Recognized Complications of Treatment and Informed Consent – An Update

In a December 18, 2018 posting in this blog, the recent oral argument before the Pennsylvania Supreme Court in the case of Mitchell v. Shikora regarding exclusion of evidence of risks and complications of a surgical procedure was highlighted.  On June 18, 2019, a divided Pennsylvania Supreme Court filed its decision, 2019 WL 2504475, reversing the decision of the intermediate appellate Superior Court[1] which would exclude such evidence and reinstating the judgment entered on the jury verdict in favor of the defendant. The opinion helpfully illustrates how risk information can be presented at trial in support of a defense that the adverse outcome was a known complication of the procedure and not the result of negligence.

            The factual context of the case arose from a laparoscopic hysterectomy performed in 2016.  The operation began with the physician making an incision into the patient’s abdomen.  In the course of proceeding to separate the layers of tissue, the attending obstetrician-gynecologist detected fecal odor and realized the woman’s colon had been cut.  He discontinued the hysterectomy procedure and called for a general surgeon to evaluate the patient and promptly perform an operation to repair the bowel injury.  This was done with an emergency loop ileostomy during which a portion of the patient’s bowel was brought to the surface and connected to an external pouch.  The patient wore the colostomy bag for an unspecified time.

            In the opinion for the court, Justice Todd reiterated fundamental components of medical liability law.  She noted that ordinarily, a physician did not guarantee the result of treatment and that there was no presumption or inference of negligence merely because a medical procedure resulted in an unfortunate or adverse outcome.  “Indeed, the idea that complications may arise through no negligence of a physician is so ingrained in our jurisprudence that it is often included as part of the instructions to the jury.”  She emphasized, however, that an action for lack of informed consent as to possible risks and outcomes was distinct from a claim of medical negligence.  The justice emphasized a proposition that is widely accepted and had been adopted in the unanimous prior decision of Brady v. Urbas, 111 A.3d 1155 (Pa. 2015), that admitting evidence that a patient had been informed of certain risks in a pure negligence action could erroneously suggest to the jury that the patient consented to negligent care and could confuse the jury and cause it to stray from assessing the central question of whether the physician’s actions conformed to the applicable standard of care.  Nonetheless, evidence of risks and complications was properly admitted elucidating the standard of care issues.

Determining what constitutes the standard of care is complicated, involving considerations of anatomy and medical procedures, and attention to a procedure’s risks and benefits. Further, a range of conduct may fall within the standard of care. While evidence that a specific injury is a known risk or complication does not definitively establish or disprove negligence, it is axiomatic that complications may arise even in the absence of negligence. We emphasize that “[t]he art of healing frequently calls for a balancing of risks and dangers to a patient. Consequently, if injury results from the course adopted, where no negligence or fault is present, liability should not be imposed upon the institution or agency actually seeking to assist the patient.” …. As a result, risks and complications evidence may clarify the applicable standard of care, and may be essential to provide, in this area, a complete picture of that standard, as well as whether such standard was breached. Stated another way, risks and complications evidence may assist the jury in determining whether the harm suffered was more or less likely to be the result of negligence. Therefore, it may aid the jury in determining both the standard of care and whether the physician’s conduct deviated from the standard of care.

The court concluded that the testimony of the defense expert went beyond the specific injury and included the conduct of the physician and the circumstances surrounding that conduct to allow an evaluation of whether the defendant had met the standard of care and the reasons why the injury could occur in the absence of negligence.  This testimony provides a fine example of an expert providing the “whys and wherefores” that New Jersey courts have so frequently identified as essential to sustain expert testimony against a charge of being an inadmissible net opinion.[2]  It quoted this testimony at some length:

I think that really the only place in this case where one can find fault is in the initial incision into the abdomen, and during that incision is the one time during the surgery — I think you have seen pictures of how narrow a site you are going down — it is the one time in the surgery when you are making an incision into a space where you can’t really see where you are going.

You know, you are cutting through tissue that occasionally you can see through it, but very often you can’t see through it at all. Everybody is very different. Most of the time, especially going through a little incision, the more fat, the deeper the longer that incision is. That initial incision, I’ve done over 8,000 case[s] and every time I make that incision, I hold my breath[ ] because you never know 100 percent that that is going to be okay. I feel much better once you are inside and seeing, but that initial incision is when you can’t be sure.

The benefit of doing it that way is that the patient will recover faster, have less pain, sort of both the surgeons and patients are happy to take that risk because it is going to benefit them in the long run; but there is going to be those times where that incision is going to cause a problem like in this case.

Half the time that doesn’t work, half the time you just have to make sure you are pulling up the thinnest amount of tissue you possibly can after you make that cut and you are hoping that there isn’t anything on the other side.

I mean there’s always something behind the peritoneum there. There’s not like there is free space. There’s not gas in your abdomen naturally. There’s always bowel, there’s always something right on the other side of that, whether it is large intestine or small intestine. It is always an incision where there can be injury.

            It also noted this exchange during cross-examination:

Q. [Mitchell’s Counsel] I see. And, doctor, as far as the literature is concerned — well, strike that. I think you had indicated in your report that the injury that Miss Mitchell sustained was unavoidable. That’s what you said?

A. Correct.

Q. If it was unavoidable it would happen every time, wouldn’t it?

A. No.

Q. Well, I don’t understand if it is unavoidable, wouldn’t it happen every time?

A. Not necessarily. It is unavoidable in the sense that he did everything he could to avoid it, yet it still happened, so, therefore, it was unavoidable.

            In contrast, in her concurring and dissenting opinion, Justice Donohue had a different perception of this evidence: “Informing the jury that a particular injury is one that can occur during the procedure does not make it more or less likely that the injury occurred as a result of the doctor’s negligence, rendering it entirely irrelevant.”  She also emphasized that the plaintiff’s expert had identified “a crucial step” of transvisualization of the abdomen before making the cut that had not been done by the defendant.  While the defense expert acknowledged that there was no evidence that the operating surgeons had transvisualized the peritoneum before making the cut, he denied that this step was required by the standard of care.  Justice Donohue distilled the defense expert’s testimony to the following: if transvisualization is not possible (or simply not done), proceed with caution and hope for the best.  She framed the issue for the jury as whether transvisualization was required by the standard of care or not. “If so, the failure to do so was negligent; if not, it was not. These questions should have been decided exclusively on this evidence of what was expected of the surgeon in this case.”  

            There was another separate opinion in Mitchell with Justice Wechtconcurring in the result but highlighting four areas of concern.  These included an emphasis on the “imperative that judges carefully police the line between evidence of consent and evidence of risks and complications” and the exclusion of any possible use of the informed consent form that had been signed by the patient even if limited to reading the possible complications set forth in it.  He also noted that studies or literature should not be admissible “if they do not distinguish between complications that occurred as a result of negligence and those that resulted from some other cause.”  He agreed with the majority’s conclusion that this objection went to the weight rather than the admissibility of this evidence and that the parties should have the opportunity to challenge the studies in a Frye hearing.[3]    He ended with his opinion commenting on the inclusion in one submission of a report that had labeled Philadelphia as “The City of Unbrotherly Torts” and putting that city and its courts on a list of “Judicial Hellholes.”  In an admonition to those filing amicus brief, he wrote:

While amici, like parties, are free (and indeed duty-bound) to engage in zealous advocacy, it seems imprudent to rely for such advocacy upon unduly caustic or inflammatory materials that insult or cast aspersions upon the judicial system itself, or upon its component parts. Those filing briefs as friends of the court should consider this as they engage in their important work of informing and enriching the perspectives available to appellate jurists as the latter perform their jurisprudential duties.


[1]  In the blog piece, the citation for the intermediate opinion was stated incorrectly.  The correct citation is 161 A.3d 970 (Pa. Super. 2017).

