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Health Law Outline

Under federal and Texas law, the only right to health care is when someone submits themselves
to a hospital that holds itself out as having emergency treatment.

The hospital must provide emergency medical treatment

The patient must be treated and stabilized: can’t leave them in danger of losing life or
limb or If they are in labor they must be treated

Licensing of Health Care Professionals

• there is widely varying rates of disciplinary actions among the states

• Medical licensure boards are often accused of “fraternal leniency”

• most cases of professional discipline involve substance abuse

• the number of disciplinary actions for sexual misconduct is increasing

• Congress established a data bank to provide an effective system for preventing

doctors with disciplinary history in one state from moving to another


Established by Congress in part to respond to the absence of an effective system

for preventing doctors with disciplinary history in one state from moving to
another and practicing until detected, if ever.

State licensing and disciplinary boards and hospitals are required to report
adverse actions to the Databank.

Boards have access to the databanks and hospitals must check the Databank for
physicians applying for staff privileges and periodically for physicians who hold
staff privileges.

Alternate or Complementary Medicine

Allopathy: the conventional system of medical treatment which employs remedies which
affect the body in a way opposite from the effect of the disease

Homeopathy: an alternate treatment method

In In re Guess, the doctor in the case practiced homeopathic medicine and was
charged with unprofessional conduct. The board concluded that his practice
departs from and does not conform to the acceptable and prevailing medical
practice in the state. The Doc argued that homeopathy is a legitimate system that
is practiced in other states. The court concluded that the legislative intent was to
prohibit any practice departing from acceptable and prevailing standards w/o
regard to whether the particular practice could be shown to endanger the public.

Quality Control Regulation of Health Care Institutions

The range of health care institutions includes: Hospitals, long term care facilities, home
health agencies, hospices, ambulatory surgical treatment centers

Even though the institutions do not practice medicine, the quality of the institution itself
can have a very significant impact on the quality of care

A state agency may regulate only under its statutory authority

In Mauceri v. Chassin, P operated a business out of home which provided

patients and their families with the names of home health aides. As P was not a
licensed home care services agency the Dept of Health sought to enjoin her
business. The court held that P’s business was an organization engaged in home
health aide services and must have a license. However, the court noted that
requiring small businesses to comply will only further raise medical costs.

Private Accreditation of Health Care Facilities

Private accreditation: a non-governmental, voluntary activity typically conducted by not-

for-profit associations

JCAHO and NCQA are the two leading organizations

Private accreditation provides a seal of approval, and virtually all U’S. hospitals are

Both state and federal governments have relied on JCAHO accreditation in their hospital
licensure and Medicare/Medicaid certification programs.

TX has accepted JCAHO accreditation in lieu of a state license.

Critics argue that accreditation programs only perform announced site visits and keep
negative evaluations confidential. Moreover, this is little public participation.

The Dept. of Health Regulation of Home Health Agencies (addresses some of the

• required to be accredited by JCAHO

• reserves option to remove JCAHO accreditation

• requires that survey reports be released

• implements unannounced visits

The Standard of Care

Medical malpractice is legal fault by a physician or surgeon. It arises from the failure of a
physician to provide the quality of care required by law.

A physician has a legal obligation to provide minimally sound judgement and render minimally
competent care in the course of the services he provides.

The question is: What are the minimal standards of care and judgement?

Hall v. Hilbun

Facts: The patient complained of abdominal discomfort. The doctor diagnosed

the problem and performed surgery with apparent success. The patient died 14
hours after the surgery. The husband brought a wrongful death action and argued
that the doctor failed to provide adequate post-operative care. The P introduced
experts who testified that the doctor did not provide the level of care that he
should have. The trial court excluded the expert’s evidence because he was not
familiar with the local standards.

Holding: In light of the nationalization of medical education and training and the
acknowledgement that reasonable expectations regarding a physicians skill and
knowledge are the same everywhere, the court adopts a competence based
national standard of care:

Given circumstances of each patient, each physician has non-delegable duty of

care to use his or her knowledge and therewith treat through maximum
reasonable medical recovery each patient, with such reasonable diligence, skill,
competence, and prudence as are practiced by minimally competent physicians
in same specialty or general field of practice throughout United States, who have
available to them same general facilities, services, equipment, and options;

However, with respect to the medical facilities and equipment, the old locality
rule still applies as in many rural areas certain facilities and equipment may not
be available. Moreover, where expert lives or where he or she practices his or her
profession has no relevance per se with respect to whether person may be
qualified and accepted by court as expert witness.

Practice Guidelines as Codified Standards of Care

Substantial regional variations exist in the use of many procedures, with no apparent
differences in outcome.

There have been recent substantial efforts toward standard setting and specifying
treatments for particular diseases.

Clinical pathways/guidelines: interdisciplinary plans of care that outline the ideal

sequence and timing of interventions for patients with a particular diagnosis,
procedure, or symptom.

Critical pathways: describe what will happen to a patient every day that the
patient is in the hospital

Such guidelines may reduce delays, reduce resource use and cut costs.

