal. 2000)
The case: Based on California common law, the California Supreme Court held that a managed care organization cannot terminate one of its panel physicians unless it accords that physician a fair hearing with basic due process protections.
AMA/Litigation Center support: The Litigation Center paid a portion of Dr. Potvin's attorneys fees. The Litigation Center also submitted amicus curiae briefs in the California Court of Appeal and in the California Supreme Court.
4. Tiered network
Washington State Medical Association v. Regence BlueShield (King Cty., Wash., Super.Ct.) (settled in 2007)
The case: Regence BlueShield, one of Washington State's largest managed care organizations, instituted a provider sub-network supposedly based on its analyses of quality and efficiency, but actually based on flawed measurement criteria. Regence withdrew the plan shortly after its introduction, but announced that it would reinstate the plan later. The Washington State Medical Association, the Litigation Center, and six individual physicians sued Regence, alleging violations of the Washington Unfair and Deceptive Business Practices statute, defamation, intentional interference with contract, and breach of contract. Under the settlement reached, Regence must allow WSMA to suggest more objective criteria for physician performance measurements in any new Select Network Plan. Also, any new plan must allow physicians to appeal their scores.
AMA/Litigation Center support: The Litigation Center, through the AMA, participated in the lawsuit as a plaintiff.
B. Protecting the integrity of the hospital medical staff
Medical staff of Community Memorial Hospital of San Buenaventura v. Community Memorial Hospital of San Buenaventura (Ventura County, Cal. Super. Ct.) (settled in 2004)
The case: The hospital medical staff fought for the right to govern itself against ongoing attempts by the hospital administration to control its activities. Ultimately, the parties reached a settlement providing that the medical staff, hospital administration and board of trustees must comply with all provisions of the medical staff bylaws, and that the hospital governing body must not unreasonably withhold approval of amendments to those bylaws adopted by the medical staff.
AMA/Litigation Center support: The Litigation Center provided financial support for the medical staff lawsuit. In addition, the Litigation Center and the California Medical Association joined in an amicus curiae brief, which emphasized the public interest in medical staff self governance.
Cathey v. Baptist Health (Pulaski City., Ark. Cir. Ct.) (settled in 2006)
The case: The issue in this case was whether Dr. Cathey, a gynecologist on staff at a Baptist Health hospital, could lose her privileges simply because her physician husband had an interest in a spine surgery hospital that competed with Baptist Health. Dr. Cathey sued Baptist Health for a court order preventing the termination of her privileges. Her complaint alleged that the Baptist Health Economic Credentialing Policy was an unlawful restraint of trade and in violation of the Arkansas Deceptive Trade Practices Act. The court temporarily enjoined Baptist Health from enforcing its policy against Dr. Cathey. The case ultimately settled.
AMA/Litigation Center support: The Litigation Center, along with the Arkansas Medical Society, provided financial support for Dr. Cathey's lawsuit.
Lawnwood Medical Center v. Lawnwood Medical Center Medical Staff, 990 So.2d 503 (Fla. 2008)
The case: Pursuant to Lawnwood Hospital's lobbying efforts, the Florida legislature enacted the "St. Lucie County Hospital Governance Law," which provides that "in the event of a conflict between bylaws of a hospital corporation's board of directors and a hospital's medical staff bylaws, the hospital board's bylaws shall prevail with respect to medical staff privileges, quality assurance, peer review, and contracts for hospital-based services." Under the Governance Law, the Lawnwood hospital board proposed changes to the medical staff bylaws, to confirm that it, rather than the medical staff, would control the areas delineated in the Governance Law. The medical staff and the hospital then sued each other, with the principal issue being the constitutionality of the Governance Law.
The case was ultimately appealed to the Florida Supreme Court, which found the Governance Law unconstitutional as special legislation. This appears to have been the first case in the United States to hold that medical staff bylaws are entitled to constitutional protection.
AMA/Litigation Center support: The Litigation Center contributed financially toward the medical staff's litigation expenses and filed amicus curiae briefs in both the District Court of Appeal and the Florida Supreme Court to support the medical staff. The Litigation Center attorney also participated in the oral argument in each of these courts.
Murphy v. Baptist Health, 2010 Ark. 358 (Ark. 2010)
The case: Baptist Health, the largest hospital system in Arkansas, adopted an economic credentialing policy, which provides that a physician who holds a direct or indirect ownership or investment interest in a competing hospital is ineligible for medical staff privileges at any Baptist Health hospital. A number of physicians, who are in apparent violation of the policy, sued to have the policy declared invalid. Following a two-week trial, the court ruled in favor of the plaintiffs, declaring the Baptist Health policy unconscionable and illegal and enjoining its enforcement. The opinion stated: "The heart of this case is the patient-physician relationship. The relationship is entitled to special protection."
Baptist Health appealed to the Arkansas Supreme Court. The Arkansas Supreme Court affirmed, finding that the hospital economic credentialing policy tortiously interfered with physicians' existing and prospective business relationships.
AMA/Litigation Center support: The AMA and the Arkansas Medical Society, representing the Litigation Center, intervened as additional plaintiffs in 2007 in the lawsuit. In addition to its direct participation in the trial of this case, the Litigation Center provided financial assistance to the physician plaintiffs.