[2]  The “why and wherefore” or “whys and wherefores” epigram can be found repeatedly in published and unpublished opinions.  However, the more expressive catchphrase would be the “why and therefore” for communicating the basis for the expert’s conclusion.

[3]  Pennsylvania has declined to adopt the standards for expert testimony developed in Daubert v. Merrill Dow and adheres to the test promulgated in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923).  Betz v. Pneumo Abex, LLC, 44 A.3d 27, 53 (Pa. 2012).

Physician Impairment and Burnout: An Alternative Perspective

Thinking about physician impairment and burnout rarely leads to happy thoughts.  Another side of the topic’s coin, however, can be found.  Nonetheless, the difficulties presented by such matters are appropriate starting points for a blog such as this one. 

Pursuant to the Health Care Professional Responsibility and Reporting Enhancement Act (the “Act”), both health care entities and health care professionals in New Jersey have reporting obligations in the event a practitioner demonstrates impairment that would present danger to a patient or to the public.  Reporting to the New Jersey Board of Medical Examiners of such impairment or unprofessional conduct is codified in N.J.S.A. 45:1-37 and for health care entities in N.J.S.A.  26:2H-12.2b et seq.  Common overlapping regulations are found at N.J.A.C. 13:45E-1 et seq.  Such reporting can lead to an appearance before the Medical Practitioner Review Panel and action by the Board of Medical Examiners.

While the Act does not define “impairment,” the regulations set forth the following: “‘Impairment’ means an inability to function at an acceptable level of competency, or lacking the capacity to continue to practice with the requisite skill, safety and judgment, as a result of alcohol or chemical use, psychiatric or emotional disorder, senility or a disabling physical disorder.”  N.J.A.C. 13:45E-2.1.  Physician impairment can spill over and lead to disruptive behavior, which is itself potentially reportable when it is such that “a prudent health care professional reasonably would believe is likely to adversely affect the ability of another health care professional to safely render patient care for which he or she is responsible.”  Id.  There are judicial decisions in New Jersey upholding hospital privileging action based on disruptive behavior.  Nanavati v. Burdette Tomlin Hospital, 107 N.J 240, 254 (1987); Courtney v. Shore Memorial Hospital, 245 N.J. Super. 138, 140-41 (App. Div. 1990).  The test is not “actual harm to patients” but rather that specific conduct “will probably have an adverse impact on patient care.”

At least since its 2008 Sentinel Event Alert, the potential for “disruptive behavior” adversely affecting patient safety has been the subject of commentary in connection with The Joint Commission’s standards.  But it has also been recognized that disruptive behavior may arise from psychiatric or emotional conditions.  While substance abuse has long been known to lead to disruptive behavior, impaired patterns of professional conduct can also result from stress, burnout, and depression.  See generally Brown, Goske & Johnson, “Beyond Substance Abuse: Stress, Burnout and Depression as Causes of Physician Impairment and Disruptive Behavior,” 6 J. Am. Coll. Radiol. 479 (2009).  The concept that “physician burnout” contributes to physician errors has its critics and challengers.  See, e.g., Lawson, “Burnout is Not Associated with Increased Medical Errors,” 93 Mayo Clinic Proceed. 1683 (2018).

But unquestionably, there is extensive literature concerning physician burnout and possible interventions. See, e.g., West, Dyrbye & Shanafelt, “Physician burnout: contributors, consequences and solutions,” 283 J. Internal Med. 516 (2018); Tawik, Profit, Morgenthaler et al., “Physician Burnout, Well-being, and Work Unit Safety Grades in Relationship to Reported Medical Errors,” 93 Mayo Clinic Proceed. 1571 (2018). This includes greater attention to well-being.  Indeed, reviews of this topic with an emphasis on physician wellness and work-life integration are the focus of a recent issue of MDAdvisor which has a series of six articles dealing with different aspects.  

A definitely more uplifting approach to the issue of physician burnout and impairment with a different vantage point is provided in the March 14, 2019 issue of the New England Journal of Medicine:  Schor, “When Sparks Fly – Or How Birding Beat My Burnout,” 380 N.E.J.M. 997 (2019).  The author is a geriatrics specialist who wrote that the part of him that had “long reveled in making a ‘great diagnosis’” was burning out and depriving him of professional satisfaction because of the felt need to balance professionalism and compassion.  The intellectual high in making an esoteric but lethal diagnosis so to give the physician a great day was repressed in view of what was possibly the worst day for the patient. 

He describes the fortuitous circumstance of discovering birding while having stopped during a bike ride in Sandy Hook, New Jersey.  The generosity of an experienced birder having loaned him the use of his binoculars provided a new vista and set him on a path to diagnose different species of birds and to once again feel the joy of a differential diagnosis that worked out well.  Dr. Schor provides an elegant illustration of this phenomenon:

The least sandpiper and the semipalmated sandpiper are almost identical “peeps,” but for the slightly richer, chocolatey brown back on the former and the darker legs on the latter. Similarly, distinguishing two closely related vasculitides, such as Behçet’s and Buerger’s diseases, depends on the caliber of the blood vessel that’s inflamed. Making such fine distinctions is what birders and diagnosticians have in common.

            Hopefully his suggestions take wing and soar.

Recognized Complications of Treatment and Informed Consent Evidence

It is axiomatic that negligence ordinarily will not be presumed from the occurrence of injury, but must be proven and with the burden in this regard being on the plaintiff. The standard jury charge for medical malpractice cases in New Jersey continues to reflect long-standing case law: “The law recognizes that the practice of medicine is not an exact science. Therefore, the practice of medicine according to accepted medical standards may not prevent a poor or unanticipated result.” Model Civil Jury Charges 5.50A. See, e.g., Schueler v. Strelinger, 43 N.J. 330, 346 (1964).  The poor outcome may be the result of a deviation from accepted standards of care – negligence in its most basic sense.  But when the physician has not disclosed the potential for an adverse event or complication, the doctrine of informed consent can be invoked.  Informed consent is considered a form of medical negligence. Teilhaber v. Greene, 320 N.J. Super. 453, 463 (App. Div. 1999).  New Jersey permits pleadings with alternative and inconsistent theories. R.4:5-6. In many instances, both theories are pursued.  But in some cases involving a treatment complication, no claim for lack of informed consent is advanced.

This has led to a substantial body of case law that holds, in broad terms, that in the absence of a claim for lack of informed consent, evidence of disclosure of risks to the plaintiff patient is irrelevant and should be excluded.  With the decision in Ehrlich v. Sorokin, 451 N.J. Super. 119 (App. Div. 2017), New Jersey joined what has become the majority view.  This was reiterated in a more recent New Jersey decision that was not approved for publication and as to which the Supreme Court denied certification on January 23, 2018. Granovsky v. Chagares, 2017 WL 3480771, 2017 N.J. Super. Unpub. LEXIS 2074 (App. Div. Aug. 15, 2017), certif. denied, 232 N.J. 85 (2018).

The patient in Ehrlich, experiencing back pain and rectal bleeding, had undergone a diagnostic colonoscopy procedure by Dr. Sorokin in 2003 that identified the presence of a polyp in her colon. The patient declined a recommendation for surgery and elected to undergo removal with a colonoscope.  This was done by a different gastroenterologist who referred the patient back to Dr. Sorokin for follow-up monitoring and surveillance of her GI status.  Several procedures were done by Dr. Sorokin for recurrent polyps using different techniques.  Following one of these procedures in which an electric charge was used to vaporize the polyp, the patient was found to have a perforation of her colon and peritonitis.  She underwent surgery to remove a portion of her colon.

Plaintiff intended to proceed at trial only on the assertion of a deviation from accepted standards of care in the manner in which the defendant gastroenterologist had performed this particular procedure.  Plaintiff’s counsel moved in limine to exclude informed consent evidence.  The motion was denied.  The patient was cross-examined with the signed consent form that stated that the procedure could result in injury with perforation and hospitalization for further care.  The jury returned a verdict that the defendant did not breach the standard of care.