Since such guidelines might be evidence of the customary practice in the medical
profession, a doctor conforming to the guideline might be shielded from liability (on the
other hand, failure to conform to the guidelines could be negligence per se)

Plaintiffs have used such guidelines to their advantage in malpractice cases

Duties to Contest Reimbursement Limits

Sole practice is rapidly disappearing and health care is more constrained by explicit
financial limits

The use of prospective payment systems and the expansion of managed health care has
imposed substantial restraints on the formerly open fee for service system

prospective payment system: authority for rendering health care services must
obtained before medical care is rendered

The doctor must be aware of reimbursement constraints so he can properly advise the

In Wickline v. State, the patient had problems with her leg and received an
operation. The doctor requested that she remain hospitalized for another 8 days,
the payor (Medi-Cal) only authorized four days so the doctor recommend she be
discharged after four days. She had problems when she got home and her leg had
to be amputated. The doctor testified that she would not have lost her leg if she
had stayed in the hospital. As to who was responsible the court held that it was
for the patients treating physician to decide the course of treatment that was
medically necessary to treat the ailment. The court further held that when a
patient is harmed when care should have been provided but was not, should
recover from all those responsible, including third party payors when appropriate.
Here, however, the payor did not override the medical judgement of the doctor as
it was not given an opportunity to do so.

The system was designed to generate initial denials, which could be reversed
with further appeals. (SO the physician should resubmit and if he still does not
get approval then he can go to the patient, tell him he still needs care and give
him the choice to go home or pay – but HMO “gag orders can stop this)

Liability of Health Care Institutions

Traditionally the relationship of doctor to hospital was one of independent contractor

rather than employee. The hospital, therefore, was not regularly targeted as a defendant in
a medical malpractice suit.

Until recently hospitals have been considered as charitable institutions, and as such were
exempted from the general rule that a corporation is responsible for its employees.

The reasons for the charitable immunity were related to hospital difficulties in getting
liability insurance and the fiscal fragility of many hospitals in a time before extensive
government financing of health care.

The rule of charitable immunity has all but disappeared. see Bing v Thunig (“hospitals
should shoulder the responsibility borne by everyone else. There is no reason to continue
their exemption”)

Note: Governmental immunity still remains.

Two basic kinds of liability for a hospital: (1) Vicarious and (2) Direct

Vicarious Liability Doctrine (vicarious liability for hospital employees, doctors generally are
not employees)

Some of the theories

Captain of the Ship Doctrine: provides that a physician who exercise control and
authority over nurses and other health care professional should be held liable for their
negligence. It is a strict liability theory, often predicated on the surgeons “right to
control”, rather than actual control. (TX has rejected this doctrine)

The Control Test: In Berel v. HCA Health Services of Texas, Inc, the court held that if a
hospital retains the right to control the details of the work to be performed by a
contracting party, a master-servant relationship exists that will authorize the application
of the doctrine of respondent superior. It is the right to control, not actual control, that
gives rise to a duty to see that the independent contractor performs his work in a safe

Under this theory the P is trying to get to the hospital by saying that the hospital had the
right to control the actions of the physician and is therefore liable for his actions

In determining whether the hospital has a right to control the court will look at:

• whether the physician has an outside office/practice

• if he has an office in the hospital; whether he pays rent
• does hospital withhold from the docs checks
• does the doc bill separately

Ostensible agency (or apparent agency): one who employs an independent contractor to
perform services for another which are accepted in the reasonable belief that the services
are being rendered by the employer or by his servants, is subject to liability for the
physical harm caused by the negligence of the contractor in supplying such services, to
the same extent as though the employer were supplying them himself or by his servants

The basic notion is that if it appears to the patient that the doctor is a hospital
employee then the hospital can be held liable

In Bapist Memorial Hospital System v. Smith, Patient who suffered severe brain
damage when he went into cardio-respiratory arrest in emergency room after
administration of antibiotics brought medical malpractice suit against emergency
room doctor and hospital. He sought to get to the hospital through an ostensible
agency theory. The court held that the evidence was sufficient to warrant jury's
affirmative finding that hospital represented that doctor was hospital's agent or
employee and caused patient to justifiably rely on care and skill of doctor. The
evidence showed that hospital placed doctor in position of authority, with implied
representation that he was an employee of hospital; moreover, no notices in
emergency room hospital or on permission to treat form advised patient that
doctor was actually employed by professional association rather than hospital,
the clerk asked if he wanted to see one of “our” doctors, and there was a
magazine article which made references to the hospitals “skilled health care

The Emergence of Corporate Negligence (direct liability)

The hospital has the duty to protect patients from medical staff negligence.

A healthcare institution, whether a hospital, nursing home, or clinic, is liable for

negligence in:

• maintaining its facilities,

• providing and maintaining medical equipment,
• hiring, supervising, and retaining nurses and other staff, and
• failing to have in place procedures to protect patients.
• failing to provide adequate security
• negligent credentialing

Basic negligence principals govern hospital liability.

The professional duty of a hospital is primarily to provide a safe environment within

which diagnosis, treatment, and recovery can be carried out.

Hospitals must have minimum facility and support systems to treat the range of problems
and side effects that accompany procedures they offer.

Staffing must be adequate.

Equipment must be adequate for the services offered, although it need not be the state of
the art (there is a duty to transfer if the hospital lacks the necessary device)

Hospitals own safety rules or internal regulations may serve as a source of a standard of

Under the HCQIA, hospitals must check a central registry, a national database, before a
new staff appointment is made. The database contains info on disciplined physicians,
those who have been sued and those who have had their privileges revoked.