C. Abusive litigation against physicians
Barbato v. Khetarpal, 2005 Ohio 5219 (Ohio App. 2005)
The case: Mr. and Mrs. Barbato sued the hospital at which Mr. Barbato had been treated for complications arising from a liver biopsy. They also sued Mr. Barbato's various physicians. One of those physicians, Dr. Maycon, was on call during Mr. Barbato's hospitalization. After the plaintiffs' medical expert refused to opine that Dr. Maycon had made any mistakes in his medical care, Dr. Maycon's counsel asked plaintiffs' counsel to dismiss Dr. Maycon from the case. Plaintiffs' counsel responded with a request for a monetary offer in exchange for such dismissal. Another (additional) counsel for the plaintiffs, however, later voluntarily dismissed Dr. Maycon from the case. On Dr. Maycon's motion, the trial court ordered sanctions against the counsel for plaintiffs who had sought money in exchange for a dismissal. The appellate court affirmed.
AMA/Litigation Center support: The Litigation Center, along with the Ohio State Medical Association, filed an amicus curiae brief to support Dr. Maycon.
McLeod v. Mt. Sinai, 116 Ohio St.3d 139 (Ohio 2007)
The case: In a medical malpractice suit claiming injuries arising during childbirth, a highly flamboyant plaintiff's lawyer secured a $30 million verdict. Half of this sum was based on non-economic damages. The trial judge ordered a new trial, finding that the jury's award had been excessive. The Cuyahoga County Court of Appeals reversed the trial court's order, but the Ohio Supreme Court reinstated the trial court order of a new trial, finding that there was competent, credible evidence to support the trial court's decision.
AMA/Litigation Center support: The AMA, along with the Ohio State Medical Association, filed an amicus curiae brief in the Ohio Supreme Court to support the trial court's mistrial order. It emphasized the harm to health care that can arise from excessive judgments in medical malpractice lawsuits, as well as the harm to the system of justice that can arise from allowing over-zealous attorneys to make prejudicial statements to juries.
Stewart v. Gibson, 508 F.3d 225 (5th Cir. 2007)
The case: Dr. Lawrence Stewart, a Mississippi physician, was mistakenly named as a defendant in a medical malpractice suit. A different Dr. Lawrence Stewart had treated the plaintiff. Dr. Stewart's attorney pointed out the error to the plaintiff's attorney, who nonetheless still refused to dismiss Dr. Stewart from the case. Dr. Stewart then obtained a judgment against the plaintiff's attorney. The United States Court of Appeals for the Fifth Circuit reduced the amount of the judgment but sustained the award itself.
AMA/Litigation Center support: The Litigation Center and the Mississippi State Medical Association each assisted Dr. Stewart with his litigation expenses.
D. Recognizing medicine's need for clinical trials to advance patient care
Heinrich v. Sweet, 308 F.3d 48 (1st Cir. 2002)
The case: This case recognized the need for clinical trials to advance medical research, so long as physicians obtain their patients' informed consents and follow accepted medical protocols. The court struck down an attempt to claim, many years after the fact and through hindsight, that a physician should have known that the clinical trials would fail.
AMA/Litigation Center support: The Litigation Center filed an amicus curiae brief on behalf of the physician's estate.
E. Providing medical care for the indigent
Oklahoma Chapter of the American College of Pediatrics v. Fogarty, 472 F.3d 1208 (10th Cir. 2007)
The case: This case contended that the Oklahoma Medicaid Program violated the "equal access" provision of the federal Medicaid law and deprived Medicaid recipients of their civil rights. Therefore, the suit maintained, the State of Oklahoma, if it were to continue the program, must increase its funding and reduce the bureaucratic barriers to access. The trial court ordered the Oklahoma Medicaid Program to reimburse covered, medically necessary physician services for children. However, the Tenth Circuit Court of Appeals reversed the trial court decision. Although the court result was ultimately unfavorable, the Oklahoma legislature substantially increased Medicaid funding during the period the trial court order was in effect and possibly for a considerable time thereafter.
AMA/Litigation Center support: The Litigation Center helped fund the plaintiffs' legal challenge and, with the American Academy of Pediatrics, filed an amicus curiae brief in the Tenth Circuit.
F. Expert witness testimony
Austin v. American Association of Neurological Surgeons, 253 F.3d 967 (7th Cir. 2001)
The case: The American Association of Neurological Surgeons (AANS) had suspended Dr. Austin from membership for six months because, it found, he had testified against another physician in a suit alleging professional liability without a reasonable basis for his testimony. This was a violation of the AANS code of ethics and expert witness guidelines. The Seventh Circuit Court of Appeals held that, since AANS had accorded Dr. Austin due process and had acted in good faith, he had no grounds for complaint. Furthermore, the AANS ethical standards provided an affirmative social benefit.
AMA/Litigation Center support: The Litigation Center filed an amicus curiae brief to support AANS. The brief argued that a physician's expert medical testimony is an aspect of medical practice. The AANS ethical code was therefore a legitimate, good faith guideline for proper professional conduct. The brief also argued that AANS had a constitutionally protected right to choose those persons with whom its members would associate.
G. Scope of practice
Texas Orthopaedic Association v. Texas State Board of Podiatric Medical Examiners, 254 S.W.3d 714 (Tex. App. 2008)
The case: The Texas law governing podiatry allows podiatrists to treat diseases and disorders "of the human foot." The Texas State Board of Podiatric Medical Examiners adopted a regulation that defined the "foot" as "all soft tissues, [including] muscles, nerves, vascular structures, tendons, ligaments, and any other anatomical structure that insert into the tibia and fibula in their articulation with the talus." The Texas Court of Appeals held the new regulation overbroad and invalid, because it would have allowed podiatrists to treat soft tissues that were not a part of the foot, as reasonably defined.
AMA/Litigation Center support: The Litigation Center contributed to the legal expenses of the Texas Orthopaedic Association incurred in fighting the new regulation. More importantly, the Litigation Center submitted an amicus curiae brief, whose rationale the Court of Appeals followed in deciding against the Board of Podiatric Medical Examiners.