In reversing, the Appellate Division found that in the absence of an allegation of lack of informed consent, the information concerning risk disclosure was irrelevant and prejudicial.  Drawing on the analysis developed in various out-of-state cases, the court indicated that a jury’s knowledge of a treatment’s risks, where lack of informed consent is not an issue, does not help the plaintiff prove negligence. Nor does it help the defendant show he was not negligent. In such a case, the admission of evidence concerning a plaintiff’s consent could only serve to confuse the jury because the jury could conclude that consent to the surgery was tantamount to consent to the injury which resulted from that surgery. In effect, the jury could conclude that consent amounted to a waiver of liability for negligence, which is plainly wrong. A patient does not consent to being treated negligently.  Similarly, in Granovsky, the surgeon did an operation to remove the patient’s gallbladder through a laparoscopic cholecystectomy procedure.  In the course of the operation, the common bile duct was cut.  The defense experts stated that common bile duct injuries were known complications of this type of surgery that occur in the absence of negligence.  The defendant also introduced and relied on the signed surgical consent which made reference to possible injury to the common bile duct requiring surgical repair.  The Appellate Division reversed.  It followed the reasoning of Ehrlich that the patient’s knowledge of the risk of bile duct injury was irrelevant to whether the defendant had performed the operation in accordance with accepted standards of care with the risk of confusing the jury.

Neither Ehrlich nor Granovsky established an absolute prohibition on presenting evidence of known risks of a surgical procedure in general as opposed to the discussions with the particular patient.  Indeed, the Granovsky panel noted that in support of an argument that common bile duct injuries can occur in the absence of negligence, a defendant could present evidence of the known risks of a surgical procedure.  The documented presence of the complication on the patient’s surgical consent limits the perception that the claim of “recognized complication” was an after-the-fact excuse.  It also provides a very tangible piece of physical evidence to be used in cross-examining an opposing expert who denies the status of the outcome as a recognized complication of the procedure.

But the Appellate Division indicated that such evidence should be presented “through the testimony of a defense expert regarding the risks of procedure, without reference to what advice the expert provides or what plaintiff was told of the risks of the surgery.” 2017 WL 3480771 at *9, 2017 N.J. Super. Unpub. LEXIS 2074 at *27-28. See also Hayes v. Camel, 927 A.2d 880, 890 (Conn. 2007); Waller v. Aggarwal, 688 N.E.2d 274, 276 (Ohio Ct. App. 1996).  In Brady v. Urbas, 111 A.2d 1155, 1162 (Pa. 2015), the Pennsylvania Supreme Court had seemed to agree with the admissibility of evidence of general risks and complications in a medical negligence claim.

But the Pennsylvania intermediate appellate court in Mitchell v. Shikora, 161 A.2d 90 (Pa. Super. 2017), rejected the admissibility of such evidence even when presented through experts:

The fact that one of the risks and complications of the laparoscopic hysterectomy, i.e., the perforation of the bowel, was the injury suffered by Mitchell does not make it more or less probable that Dr. Shikora conformed to the proper standard of care for a laparoscopic hysterectomy and was negligent. … Moreover, the evidence would tend to mislead and/or confuse the jury by leading it to believe that Mitchell’s injuries were simply the result of the risks and complications of the surgery. … Thus, the risks and complications evidence was immaterial to the issue of whether Defendants’ treatment of Mitchell met the standard of care. Accordingly, we hold that the evidence was inadmissible.   [Id. at 975.]

The Pennsylvania Supreme Court agreed to review this decision and whether it conflicted with the earlier Brady v. Urbas ruling. 174 A.2d 573 (2017). Oral argument took place on October 23, 2018. The forthcoming opinion is something to watch for. Some commentators have remarked that without being able to introduce evidence that a complication occurs in the absence of negligence, the potential is created that the medical negligence claim will be turned into one of strict liability. The occurrence of the complication without the context of how it occurs without breach of the standard of care would effectively create a presumption of liability. Such an outcome in the Mitchell case would represent a tectonic shift in principles of medical liability law.

Transparency and the Avoidance of Corruption: Revisions to New Jersey’s Ban on Gifts From Pharmaceutical Companies

In October 2017, we had a post about a proposed regulation promulgated by the New Jersey Division of Consumer Affairs that would place limitations on payments from pharmaceutical companies to health care providers. The rule did not provide for enforcement or penalties to be assessed against manufacturers, but rather prohibited providers from “accepting” such payments.  The affected licensees were physicians, podiatrists, physician assistants, advanced practice nurses, dentists, and optometrists.  The proposed regulation became effective as of January 16, 2018 and is codified at N.J.A.C. 13:45J-1 et seq. The regulation was one of several initiatives taken by then Attorney General Christopher Porrino to combat the opioid epidemic.  Under the regulation, a New Jersey prescriber may not accept, directly or indirectly, any of the following from a pharmaceutical manufacturer or a manufacturer’s agent:

  • Any financial benefit or benefit-in-kind, including, but not limited to, gifts, payments, stock, stock options, grants, scholarships, subsidies, and charitable contributions, except as specifically permitted by the regulation.
  • Any entertainment or recreational items (e.g., tickets to theater or sporting events, or leisure or vacation trips).
  • Items of value that do not advance disease or treatment education, including, but not limited to:

Pens, note pads, clipboards, mugs, or other items with a company or product logo;

Items intended for the personal benefit of the prescriber or staff, such as floral arrangements, sporting equipment, or artwork;

Any payment in cash or a cash equivalent; or

Any payment or direct subsidy to a non-faculty prescriber to support attendance at, as remuneration for time spent attending, or for the costs of travel, lodging, or other personal expenses associated with attending, any education event or a promotional activity.

  • Any meals unless permitted as described in the regulation with a cap in the amount of $15.

Following Governor Phil Murphy’s election, in the Spring of 2018, the new administration assessed the operation of the rule and its dampening effect on physician participation in continuing education programs. Recognizing the purpose of the regulation as establishing uniform standard to minimize conflicts of interests between health care providers and pharmaceutical manufacturers so that patient care would be guided by the unbiased, best judgment of prescribers, Attorney General Gurbir S. Grewal proposed revisions to the regulation. These appeared in the August 6, 2018 New Jersey Register.  The changes are rather limited. They modify the definition of “modest meal” from a blanket $15 per prescriber to $15 for breakfast and lunch and $30 for dinner during the calendar year 2018 with the amount in future years tied to the consumer price index. Experience with the regulation had shown the absolute $15 limit was “unrealistic.” Another change is to remove the concept of “modest meals” and the limits when associated with educational events even where a manufacturer was the sponsor “provided the meals facilitate the educational program to maximize prescriber learning, including information about disease states and treatment approaches.” Any such meals are not counted in determining the annual cap of $10,000 on payments from pharmaceutical companies for services in connection with presentations as speakers at promotional activities, participation on advisory boards, and consulting arrangements established by the original regulation. The revisions further clarified that the regulation applied only to health care providers with active New Jersey licenses who were involved with patient care in New Jersey and would not apply to an employee of a pharmaceutical company.

The time for comment on the proposed revisions closes as of October 5, 2018.

The revisions to the New Jersey regulation are being considered when a spotlight is once more on the issue of conflicts of interest among prominent physicians and the pharmaceutical industry. On September 13, 2018, the New York Times reported the resignation of Dr. Jose Baselga, the chief medical officer of Memorial Sloan Kettering Cancer Center, for failure to disclose millions of dollars he had received from drug companies while publishing articles about these products in medical journals. The article included a comment that “Ethicists say that outside relationships with companies can shape the way studies are designed and medications are prescribed to patients, allowing bias to influence medical practice.  Reporting those ties allows the public, other scientists and doctors to evaluate their research and weigh potential conflicts.”