In Darling v. Charleston, the Patient broke his leg and went to emergency room
for treatment. The doctor put the cast on wrong (cut off circulation) and when
they took it off they cut his leg. The leg eventually had to be amputated. The
patient sued the hospital and alleged that the hospital was negligent in failing to
have a sufficient number of nurses for bedside care, failure of nurses to check on
patients condition, failure to review docs work, failure to adequately supervise
the doc. The court holds that a hospital is responsible to its patients for the
quality of the docs allowed to practice within the institution.

Hospitals are held to certain standards; if there employees see incompetent care
they have a duty to report it, plus the hospital has a duty to properly staff and
supervise its employees.

Managed Care Organizations

Managed care: a phrase used to describe organizational groupings that attempt to control
the utilization of health care services through a wide variety of techniques, including
prepayment by subscribers for services on a contract basis, use of physicians as
“gatekeepers” for hospital and specialty services.

Managed care organization: a reimbursement framework combined with a health care delivery
system, distinguished from traditional indemnity plans by the existence of a single entity
responsible for integrating and coordinating the financing and delivery of services that were once
divided between providers and payers.

MCS’s include: Health Maintenance Organizations (HMO’s) and independent practice

associations (IPA’s)

HMOs and IPA’s in theory face the same vicarious and corporate liability questions as

Direct Institutional Liability

Recent decisions addressing managed care liability indicates judicial willingness

to give providers leeway to practice a more conservative cost effective style.
Some designs of physician incentives to promote more cost-effective treatment
has, however, been tested.

In Bush v. Dake, the HMO employed a “pool” system, whereby

physicians were paid more if they referred less, P claimed that the system
was responsible for her misdiagnosis and that such a system violates
public policy. The court held that whether the system represents sound
public policy is a question for the legislature. However, the court also
held that the policy of paying a physician more for not referring a patient
was a factor that could be decided by a jury to determine whether the
incentives lead to malpractice.


Three relevant features that most managed care programs have from a liability
standpoint are:

1. such programs select a restricted group of health care professionals who

provide services to the program’s participants.
2. Such programs accept a fixed payment per subscriber, in exchange for
provision of necessary care.
3. Managed care organizations use a variety of strategies to ensure cost
effective care, such as altering physician incentives.

The Rationale For an Alternate System

Criticisms of the present tort system:

(1) It fails to compensate injured patients (most patients who are injured do not
bring malpractice suits)
(2) The tort system send an inaccurate deterrence signal (most docs think they
are haphazardly exposed to litigation regardless of skill)
(3) The admin and social costs of the malpractice system are too high
(4) Patient access to health care has been impaired by rising malpractice
insurance costs and by docs fears of suits

Proposed alternatives:

• no fault system
• medical practice guidelines as the standard of care
• alternative dispute resolution

The Contract Between Patient and Physician

Express and Implied Contract

Physicians in private practice may contract for their services as they see fit, and
retain substantial control over the extent of their contact with patients by:

• limiting their specialty, scope of practice or conditions under which

they will see patients
• transfer responsibility by referring patients to other specialists
• refuse to enter into a contract or treat patients

An implied contract is usually the basis of the relationship between a physician

and patient.

Once the P/P relationship has been created, physicians are subject to an
obligation of continuing attention.

When a patient goes to the doctor’s office, he is offering to enter into a contract
with the physician, when the physician examines the patient, he accepts the offer
and an implied contract is created.

While the relationship in many ways looks like a traditional contract it differs in
three ways:

1. the terms of the contract are largely fixed in advance of any

bargaining, by standard or customary practices that the physician
must follow at the risk of liability for malpractice

2. professional ethics impose fiduciary obligations on physicians in a

variety of ways

3. professionals are constrained in their ability to withdraw from their

contracts by judicial caselaw defining patient abandonment

While its OK to terminate the relationship it is not OK to abandon the patient.

In TX, the physician can terminate the relationship by giving the patient a reasonable
time to find another physician.

What is reasonable will vary depending on the nature of care:

• is it life threatening
• is it life altering (e.g. pregnancy)
• is it routine

General Rule: the doctor needs to give the patient approximately 30 days notice and will
have to treat them during that 30 day period

Physicians in Institutions

Physicians who practice in institutions must provide health care within the limits
of the health plan coverage or their employment contracts with the institution.

Physicians who are members of a health maintenance organization or a health

plan have a duty to treat plan members as a result of their contractual obligation
to the HMO.

Hand v. Tavera (duty arises by contract)

Facts: P (a Humana Health Care member) went to the Humana hospital

emergency room where the emergency room physician recommended
that he be hospitalized. The doctor responsible for making admission
decisions said he should be treated as an outpatient. P went home and
had a stroke. The issue is whether there was a P/P relationship between P
and the doctor who made the outpatient decision.

Holding: P had paid in advance for the services of the Humana plan
doctor on duty that night and the physician-patient relationship existed.
When the health-care plans’ insured shows up at a participating hospital
emergency room and the plan’s doctor on call is consulted about
treatment or admission there is a P/P relationship between the doctor and
the insured.

Note: A physician with staff privileges at a hospital agrees to a

doctor/patient relationship with whom ever comes into the hospital.
Physician’s on-call to treat emergency patients are under a duty to treat
patients. (However, in TX, there must be some further affirmative step
by the physician to establish the relationship)

Confidentiality and Disclosure

One of the most important obligations owed by a professional to a patient is the

protection of confidences revealed by the patient to the professional

In Humphers v. Firsts Interstate Bank, the patient claimed that doc revealed her
identity to a daughter whom she had given up for adoption. Trial court dismissed
claim for lack of cause of action. Court here said breach of confidence in a
confidential relationship is a proper cause.


Origins of the Informed Consent Doctrine

Informed consent has developed out of strong judicial deference toward individual
autonomy, reflecting a basic belief that an individual has a right to be free from
nonconsensual interference with his or her person.

Doctrine of informed consent can serve six functions:

1. protect individual autonomy

2. protect patients status as a human being
3. avoid fraud or duress
4. encourage doctors to carefully consider their decisions
5. foster rationale decision-making by the patient
6. involve the public generally in medicine

The doctrine of battery provided the theoretical underpinnings of the cause of action

Battery protected a patients physical integrity from harmful contacts and had a number of
advantages: (1) the physician has few defenses to battery (2) the plaintiff need not
introduce expert testimony (3) to prove causation the P only need show an unconsented to
touching occurred

So need consent forms to allow touching, as touching w/o consent is a battery.

In Tx, 4590i says an informed consent claim must be brought under the statute and is
therefore a negligence claim, not a battery claim (the statute trumps the common-law
battery claim)

Legal Framework of Informed Consent

Negligence as a basis for recovery

In Canterbury v. Spence, a patient went in to seek treatment for his back pain. He
then submitted to an operation without being informed of the risk of paralysis
incidental thereto. The lower half of his body ended up paralyzed. The trial court
granted a motion for a directed verdict because there was no evidence of
negligent treatment. The P argued that the negligence was in not informing the
patient of the risks involved. The court agreed and held that the physician had a
duty to disclose the risk of paralysis as matter of law. The court reasoned that
part of the doctors duty to treat the patient is a duty of reasonable disclosure of
the choices with respect to proposed therapy and the dangers inherently and
potentially involved. The duty arises when such conduct is reasonable under the

Scope of the disclosure: a risk is material and requires disclosure when a

reasonable person would be likely to attach significance to the risk or cluster of
risks in deciding whether or not to forego the proposed therapy.

The Cantebury rule uses the reasonable patient as the measure of the scope of the
disclosure (patient oriented disclosure standard)

Other jurisdictions employ the professional disclosure standard, measuring the duty to
disclose by the standard of the reasonable medical practitioner similarly situated (this is a
physician oriented standard)

Arguments for this approach: (1) protects good medical practice (2) a pt oriented
standard would force docs to spend unnecessary time going over every possible
risk (3) only the physician can accurately evaluate the risk on the individual

• What information must be disclosed?

1. diagnosis:

2. nature and purpose of proposed treatment

3. risks of the treatment: the threshold of disclosure varies with the

probability and severity of the risk

4. treatment alternatives: the doc should disclose those alternatives

that are generally acknowledged within the medical community as

Disclosure of Physician-Specific Risk Information

In Johnson v. Kokemoor, the patient alleged that the doctor, in undertaking his
duty to obtain the patients informed consent before operating to clip an
aneurysm, failed (1) to divulge the extent of his experience (2) to compare the
morbidity and mortality rates for this type of surgery among experienced
surgeons and inexperienced surgeons (3) to refer the patient to somewhere
staffed with more experienced surgeons. The court held that (1) evidence
regarding surgeon's lack of experience with particular surgical procedure and
difficulty of proposed procedure was properly admitted; (2) statistical evidence
concerning morbidity and mortality rates when surgery at issue was performed
by physician of limited experience, such as defendant surgeon, and by
acknowledged masters in field was properly admitted; and (3) evidence that
surgeon should have advised patient of possibility of undergoing surgery at
tertiary care facility with more experienced surgeon in better-equipped facility
was properly admitted. All of these things could be important to the patients’
decision and had a reasonable person in P’s position been aware of these three
things they would not have undergone surgery with D.

Note: Most courts resist requirements that specific percentages of risks be disclosed
arguing that medicine is an inexact science. In Tx we rely on credentialing or peer review
to take care of doctors who have low success rates or diminished skills (there is no case
in Tx that holds that the doc has to reveal specific info about his success)

Texas has adopted the Cantebury reasonable person rule by way of statute. §6.02 of
4590i replaces the common law locality rule with the reasonable person rule, which
focuses on the disclosures that would influence a reasonable person in deciding whether
to consent to a recommended medical procedure.

Under §6.03, In Texas the Texas Medical Disclosure Panel examines every
medical and surgical procedure and determines whether disclosure is required
and how much is required. (the panel is composed of nine members = 6 doctors
and 3 lawyers)

The panel comes up with two lists:

List A = all procedures the panel has looked at and decided require full

List B = no disclosure required

If no determination has been made the duty imposed is: to disclose all risks or
hazards which could influence a reasonable person in making a decision to
consent to the procedure.

If a procedure is on list A and there is no disclosure, it creates a rebuttable

presumption that the doctor was negligent.

Barclay case: the doc failed to disclose certain risks associated w/ some drugs he
prescribed to the patient. There was no panel determination in this case, therefore P must
prove by expert testimony that the medical condition complained of is a risk inherent in
the medical procedure performed. The P must show two things:

(1) the risk is inherent in the procedure and

(2) the risk is material (could influence a reasonable persons decision to consent
to the procedure)

In the above case, the doc said that he did not inform the patient of the side effects
because he felt the patient needed to take the medicine (P was crazy) and would not have
taken it had he known of the risks/side effects. The court said it is not up to the doc, it is
up to the reasonable patient standard: would a reasonable patient have taken the drugs
even though he knew of the risk.