The same issue of the New York Times contained an Op-Ed piece by Marcia Angell, M.D. entitled “Transparency Hasn’t Stopped Drug Companies From Corrupting Medical Research.”  Dr. Angell had been the editor of the New England Journal of Medicine for over 20 years and was at the NEJM in 1984 when it became the first major journal to require authors to disclose financial ties to companies that could be affected by the publication of their research.  In her Times piece, Dr. Angell reviewed the reasons that manufacturers became financially involved with medical researchers and how financial ties could bias the work.  She concluded with these comments:

Disclosure is better than no disclosure, but it does not eliminate the conflict of interest. It’s simply a way of saying caveat emptor, and leaving it to readers to decide whether the research was biased.  But most people – even doctors and science reporters – aren’t really equipped to make those judgments, particularly when data are suppressed.

I would suggest two reforms. First, researchers at academic medical centers should not accept any payments other than research support from drug companies, and that support should have no strings attached – no control over the design, interpretation and publication of trial results.  We should go back to arm’s length grants.

Second, doctors should not accept gifts from drug companies, even small ones, and they should pay for their own meetings and continuing education, as is standard in other professions. They can afford it.

In the meantime, those of us who read these studies should remain skeptical about them until several different trials reach the same result.

These controversies have been present for a long time with various measures taken to protect patients and keep physicians focused on patient care. Some of that history was reviewed in an earlier blog post from 2014 with the commencement of the Obamacare Physician Payment Sunshine Act which encompasses more than research physicians.  In 2016, New Jersey ranked 11th in the nation for the most non-research payments to health care professionals based on the Open Payments data.[1]

The New Jersey Board of Medical Examiners has brought disciplinary proceedings against physicians for failure to make disclosures of payments received from medical product manufacturers. It has recently continued to bring disciplinary actions based on violation of its kickback rule, N.J.A.C. 13:35-6.17(c)(1), prohibiting licensees from receiving any form of compensation that “a reasonable person would recognize as having been given” to promote the prescribing of a product for patient use.[2]

The efforts of the New Jersey Attorney General to study and explore appropriate ways to deal with these conflicts of interests issues can be traced back to at least 2007 and such efforts are obviously continuing. This may be like the sound of one hand clapping or at least a voice crying in the wilderness.  But it should be noted that the Hippocratic Oath – dating back to the Fourth or Fifth Century B.C. and still administered to modern day physicians – includes a provision that “into whatever homes I go, I will enter them for the benefit of the sick, avoiding any voluntary act of impropriety or corruption.”

[1]  Helman, Farrar, Horton, Segobiano & Dingler, Physician, Feed Thyself: New Jersey’s Restriction On Pharmaceutical Payments (Jan. 24, 2018) available at https://www.navigant.com/insights/life-sciences-consulting/2018/new-jerseys-restriction-on-pharmaceutical-payments

[2]   See, e.g., In the Matter of Kenneth Sun, M.D. (Aug. 27, 2018)(between 2013 and 2015 more than $117,000 in payments) available at  https://www.njconsumeraffairs.gov/Actions/20180827_25MA06318400.pdf.

Supplemental Comments on the Voiding of the Medicaid Work Requirement

The decision of the Federal District Court for the District of Columbia in Stewart v. Azar voiding the approval of the Kentucky work requirements for Medicaid eligibility was the subject of a recent blog here on July 17. There are two subsequent publications worth noting to supplement discussion of the issue.

The judgment implementing Judge Boasberg’s ruling was entered on June 28, 2018. Pursuant to Rule 4 of the Federal Rules of Appellate Procedure, there is a 60-day period following entry of judgment in a matter in which the United States Government is a party for the filing of a notice of appeal as of right.

Although the time for appeal has not expired, from a July 30 Health Affairs blog reporting on the posting of an announcement at Medicaid.gov, it appears that rather than appealing Judge Boasberg’s ruling, CMS is reopening the comment period on the proposed waiver of Medicaid requirements in the Kentucky demonstration program at issue. The manifest purpose is to supplement and develop the record to show that the program is likely to assist in promoting Medicaid’s coverage objective.  This is the type of information that Judge Boasberg had indicated the agency had not obtained or utilized in the first place.

That blog author provides a comprehensive review of the deficiencies in the original administrative process and how the agency had “sidestepped” its obligations.

Rather than weighing the value of the project in light of its impact on coverage—which [Judge Boasberg] concluded, is Medicaid’s core purpose as stated in the statute itself—officials simply had created a new program objective, to improve health. Without citing to the statute or offering any supporting evidence, the HHS approval letter simply claimed that (1) Medicaid’s purpose is to improve health; (2) work improves health; and therefore (3) mandatory work requirements coupled with other coverage restrictions are likely to promote Medicaid’s purpose.

The blog goes on to identify several types of highly relevant evidence that should be developed to sustain the validity of the Section 1115 waiver analysis and decision-making. The first is the quantification of the cumulative impact of the key demonstration components, including the precise nature of a steady, year-round work requirement (hours worked per week; weeks worked per year); the premiums; the reporting rules; the lock-out periods; the reinstatement opportunities; and the benefit and coverage restrictions. The second would examine the impact of the loss of coverage among the affected population on their access and utilization of medical services resources and resulting health outcomes.  A third type of evidence concerns if, and to what extent, any of these work requirements for deeply impoverished people actually can result in gains in employment, income and financial independence of the type that makes health care and insurance coverage affordable, with access to coverage pathways. “In other words, what is required is solid evidence regarding the mitigating effects of a non-consensual experiment that places Medicaid coverage at high risk for tens of thousands, if not hundreds of thousands, of working-age adults. This evidence cannot simply be tautological claims about the health benefits of work and community engagement.”

This notion of “mitigating effects” of placing Medicaid coverage at risk was picked up and further developed in a very recent August 8 article in the New England Journal of Medicine entitled “Mitigating the Risks of Medicaid Work Requirements.”  The three authors are from the University of Michigan’s Medical School, School of Public Health, and the Gerald R. Ford School of Public Policy.  As a reminder, Michigan is one of the states in addition to the Kentucky program in the case before Judge Boasberg that had received Section 1115 waiver approval from the Secretary of HHS.

These physician authors identified several policy questions concerning the work requirements that “deserve more attention.” That list starts with a determination of the potential health consequences of work requirements for persons enrolled in Medicaid.  They question the role to be played by physicians in determining whether a person is to be exempted from work requirements on the basis of some medical reason. Lastly, they pose the question of how to reduce the medical risks for enrollees who could be harmed by losing their coverage as a result of the Medicaid work requirements.

They questioned the original observation by CMS that work and community engagement were “associated with better health” and that working would improve the health of Medicaid recipients, commenting that this asserted association could be due primarily to healthier adults being able to find employment rather than the work producing the improved health. In this circumstance, the health harms would outweigh uncertain health benefits for those who got jobs.  They cited their own 2016 survey of 4000 Medicaid expansion enrollees.  While nearly half were employed in some capacity, among the others who were either out of work or unable to work, the survey found that many were likely to be more than 50 years old and to report being in fair or poor health, having a mental health condition, or having health-related functional limitations.  They emphasized that while a work requirement might serve to motivate younger recipients, it presents a serious risk of harm to older enrollees or those with chronic conditions if they were to lose their Medicaid coverage under the Obamacare expansion and be unable to afford effective medical care and services.  Although some proposed providing for exemptions for “medically frail” persons, the standards and processes for determining such exemptions were undefined.  This lack of specific governmental guidance on exemptions potentially placed physicians, especially primary care physicians, in a difficult ethical situation of choosing between doing harm to patients or providing inaccurate and thus dishonest assessments of their condition and functionality.

The New England Journal of Medicine authors provided further commentary on ways that work requirements might be handled to mitigate medical risks.  In addition to narrative remarks, the article contains the following summary block:

RECOMMENDATIONS FOR STATE AND FEDERAL POLICYMAKERS TO REDUCE THE HEALTH RISKS ASSOCIATED WITH MEDICAID WORK REQUIREMENTS

Limit the initial implementation to adults under 50 years of age who are covered by Medicaid expansion, since they are less likely than older adults and those covered by traditional Medicaid to have chronic health conditions and functional limitations that will be adversely affected by loss of Medicaid coverage.

Provide clear guidance to physicians on health conditions, functional limitations, and caregiving responsibilities for household members with disabilities that will exempt enrollees from work requirements.

Provide job training, employment referrals, and support for work-related transportation and childcare for enrollees subject to work requirements.

Make the reporting of compliance with work requirements less frequent and more flexible to account for fluctuating work hours, seasonal employment, and temporary gaps in employment.

 Tempering criticisms of the Medicaid work requirements, they conclude that the programs need to focus on enrollees who are healthy and functionally able to work and on whether effective work-related training and supports are implemented. “Without such tailoring and support, the health risks for enrollees who lose Medicaid coverage are likely to substantially outweigh the economic and health benefits of blunt incentives for enrollees to work.” This would fail to promote the objectives of Medicaid and would be significantly contrary to the main purpose of Medicaid: to provide medical assistance to low-income adults under age 65.

 

New Jersey Supreme Court Explicitly Adopts Federal Daubert Standard for Expert Testimony

In the unanimous opinion of In re Accutane Litigation (Docket No. A-25-17) released on August 1, 2018, the New Jersey Supreme Court embraced the federal standards for admissibility of expert opinion testimony developed in the decision of Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and its progeny. Daubert principles set aside the traditional requirement of “general acceptance” for the admissibility of expert opinion and moved to a multi-factorial approach evaluating an expert’s methodology in arriving at that opinion.   A key element in the Daubert approach was an emphasis on the “gate-keeping” function of the trial judge and frequent use of hearings pursuant to Rule 104 concerning admissibility of scientific and technical evidence.

There has been a long-standing view that the New Jersey standards for expert testimony are different and somewhat more relaxed. In May 2013, the Supreme Court had held a public hearing on the Report of the Committee on the Rules of Evidence requesting whether or not it should pursue a re-evaluation of the New Jersey jurisprudence that it had begun in 2002 and previously concluded “works well and should not be altered.”  No action was taken at that time.

In the extensive 85-page opinion authored by Justice Jaynee LaVecchia, the Court undertook a comprehensive review of Daubert generally and the New Jersey approach that had begun with Rubanick v. Witco Chemical Co., 125 N.J. 421 (1991) and Landrigan v. Celotex Corp., 127 N.J. 404 (1992).  Justice LaVecchia wrote:

We perceive little distinction between Daubert’s principles regarding expert testimony and our own, and believe that its factors for assessing the reliability of expert testimony will aid our trial courts in their role as the gatekeeper of scientific expert testimony in civil cases. Accordingly, we now reconcile our standard under N.J.R.E. 702, and relatedly N.J.R.E. 703, with the federal Daubert standard to incorporate its factors for civil cases.

Nevertheless, the Court commented that in adopting the use of Daubert factors, “we stop short of declaring ourselves a ‘Daubert jurisdiction.’”  In doing so, it preserved its claim to being a vanguard jurisdiction in the area of expert opinion evidence.  This also assured that both federal and other state decisions under Daubert would be persuasive authority at best and not binding on New Jersey judges.

The opinion summarized the pertinent but non-exhaustive list of factors for a court to consider as follows:

  1. Whether the scientific theory can be, or at any time has been, tested;
  2. Whether the scientific theory has been subjected to peer review and publication, noting that publication is one form of peer review, but is not a “sine qua non”;
  3. Whether there is any known or potential rate of error and whether there exists any standards for maintaining or controlling the technique’s operation; and
  4. Whether there does exist a general acceptance in the scientific community about the scientific theory.

It repeatedly emphasized the need for determining the reliability of the methodology used by the expert to reach the opinion and not the opinion’s conclusion.

This ruling was made in the context of toxic tort litigation where the primary issue was whether or not the drug Accutane caused the development of Crohn’s disease in patients using the drug to treat acne with significant use of epidemiological studies. The trial court had excluded plaintiff’s experts after conducting a two-week Rule 104 hearing and entered an order dismissing 2,076 claims with prejudice.  That determination was reversed by the Appellate Division in a published opinion.  451 N.J. Super. 153 (App. Div. 2017).  The Supreme Court in turn reversed the judgment that had reversed the exclusion of the experts’ testimony.

That product liability context may have implications for the future applicability of the decision and the use of Daubert factors. Moreover, the Court specifically noted that it was not incorporating this standard for admissibility of expert opinion into the criminal context.  “[T]o date, we retain the general acceptance test for reliability in criminal matters.”  In addition, the Daubert factors and virtually all of the New Jersey cases reviewed in the Accutane opinion involved issues of “medical cause-effect expert testimony.”

The applicability of Daubert to expert testimony concerning standard of care opinions has been variable in other jurisdictions in the relatively few decisions considering the issue.  In Berk v. St. Vincent’s Hosp. & Med. Ctr., 380 F. Supp. 2d 334, 352 (S.D.N.Y. 2005), the court concluded that the plaintiff’s expert report together with the expert’s testimony that the defendant surgeon had “departed from the applicable standard of care fail the Daubert reliability test” since it had “too great a gap between the data and the opinion.”   But on the other hand, in Reese v. Stroh, 907 P.2d 282, 286 (Wash. 1995), the Washington Supreme Court held that Daubert would not be applied to standard of care testimony that was based on the expert’s “experience and knowledge, not a novel scientific theory.”  Similarly, in Palandjian v. Foster, 108 842 N.E. 2d 916, 923 (Mass. 2006), Massachusetts’ highest court held that there was no need for a Daubert evaluation of standard of care testimony “based on the expert’s knowledge of the care provided by other qualified physicians, not on scientific theory or research: ‘How physicians practice medicine is a fact, not an opinion derived from data or other scientific inquiry by employing a recognized methodology.’”  (Quoting Cramm, Ascertaining Customary Care in Malpractice Cases: Asking Those Who Know, 37 Wake Forest L.Rev. 699, 725 (2002)). However, testimony as to increased risk similarly to diagnosis and causation might require such an evaluation since it requires the application of science to patient care.

These are issues that have yet to be dealt with in any reported New Jersey opinion. The Accutane decision may indeed be broadly applicable.  Certainly, aspects of the opinion should be readily transferrable.  These include the Court’s emphatic instruction that a trial court’s determination, after a full Rule 104 hearing, to exclude expert testimony on unreliability grounds was subject on appeal to an abuse of discretion standard and that the Appellate Division had “veer[ed] off” that standard and erred when it determined that a trial court’s determination regarding expert testimony was entitled to “somewhat less deference.” This should encourage the development of a record at the trial level with the kind of “robust analysis” of the expert opinions that had received the strong endorsement by the Court in Accutane. It provides a model to follow.

BRUGALETTA V. GARCIA: NEW JERSEY SUPREME COURT ISSUES OPINION ON THE PATIENT SAFETY ACT

I.  INTRODUCTION

In Brugaletta v. Garcia, (A-66-16) (079056) (July 25, 2018), the New Jersey Supreme Court, in a 6-1 decision, decided several matters of first impression under the New Jersey Patient Safety Act (“PSA”), N.J.S.A. 26:2H-12.23 to 12.25(c).  A close reading of the opinion is a necessity for any medical malpractice practitioner and especially for hospital defense counsel.

II.  FACTS

On January 12, 2013, plaintiff Janell Brugaletta went to the emergency room of Chilton Memorial Hospital (“CMH”) suffering from a week’s fever together with abdominal and body pains.  After being admitted to the hospital, she was diagnosed with a pelvic abscess due to a perforated appendix.  The abscess was drained, relieving the patient from abdominal pain, but her leg pain worsened.