Who can consent? competent adults, it is not a legal definition of competency, you can
give consent if the doctor decides you are competent to give consent. Parents/guardians
can consent for minors.


Access to hospital facilities for the treatment of their patients is essential to the practice of most

Increasingly, the doc’s relationship with 3rd party payors have become critical as well

Staff Privileges and Hospital-Physician Contracts

A doc may treat patients in a particular hospital only if he has “privileges” at that hospital

“Privileges” normally include the right to admit patients and the authority to use hospital
facilities to treat pts.

Process of obtaining and retaining “privileges” is called physician credentialing

Under the traditional medical staff structure, the physicians retained substantial control
over access to hospital privileges (hospital governing board always retains actual

Now, many hospital have shifted their medical staff structures in some areas toward
contract and employment relationships (mainly for cost-containment reasons)

The Doc is entitled to due process and Hospital by-laws provide for notice, hearings,
representation, and appeals

Can courts review the staff privilege decisions of private hospitals?

Majority View: A courts judicial review is limited only to those situations where
the private hospital did not follow its own by-laws. As stated in Rao v.
St.Elizabeth “A court should not act to annul expulsions from hospitals unless

unfairness is demonstrated by the fact that the procedures followed violated the
constitution or bylaws of the hospital”

Minority view: Hospital actions are subject to an arbitrary and capricious

standard of review.

In Mateo-Woodburn, the hospital was switching its anesthesiologists

from an open-staff rotation system to a system with an appointed director
and subcontracted practitioners in order to avoid the problems associated
with the open system (docs would take subsidized patients, unqualified
docs took lucrative cases to make more money, on-call docs were
unqualified). The court concluded that the terms of the contract were not
arbitrary and capricious and seemed to bear a rational relationship to
correcting the problems.

Note: Staff privileges decisions that involve state action must meet due process

Traditional credentialing issues include: competence/incompetence, needs of

patient population, cooperation, not be impaired, meeting by-law requirements

Economic credentialing: (a term of the AMA) occurs when a hospital makes

privileges decisions based on factors unrelated to quality (the financial impact of
a doctors treatment patterns)

Doctors elimination by reason of department reorganization and failure to sign

contract (doc refuse to sign) does not invoke due process concerns.

Managed Care Contracts for Professional Services

Hospital staff privileges are still essential to most doc’s, but participation in mamged care
programs has also become critical to many docs

What rights do docs have in disputes arising from selection and deselection decisions
made by HMO’s?

In Harper v. Healthsource New Hampshire, the HMO decided to terminate its

contractual relationship with the doc and did so w/o cause. The Doc argued that
terminating him w/o cause violated public policy (in that termination of the
relationship also affects his patients). The court holds that “public interest and
fundamental fairness demand that an HMO decisions to terminate its relationship
with a particular doc must comport with the covenant of good faith and fair
dealing and must not be contrary to public policy.” If a decision is made in bad
faith the doc is entitled to review

Here, the court sustained the cause of action against an HMO that dropped a doc
w/o explanation, where the doc alleged the real grounds related to differences of
opinion over patient care policies.

In CA, penalizing a doc for advocating for medically appropriate health care violates
public policy

Labor and Employment

Docs, nurses, and others working w/o an employment contract or one that does not
provide for a specific term of employment are subject to the doctrine of employment at

doctrine of employment at will: the employment relationship can be terminated w/o cause
at the will of either the employee or the employer (subject to a few exceptions)

In Wright v. Shriners Hospital, a nurse made critical comments about the medical
staff to a survey team. Her employment was terminated for patient care issues
that had arisen as a result of the surveys. P argued that the hospital violated
public policy in that it retaliated against her for criticizing the hospital in the
surveys. The trail court agreed and felt that there was a duty to report on
substantial patients issues. The court here disagreed and stated that there were no
statutes that clearly express a legislative policy to encourage nurses to make the
type of internal report that she made (the court mentioned other statutes requiring
reporting of child abuse, elder abuse, or neglect in general but none of these were
applicable here). The nurse comments were an internal matter and could not be
the basis of a public policy exception.

Other public policy exceptions: can’t make a nurse perform tasks that she is unqualified
to perform or if “whistleblower” statutes are in place


The Act protects non-supervisory employees who engage in protected concerted activity,
whether unionized or not.

The NLRA provides that it is generally an unfair labor practice to terminate the
employment of a person for engaging in concerted action to improve the terms and
conditions of employment.

In NLRB v. Health Care & Retirement Corp., four nurses were disciplined. The
National Labor Relations Board held that nurses were not supervisors (so that
such professional employees would not be excluded from protection under the
act) because they don’t exercise authority in the interest of the employer but in
the interest of patient care. The court held that they were supervisors (staff nurses
were the senior ranking employees in charge of 50 nurses aides)and therefore not
protected by the act.

Holding: Nurses employed in a nursing home exercised de facto supervision over

the work assignments of nurses aides to be subject to the managerial exclusion.

Discrimination Law

The Rehabilitation Act and the ADA prohibit discrimination against an otherwise
qualified individual with a disability

To establish a case the P must show:

1. he has a disability
2. he is otherwise qualified for the employment or benefit in question
3. he was excluded from the employment or benefit due to discrimination solely
on the basis of the disability

In Doe v. UMMSC, a resident contracted HIV and was suspended from surgical
practice. UMMSC concluded that a very real possibility existed that the resident
could be injured during surgery and expose patients to his blood. The resident
argued that he was entitled to relief under the Rehabilitation and ADA acts.
Moreover, resident relied on a CDC report claiming that HIV surgeons should
not be barred from performing most surgical procedures. The court stated that an
individual is not otherwise qualified if he poses a significant risk to the health or
safety of others by virtue of a disability that cannot be eliminated by reasonable
accommodation. There is a four part test to determine if a n individual poses a
significant risk to others:

(a) the nature of the risk (how the disease is transmitted),

(b) the duration of the risk (how long is the carrier infectious),
(c) the severity of the risk (what is the potential harm to third parties) an
(d) the probabilities the disease will be transmitted and will cause varying
degrees of harm.

Here, the court holds that Dr. Doe does pose a significant risk to the health and
safety of his patients that cannot be eliminated by reasonable accommodation.
Although there may presently be no documented case of surgeon-to-patient
transmission, such transmission clearly is possible. And, the risk of percutaneous
injury can never be eliminated through reasonable accommodation

Practice Agreements

There has been a significant shift away from solo practice or small group practice to
larger groups

In Wall v. Firelands Radiology, a doctor entered into an employment agreement

with Firelands. As part of the agreement the doctor agreed to a 3 year/20 mile
restrictive covenant. The doctor now challenges the enforceability of the
covenant. The court must determine if

1) the restraint is no greater than required for the employer's protection; (2) the
restraint imposes undue hardship on the employee; and (3) the restraint is
injurious to the public.

The court concludes that the restraint is no greater than required for Firelands'
protection as Firelands' practice is dependent upon the contracts with the two

hospitals, it does not impose undue hardship and it is not injurious to the public
as the doc possessed no subspecialty (that the hospital might have to do w/o)

Note: Covenants have to be reasonable

The current majority view is that restrictive covenants are enforceable in physician
practice agreements under ordinary commercial principles (because the group has
invested in the physicians and will be harmed if the docs turn around and compete with


Forms of Business Enterprises and Their Legal Consequences

For the most part, state law governs the principal legal relationships among participants
in the various organizational forms:

• For profit corps

• Not for profit corps
• Professional corps
• Partnerships
• Limited partnerships
• Limited Liability Companies and Partnerships

Governance and Fiduciary Duties in Business Associations

Stern v. Lucy Webb Hayes National Training School,

Facts: patients of the hospital brought a class action lawsuit against the hospitals
Board of Trustees. They alleged that the trustees breached their fiduciary duties
of care and loyalty in the management of the hospitals funds. (the hospital kept
most of its assets in low interest or no interest checking and saving accounts).
The court holds that corporate officers and trustees have fiduciary duties of fair
dealing, good faith, and can’t inure benefit to themselves (self-dealing)

Principle: the trustee of a charitable hospital should always avoid active

participation in a transaction in which he or a corporation with which he is
associated has a significant interest.

In the case of for profit corps, the business judgement rule has come to pose an almost
impermeable shield protecting directors and officers

Business Judgment Rule-this rule immunizes management from liability in corporate

transactions undertaken within both power of corporation and authority of management
where there is a reasonable basis to indicate that transaction was made with due care and
in good faith.

Charitable trust doctrine: non-profit corps cannot legally divert their donated assets to
any purpose other than a charitable purposes and these assets are treated as “irrevocably
dedicated” to such purpose

Note: non-profit organizations can be converted into for-profits, if the assets are sold to
the sold for profit corp and the proceeds are distributed in accordance with state and
federal law.

Limited Liability for Investors

An important objective for many investors is limited liability. However, courts can
disregard the corporate from or pierce the corporate veil.

Generally speaking the doctrine of piercing the corporate veil is invoked to prevent fraud
or to achieve equity.

Factors the court will consider: Fraudulent representation by the corporation’s directors,
Undercapitalization (is it shockingly undercapitalized), Failure to observe corporate
formalities, Absence of corporate records, Payment by corporation for individual
obligations, or, Use of corporation to promote fraud, injustice, or illegalities, Siphoning
of funds of the corp by dominant stockholder

In US v. Pisani, a doctor was held personally liable for Medicare overpayments

to a corp in which he was the sole shareholder and president. The corp was
undercapitalized, always operated at a loss, never paid dividends, no corporate
formalities were followed, and the corp was operated with the docs personal

Professionalism and the Corporate Practice of Medicine Doctrine

Corporate Practice of Medicine Doctrine prohibits lay persons or entities from hiring
docs, paying their salaries, or collecting their fees.

Rationale for the doctrine: (1) corporations not being natural persons are
ineligible for a medical license as they fail to meet the licensing requirements
(sound moral character, medical degree, and passing score on exam) and (2)
courts are concerned that employed docs will focus on earning a profit and their
patient loyalty will be subverted to their obligation to the Corp (see p.517)

Under the doctrine, only persons who have a license may practice medicine. Moreover,
docs can only form professional corps with one another.

In Morelli v. Eshan, a doc entered into a partnership with a non doc. They had a
falling out and the doc sought to void the partnership agreement. The non doc
claimed he was just a businessman while court concluded that since he was a
general partner he was operating a clinic w/o a license. The court voided the

Most states make exceptions for hospitals and HMO’s.

Only five states (including TX) currently prohibit hospitals from employing physicians.