A diagnosis of developing necrotizing fasciitis in her lower body led to several more surgeries.  During this time, her physician discovered that the plaintiff had missed dosages of an antibiotic he had ordered.  While the omission was noted in her medical record, the patient was never told of the missed antibiotic.

After a three week admission, the plaintiff’s abscess and abdominal pain had resolved, but she claimed to be suffering from residual pain and permanent injuries in her lower body.  Two years after her admission, she brought suit against her treating physician and CMH.  There was no allegation concerning the missed antibiotic doses.

III.  LOWER COURT PROCEEDINGS

        A.  Trial Court

During the course of discovery, plaintiff served interrogatories on CMH seeking the details and substance of any statement “regarding this lawsuit.”  CMH identified two reports, but claimed privilege based on the PSA.  Plaintiff filed a motion to compel, and CMH countered with a motion for a protective order.  The trial court heard arguments on the motions and conducted an in-camera review of the documents.

The court ultimately ordered the production of one of the reports, marked DCP-1.  The trial court found that the report was created pursuant to the PSA.  The court determined, however, that contrary to the conclusion of the hospital’s patient safety committee, the patient had suffered a Serious Preventable Adverse Event (“SPAE”) which triggered certain reporting obligations to the New Jersey Department of Health (“NJDOH”) that CMH had failed to meet.  Plaintiff contended, among other things, that the failure to report pierced the applicability of any privilege under the PSA. The trial court fashioned a remedy requiring that the hospital produce a redacted version of DCP-1, removing any self-critical analysis, but leaving factual statements, and ordering that the hospital report the SPAE to the DOH.  The court stayed the order while the parties pursued appeals.

        B.  Appellate Division

The Appellate Division reversed the trial court’s order. The Appellate Division held that the only condition to establishing privilege under the PSA is that the hospital performs the self-critical analysis in compliance with the PSA and its implementing regulations.

The Appellate Division further ruled that the trial court had erroneously concluded that an SPAE had occurred and, therefore, erred in ordering the hospital to report to the DOH.  To find that an SPAE had occurred, a supporting expert opinion, lacking in this instance, was essential.  The New Jersey Supreme Court granted plaintiff’s motion for leave to appeal.

IV.  THE NEW JERSEY SUPREME COURT’S RULING

On appeal, the Supreme Court upheld the Appellate Division’s decision that “the only precondition to the application of the PSA’s privilege is whether the hospital performed its self-critical analysis in procedural compliance with [the PSA] and its implementing regulations.”  So long as “procedural compliance is present”, the statute’s “broad” privilege protections apply.    This “broad” protection shields from discovery the process of self-critical analysis, beginning to end, “including its outcome.” Commenting that the PSA created “an absolute privilege,” the Supreme Court held that a trial court is prohibited from ordering the disclosure of documents prepared during the process of self-analysis, even in a redacted form.  The privilege encompasses any SPAE report to the DOH.

The Supreme Court set forth the procedure which must be followed when a privilege is asserted.  A party who claims privilege over a requested document may withhold the document by asserting the privilege and describing the nature of the information withheld.  On a motion to compel, the trial court must conduct an in-camera review of the document over which the privilege is claimed and make specific rulings as to the applicability of this privilege.  The court must determine that the privilege was properly invoked and that it bars disclosure of the information sought.

Furthermore, the Supreme Court held that both the trial court and Appellate Division erred in determining whether the hospital committee was mistaken in determining that no SPAE had occurred. It is the responsibility of the DOH to oversee hospitals in this regard, and it is empowered to impose civil monetary penalties for certain violations of the statute.    According to the Court, “[t]he Legislature inserted no role for a trial court to play in reviewing the SPAE determination …”  Therefore, the trial court erred in endeavoring to determine that a SPAE occurred, in ordering that a redacted version of the privileged document be disclosed by the hospital to its litigation adversary and by ordering the hospital to report the SPAE to the DOH.

At the same time, the Court reiterated, “[T]he PSA did not abrogate existing health care law and does not immunize from discovery information that would otherwise be discoverable.”    Although the PSA privilege protects certain documents containing self-critical analysis from discovery, it does not prohibit discovery of “the raw underlying factual material” found in medical records.  In fact, the hospital produced over 4500 pages of records, but the key information lay within 9 pages buried therein.

Addressing the rules of discovery and the mere production of documents in response to an interrogatory, the Supreme Court observed that the trial court should have ordered the defendant hospital to create “a narrative that specifies for the requesting party where the responsive information may be found.” While the Supreme Court is not suggesting that such a narrative “be routinely provided,” one may be warranted where the responsive information is located somewhere throughout voluminous records of the responding party and the burden of providing the specification is less on the responding party than on the requesting party to mine the records for the information.

V.  ANALYSIS

In Brugaletta, the Supreme Court established the breadth of the PSA privilege.  Assuming compliance with the strictures of the PSA, the privilege envelops the entire self-critical analytical process.  The privilege “unconditionally protects the process of self-critical analysis, the analysis’s results and any resulting reports,” including SPAE reports made to the DOH in compliance with the PSA. A provider’s failure to report a SPAE does not vitiate the privilege.

In order to claim the privilege, it must be asserted with specificity, and the nature of the information must be described.  Upon a motion to compel, it is incumbent upon the trial court to review the allegedly privileged documents in camera in order to determine that the privilege was properly asserted and covers the subject document.  The trial court is then obligated to rule upon the privilege claim with specificity.

The Supreme Court reiterated that underlying factual information related to an incident available from other sources remains fully discoverable.  The Supreme Court endorsed a remedy requiring a responding party to create a narrative for the requesting party describing where responsive information can be found in voluminous records.

In Brugaletta, the Supreme Court clarified that the state privilege envelops the entire self-critical process.  This is similar to the federal privilege under the Patient Safety and Quality Improvement Act of 2005 (“PSQIA”) pursuant to which deliberations and analysis conducted within a provider’s patient safety evaluation system are privileged.  At the same time, the PSA offers protection to mandated SPAEs which the PSQIA likely would not.  Under the PSQIA, state-mandated reporting requirements cannot be satisfied with privileged material.

The Continuing Viability of the Obamacare Medicaid Expansion

Resilient if nothing else, the Patient Protection and Affordability Care Act (“ACA”) continues in force. On June 29, 2018, Judge James E. Boasberg of the United States District Court for the District of Columbia rejected the attempt by the United States Department of Health and Human Services (“HHS”) to defend the grant of a waiver of Medicaid standards to the State of Kentucky for a demonstration program that would have required recipients to work or participate in other qualifying activities for at least 80 hours a month in order to be eligible for coverage.  In Stewart v. Azar, 2018 WL 3203384 (D.D.C. 2018), Judge Boasberg denied the defendants’ motion for summary judgment and granted the plaintiffs’ cross-motion for summary judgment to vacate the Secretary of HHS’ approval of the entire program that had been presented by Kentucky.  This ruling is likely to impact other states, including Arkansas, New Hampshire, Michigan, Alabama, and Indiana, which have received waivers to include work requirements of various sorts.

The United States Supreme Court had upheld the constitutionality of the requirement in the ACA that all Americans have affordable health insurance coverage in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012). While seven justices had at first declared the mandatory Medicaid eligibility expansion unconstitutional, Chief Justice John Roberts in a portion of the opinion supported by five justices prevented the outright elimination of the expansion by fashioning a remedy that simply limited the federal government’s enforcement powers over its provisions and allowed states not to proceed with expanding Medicaid without losing all of their federal Medicaid funding.  Before the ACA, the Medicaid program was designed to cover medical services for four particular categories of the needy: the disabled, the blind, the elderly, and needy families with dependent children. With the enactment of the ACA, Medicaid became a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level.  Judge Boasberg described the Medicaid expansion as “a central component of that statute” which, as was noted in the NFIB opinion of the Chief Justice, allowed states to provide “‘health care to all citizens whose income falls below a certain threshold.’”  With the enactment of the ACA, Medicaid was “transformed” and was “no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage.”