Integration and New Organizational Structures

The US health Care System has been moving steadily away from delivery of health care
through independent practitioners and toward more integrated approaches

Some of the integrating organizations:

Independent Practice Association (IPA) a physician-organized entity that

contracts with payers on behalf of its members physicians

Physician Hospital Organization: contracts with payers on behalf of the hospital

and its affiliated physicians

Group practice: three or more physicians formally organized as a legal entity

Group practice w/o walls: docs in physically independent facilities who form a
single legal entity to centralize the business aspects of their organization

Management services organizations (MSO) provide admin and practice

management services to docs

Hospital owned medical practice

Integrated Delivery System (IDSs): a hospital or hospitals and large

multispecilaty group practices form an organization for the delivery of health
care, with al physician revenues coming through the organization. three types:

1. foundation model
2. staff model
3. equity model

See Integration Continuum at page 527

Two ways integration can be achieved: by contract or by ownership

Tax-Exempt Health Care Organizations

Not-for-profit status usually refers to tax exemption status

The general requirement is that the exempt organization be “charitable”

Physician Recruitment

The IRS imposes limitations on physician recruitment by tax-exempt hospitals

A permissible recruit is one who is a recent graduate or is moving from another

city (i.e. has not or does not practice in the community served by the hospital)

Retentive incentives are impermissible

There has to be a demonstrable community need for that type of doc

Recruitment can’t be tied to referrals

Can’t restrict docs privileges at other hospitals

TEST question is one of the situations on pg 566


The govt. regulates health care in order to rectify flaws in the health care financing system, save
the government money and prevent conflicts of interest. The regulations are often complex and

False Claims

The law of false claims is designed to protect the government from paying for goods or
services that have not been provided or were not provided in accordance with the
government regulations.

The Federal False Claims Act, permits the federal govt. to recover from individuals who
knowingly submit false claims (can obtain treble damages for each claims). Private “qui
tam” actions enable private individuals to bring actions to enforce the FCA.

Note: FCA imposes civil and criminal penalties while Stark only imposes civil penalties

Governmental Enforcement

In US v. Krizek, D was charged with over-billing or Up-coding (Used the CPT

code for a 45-50 minute session when he should have billed for a 20-30 minute
session) and for performing medically unnecessary procedures. The court found
that govt. did not prove procedures were unnecessary but the billing practices
were seriously deficient (wife completed submissions with little or no factual
basis, and psychiatrist failed utterly to review bills )The FCA requires a level of
scienter of (1) actual knowledge, (2) deliberate ignorance, or act in (2) reckless
disregard. Here, the court found that an aggravated form of gross negligence, or
"gross negligence-plus," was equivalent to reckless disregard, and thus was the
appropriate level of scienter to apply in False Claims Act action

The court also found that each form submitted, rather than each code on the form,
constitutes an individual claim. (each form constitutes a patient visist)

Qui Tam Actions (whistle blower actions)

Allows persons to be able to go to the feds and whistle blow about FFCA and Starks

These are actions by private persons and can be brought for a violation of the FCA, they
can only be dismissed by court and Attorney general.

• the govt. has a 60 period to proceed with the action otherwise person
bringing the action can pursue it
• he can receive between 15-25% (if govt. takes case) and 25-30% (if person
takes case) of the award
• person bringing the action must be an original source – have direct and
independent knowledge of the info and voluntarily provided it (can’t just
have heard rumors or read it in the paper)
• purpose of such actions is too facilitate regulation

Medicare and Medicaid Fraud and Abuse

Statue makes it illegal to:

• knowingly and willfully make false statements in an application for benefit

or payment
• receive, solicit or pay kickbacks
• penalties for fraud and abuse are both criminal and civil

See problems p.590

In an advisory opinion the Department of Health and Human Services was asked:

Whether a proposed management services contract between a medical practice

management company and a physician practice, which provided that the
management company will be reimburse for its costs and paid a percentage of the
net practice revenues would constitutes illegal remuneration as defined in the
anti-kickback statute?

Facts: Dr. X is a family practice physician who has incorporated as Company A.

Company A is proposing to enter into an agreement to establish a family practice
and walk-in clinic with a corporation, company B.

Answer: Yes, it may involve prohibited remuneration for two reasons (1) the
arrangement may include financial incentives to increase patient referrals (2) the
arrangement contains no safeguards against overutilization

Treatment of Referral Fees Under Fraud and Abuse Laws

Providers have a fiduciary obligation to recommend good and services for patients
considering only the patients medical needs and not the providers own economic interest

Hence, referral fees have long been frowned upon as they relate to health care

The fraud and abuse statutes prohibit paying or receiving any remuneration (directly or
indirectly) for referring, purchasing, or ordering goods, facilities, items or services paid
for by Medicare or Medicaid

In US v. Greber, D operated a diagnostic and monitoring service. D billed

Medicare for the monitor service and, when payment was received, D forwarded
a portion to the referring physician as interpretative fees even though D had

actually monitored the data. D argues that payments made to a physician for
professional services in connection with tests performed by a laboratory cannot
be the basis of Medicare fraud. The court held that if one purpose of the payment
was to induce future referrals, the Medicare statute has been violated. The
payments made here, in the form of remuneration for interpreting tests, induced
referrals as the purpose of the fee was to induce the ordering of services from D’s

In US v. Starks, employees from Project Support(provided drug counseling to

pregnant women) were sending clients to Future Steps (drug treatment program)
in return for cash payments. D’s argue that they had to know their referral
arrangement violated the Anti-Kickback statute in order to be convicted. The
court held that statute did not require knowledge that arrangement for referrals to
treatment program violated the statute. What was required is knowledge that the
conduct was unlawful; one would not expect the kickbacks to be legal, and they
were malum in se, rather than malum prohibitum.