Whether or not to adopt the Medicaid expansion has continued to be a matter of dispute across the country. Since the 2010 enactment of the ACA, according to the Kaiser Family Foundation, as of July 2018, expansion programs were adopted in 32 states, including New Jersey.

Kentucky adopted the Medicaid expansion by executive order of the governor issued in 2014. This had the effect of reducing the uninsured rate from 17% in 2013 to just under 7% in 2015 and providing for a number of preventive services.  However, with the change in presidential administrations, the then Secretary of HHS and the Administrator of the Centers for Medicare and Medicaid Services encouraged states to submit applications for waiver from some of the Medicaid program’s coverage requirements, especially with regard to the expansion populations and the implementation of work requirements for beneficiaries. Section 1115 of the Social Security Act had long permitted the Secretary to approve “experimental, pilot, or demonstration programs” that would otherwise be outside of the requirements of Medicaid.  In July 2017, Kentucky submitted an experimental plan that included “Kentucky HEALTH” which imposed the 80-hour monthly work requirement on the expansion population as well as an increase in premiums to be paid, reporting requirements, and penalties for non-emergency use of emergency department facilities.

The plaintiffs in Stewart were 15 Kentucky residents enrolled in the state Medicaid program.  They filed a class action complaint challenging many aspects of the program.  The evidential record before the court estimated that 95,000 people in Kentucky would lose their Medicaid coverage under the program.

In analyzing the claims for relief, Judge Boasberg emphasized that pursuant to 42 U.S.C. § 1315(a), the Secretary could only approve those demonstration projects that were “likely to assist in promoting the objectives of [Medicaid].” The court addressed the standard of review to be employed.  While acknowledging that the Secretary’s judgment concerning waivers was entitled to deference, Judge Boasberg demonstrated that use of the “arbitrary and capricious” standard could be a deft and exacting analytical tool.  He emphasized that agency action could be characterized as “arbitrary and capricious” if the agency failed to examine relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.  “Courts, accordingly, ‘do not defer to the agency’s conclusory or unsupported suppositions.’”   And no deference is due to an agency’s post hoc rationalizations advanced as a litigation position.

The court noted that one of the primary objectives of the Medicaid program was “providing medical assistance.” It continued: “The Medicaid statute ‘defines “medical assistance” as “payment of part or all of the cost” of medical “care and services” for a defined set of individuals.’” Using that definition, it found a congressional intent to enable each state, as far as practicable, to provide “payment of part or all of the cost of medical care and services.”   With the enactment of the ACA in 2010, Congress expanded the Medicaid program to provide medical assistance for a new population:  low-income adults under 65 who would not otherwise qualify.

But the Secretary did not address these factors. Rather, the supposed justifications were that the project “would improve health outcomes, promote increased upward mobility and improved quality of life, increase individual engagements in health decisions, and prepare individuals who transition to commercial health insurance coverage to be successful in this transition.”  Accepting that those might be “worthy goals,” Judge Boasberg commented that there was “a notable omission from the list.”  Namely, whether the program “would help provide health coverage for Medicaid beneficiaries.”   Furthermore, the Secretary had failed to analyze whether the program would cause recipients to lose coverage or whether it would promote coverage.  Judge Boasberg found the congressional intent in these circumstances to be self-evident:

Here, the Medicaid statute — taken as a whole — confirms that Congress intended to provide medical assistance to the expansion population. The ACA amended Section 1396a(a)(10)’s mandatory population to include all individuals whose income fell below prescribed levels. In so doing, it placed this group on equal footing with other “vulnerable” populations, requiring that states afford them “full benefits.” … Under this regime, states must provide “medical assistance for all services covered under the State plan under this subchapter that is not less in amount, duration, or scope, or is determined by the Secretary to be substantially equivalent, to the medical assistance available for [other individuals]” covered under the Act. … Regardless of whether the Secretary can ultimately waive that requirement, he must start with the presumption that the expansion group is on par with other protected populations.

At the end of the day, even if the Secretary could properly consider other factors — such as health, cost, or self-sufficiency — his “failure to address” a “salient factor” in the Act — i.e., furnishing medical assistance — renders his approval arbitrary and capricious.

The court determined that the appropriate remedy was to vacate the Secretary’s approval of the program with its work requirement and other provisions and to remand the matter to the agency.

The adequacy of the modest reimbursement from the Medicaid program continues to be a matter of controversy. But the positive impact of the Medicaid expansion is well documented.  With the increased access to medical care, there are better health outcomes as a result of primary and preventive care services. The amount of uncompensated and charity care provided by hospitals has been reduced.  R. Rudowitz & L. Antonisse, Implications of the ACA Medicaid Expansion: A Look at the Data and Evidence (May 2018). Hospitals in states that have adopted the Medicaid expansion are less likely to close for financial reasons because of the revenue flow. See generally R.C. Lindrooth, M.C. Perraillon, R.Y. Hardy & G.J. Tung, Understanding the Relationship Between Medicaid Expansions And Hospital Closures, 37 Health Affairs 111 (2018).

The Affidavit of Merit: A Moment of Kaizen?

On December 14, 2017, the Supreme Court released its opinion in A.T. v. Cohen, another in a series of opinions issued by the Court concerning the Affidavit of Merit Statute in the context of professional liability litigation.  Under this statute, plaintiffs have 60 days from the filing of an answer to a professional malpractice complaint to submit an affidavit of merit from an appropriately licensed person supporting the validity of the claim. The Legislature enacted the statute in an effort to weed out non-meritorious claims rather quickly.  The statute authorizes an additional period of 60 days for plaintiffs to submit the affidavit. Extensions to the 120-day limit are routinely, if not automatically, granted in practice.  The Affidavit of Merit statute states that failure to provide the required affidavit “shall be deemed a failure to state a cause of action” and result in dismissal.  The Court has consistently ruled that in the absence of extraordinary circumstances, the dismissal would be with prejudice.

Following the original enactment of N.J.S.A. 2A:53A-26 et seq. in 1995, the Court has issued at least 9 opinions concerning the applicability and enforcement of the statute.  Since the 2004 adoption of certain enhanced features concerning expert witnesses in cases involving board-certified specialist in the Patients First Act, N.J.S.A. 2A:53A-41, the Court rendered at least five more decisions in this area.  There is an even more substantial body of case law in Appellate Division opinions.   The cases have ranged from the complete lack of a supporting affidavit through late submission of an affidavit sometime due to counsel overlooking the dissemination of an otherwise timely document, submission of an affidavit from an inappropriately credentialed affiant, and delays by defense counsel well beyond the outside 120-day due date.  The decisions frequently invoke “substantial compliance,” “waiver,” “estoppel” or “extraordinary circumstances” to avoid dismissal or at least dismissal with prejudice.  Nonetheless, the issues of compliance with and enforcement of the Affidavit of Merit statute has been described as a “vexing and recurring issue.” Meehan v. Antonellis, 226 N.J. 216, 220 (2016).

The issues in the most recent case involved a minor child as the primary plaintiff who had sustained an Erb’s palsy injury at birth in 2011.  The lawsuit based on this neurological impairment was filed within two years of her birth.  The complaint was filed by a New York law firm which included some New Jersey-admitted attorneys.  When a timely AOM was not filed, defense counsel moved for summary judgment of dismissal.  After the motion was filed, plaintiff’s counsel obtained and served an AOM from a seemingly appropriate expert OB-GYN but out of time.  Plaintiff’s counsel requested an adjournment, which was granted and then substituted out to a new attorney who recognized the untimeliness of the AOM and cross-moved to dismiss voluntarily without prejudice pursuant to R.4:37-1(b) with the intention of re-filing since the statute of limitations applicable to a minor had not expired.  New counsel also requested that the summary judgment motion again be adjourned to assert a challenge to the constitutionality of the statute.  Those applications were denied as was a motion for reconsideration.

The Appellate Division affirmed the dismissal with prejudice.  It declined to address the constitutional challenge because it had not been properly raised below.  One judge dissented from the “with prejudice” dismissal but did not comment on the constitutionality of the AOM statute.

The Supreme Court reversed the dismissal and remanded the matter for further proceedings.  The case had a compelling factual matrix with an injured minor with many years left before expiration of the statute of limitations and a presumptively valid claim in light of the untimely but uncontradicted expert affidavit.  Leading up to the consideration of A.T., there was something of a groundswell of support, including an Editorial in the New Jersey Law Journal, for the notion that dismissal with prejudice was grossly unfair and unnecessarily harsh and that the remedy should instead be dismissal without prejudice.  However, in ruling, the Court did not abandon the paradigm that an AOM-related dismissal should be “with prejudice.” It weighed a number of factors in arriving at this conclusion, including the impact of a without prejudice dismissal on a physician where there were many years left to run on the applicable statute of limitations and there was a known potential claim that might impair the physician’s ability to obtain statutorily mandated liability insurance in order to practice.

While the Court did find “extraordinary circumstances” justifying the continuation of the litigation, more significantly, it focused on the role of the court in the administration of the statute, emphasizing its 2003 decision in Ferreira v. Rancocas Orthopedic Associates, 178 N.J. 144 (2001), and its companion case of Knorr v. Smeal, 178 N.J. 169 (2001), and clarifying its ruling in Paragon Contractors, Inc. v. Peachtree Condo Ass’n, 202 N.J. 415 (2010). In Ferreira the Court had announced the establishment of discovery-stage case management conferences to encourage and facilitate compliance with the AMS requirements and to avoid dismissal of meritorious claims due to inadvertence while promoting the AMS goal of weeding out insubstantial claims.  It emphasized that it had intended such conferences within 90 days of the filing of an answer were to be “mandatory” unless waived by the parties based on submission of an acceptable affidavit.  The later Paragon decision that had warned that the lack of a Ferriera conference would not toll the time for submission of the affidavit but did not dispense with its requirement.  No Ferreira conference had been held in the A.T. lawsuit.

The Court chose to use its supervisory powers to deal with the recurrent problems concerning the AOM.  It noted the recent advancements and improvements in the New Jersey judiciary’s electronic case management system that would allow notification of counsel regarding the AOM requirement and the scheduling of a Ferreira case management conference.  Further details are to be forthcoming from the Administrative Office of the Courts.  The objective of the conference within 90 days is to identify and deal with any deficiency in the AOM process and to allow plaintiffs to demonstrate the merits of the case within the remaining time permitted under the statute.

The Court’s plan has great promise in a one-plaintiff-versus-one-defendant case.  However, the devil in the details is sure to emerge in the complexities of multiple defendant matters.  Most simply, without fault or wrongful intent, there can be delays and variability in effecting service of the complaint on all defendants.  This sets up the complexity because “[t]he time for filing the affidavit is calculated not from the date the complaint is filed but from the date of each defendant’s answer.” In re Petition of Hall, 147 N.J. 379, 391 (1997). Accord, Kubiak v. Robert Wood Johnson Univ. Hosp. 332 N.J. Super. 230, 236 (App. Div. 2000). The electronic case management system will need to track the filing of the multiple answers and the trial judge should be able to handle the multiple conferences through use of the late-19th Century invention known as the telephone.

In Gnapinsky v. Goldyn, 23 N.J. 243, 256 (1957), a dissenting Chief Justice Vanderbilt had stated:  “No attorney should get the idea that no matter how complacent or negligent he is with respect to abiding by the rules, neither he nor his client will suffer because the court will pull the chestnuts out of the fire and for the sake of justice to a personally blameless client permit a consideration of the matter on the merits.”  Nonetheless, the long-standing jurisprudence of the New Jersey Supreme Court is to favor disposition of a case on the merits rather than on the basis of some technical shortcoming, especially when attributable to counsel.  The A.T. decision is consistent with that jurisprudence.  And by inserting the court into the process of assuring compliance with the Affidavit of Merit statute early in the case, the objectives of preserving meritorious claims and weeding out insubstantial lawsuits takes on more robust substance.  This is a change for the better.  It is kaizen.

The A.T. matter has one other component worth noting.  Belatedly at the trial level, plaintiff’s counsel sought to challenge the constitutionality of the Affidavit of Merit Statute but was rebuffed for not having raised the issue in a timely fashion. For similar reasons, the Appellate Division majority noted the issue was not properly before it and did not address the contention.  The dissenting member of the panel made no analysis or comment regarding the supposed constitutional deficiencies.  Based primarily on the separation of powers doctrine, the unconstitutionality of the AMS and the related Patients First Act has been raised on a number of occasions, including in four Supreme Court matters since the seminal decision in Alan J. Cornblatt, P.A. v. Barrow, 153 N.J. 218 (1998), in which the contention was summarily rejected but in what would properly be characterized as dicta.  Since then the Supreme Court has manifested its interest in the issue by handling the constitutional challenges with footnotes or passing references without addressing the substance of the argument.

At the outset of the A.T. oral argument on September 25, 2016, the Chief Justice advised all counsel:  “We are here on the basis of the dissent and the constitutionality of the statute was not part of the appeal of right.  So to the extent part of any argument you want to present is that, please rest on your papers and proceed to focus on other items.”  There was no discussion of the constitutionality of the statute in the Court’s unanimous opinion and not even a mention of it having been asserted.  It remains to be seen if there will be any further attempts to flog what surely looks like a dead horse.

Revised Confidentiality Rules Under HIPAA Part 2 For Substance Use Disorder Patient Records

On January 3, 2018, the Substance Abuse and Mental Health Services Administration (SAMHSA) within the Department of Health and Human Services published its final rule revising confidentiality rules for substance use disorder treatment programs.   A review of the Part 2 regulations for such programs and their overlap with pertinent provisions of HIPAA was the subject of a recent post on this blog.

The effective date of the revised regulations is February 2, 2018 with the exception of one provision which has a compliance date of within two years of the effective date.  The agency indicated that “[t]hese changes are intended to better align the regulations with advances in the U.S. health care delivery system while retaining important privacy protections for individuals seeking treatment for substance use disorders.”  An important aspect of this effort was aligning the substance use regulations with HIPAA and HITECH while recognizing the Part 2 regulations provide “more stringent federal protections” to safeguard individuals from discrimination and the legal consequences of improper disclosure.

The prior Part 2 regulations included a strict prohibition on redisclosure of information that is disclosed in the first instance with a patient’s consent.   SAMSHA’s new regulation approved the use of an abbreviated notice of prohibition of redisclosure which was intended to help the notice fit within space limitations of free-text fields in electronic health record systems.

The new regulation also permits disclosures with written consent for payment and health care operations activities.  The germane language in this regard is in the preamble to the regulation to indicate that the catalog of such activities is illustrative rather than an exhaustive list.  SAMSHA sought to balance the protection of confidentiality with the legitimate need to disclose information to obtain the benefits of emerging health care models promoting integrated care and patient safety.  It pointed to the existing provision in 42 CFR § 2.13(a) that was intended to ensure that information is not shared more broadly than the purpose(s) for which the patient consents.

SAMSHA also addressed the applicability of the Part 2 regulations to business associates and subcontractors in a fashion similar to the HITECH regulations.  It stated that the agency did not intend at this time to have Part 2 regulations apply to business associates and subcontractors. However, the agency left the door open to further alignment with HIPAA indicating that additional changes were under consideration.

With these latest changes and the promise of more to possibly come in the future, providers subject to these regulations must be sensitive to their applicability and complexity given the significant repercussions that can come from violations of HIPAA Part 2.