Stark Act

Stark I and II prohibit physicians who have a financial relationship with a provider of
designated health acre services from making “referrals” of Medicaid or Medicare patients
to such providers for purposes of receiving any of the designated heath services.

The Stark law prohibits Medicare and Medicaid from paying for any services that
physicians render or order through entities that they have a financial relationship with.
This is meant to prohibit so-called “self-referral fees”; that is , incentives for docs to send
patients to entities they own or receive money from.

The rationale behind Starks is that it wants Docs to be docs (and make decisions based on
patients best interest rather than his own financial interest). If doc does go into businesses
Starks tries to draw a Bright line test for him to follow

Starks list and describes transactions that are alternately legitimate or illegitimate under
the law

The Bright Line Test: if no exception applies, the law has been violated (strict liability)

Starks exceptions are of three kinds:

1. those applicable to ownership or investment financial relationships

2. those applicable to compensation arrangements
3. generic exceptions that apply to all financial arrangements

A financial relationship includes an ownership or investment interest in the entity or a

compensation agreement between the physician and the entity.

Exceptions: Physician incentive plans and office space rental (FMV)

See handout on STARKS


Medical profession are not exempt from the antitrust laws.

There are three major federal statutes:

1. Sherman Act: prohibits monopolization and agreements and conduct that restrains
trade (such conduct includes: price fixing, market division, exclusive dealing, group

2. Clayton Act: prohibits mergers and acquisitions where the effect may be substantially
to lessen competition or to tend to create a monopoly

3. Federal Trade Commission Act: prohibits unfair methods of competition and unfair
or deceptive acts or practices

Two ways to analyze the reasonableness of restraints under the Sherman Act:

1. per se rule: some activities such as price fixing, market allocations, an d certain
group boycotts have been considered so likely to harm competition that they are
deemed illegal per se

2. Rule of Reason: D’s can escape liability if they prove that the pro-competitive
benefits of the challenged activity outweigh any anti-competitive effects so that
competition is strengthened rather than restrained (courts will look at whether parties
had any market power and whether patient is harmed) is a balancing test

The Department of Justice has outlined circumstances when competing physicians may
share information: (1) if collection is managed by a third party (2) data must be at least
three months old (3) must be at least five providers reporting data

Anti-trust boycott theory of action: It is anti-competitive to allow physicians to exclude

their competitors from hospital facilities that are essential to the practice of medicine (P
must show a conspiracy and restraint of trade)

In Wilk v. American Medical Association, the AMA was charged with conducting
an illegal boycott in restraint of trade directed at chiropractor. The court
concludes that the boycott constituted an unreasonable restraint of trade under the
rule of reason. The court modified the rule of reason by allowing a patient care
defense (which AMA failed to meet as there was ample evidence of the
effectiveness of chiropractic) whereby the AMA would have to show:

(1) that they genuinely entertained a concern for what they perceive as
scientific method in the care of each person with whom they have
entered into a doctor-patient relationship; (2) that this concern is
objectively reasonable; (3) that this concern has been the dominant
motivating factor in defendants' promulgation of Principle 3 and in the
conduct intended to implement it; and (4) that this concern for scientific
method in patient care could not have been adequately satisfied in a
manner less restrictive of competition.

If you can show the restraint is for patient care then you will probable win.

Staff Privileges

A number of physicians have filed anti-trust cases challenging staff privileges


In Oksanen v. Page Memorial Hospital, the doc contends that the Sherman
Antitrust Act was violated when the medical staff allegedly conspired amongst
itself and with the hospital's Board of Trustees to revoke the doc's staff
privileges. The court holds that , the Board of Trustees and the medical staff
comprised a single entity during the peer review process (based on the principle
of intracorporate immunity). Because an entity cannot conspire with itself, the
Board and the staff lacked the capacity to conspire. Furthermore, Medical staff
members could not be found to have conspired with each other where there was
no evidence that staff attempted to usurp power of board of trustees to make final
decision on physician's status, nor any evidence that staff illicitly agreed to
exclude physician from market or engaged in anticompetitive activity outside
official meeting and hearing process; medical staff members' conduct was
consistent with legitimate activities involved in peer review proceeding

The HCQI Act, provides limited antitrust immunity to peer review participants who act in
good faith and meet certain due process and reporting requirements in their professional
review activities.

In the Santa Fe case, the area did not have a lot of providers. The hospital
decided to form an MCO and got docs from the community. The 30% rule states
that if you corner more than 30% of the market (broken down by specialty) then
this might be considered an anti-trust issue. MCO’s have tried to get around the
rule by hiring 29% as employees, then cutting deals with the rest. Courts say the
will frown on this and in considering the issue they will balance and look at three

(1) capitation: provides that docs are paid a single amount per patient
enrolled to cover all medical needs for a prescribed time, usually a
year (a good thing to have)
(2) Global fees
(3) If non-MSO physician did not pass costs on to patient

30% rule: the agency will not challenge, absent extraordinary circumstances, a non-
exclusive physician network joint venture whose physician participants share substantial
financial risk and constitute 30% or less of the physicians in each physician specialty
with active hospital staff privileges who practice in the relevant geographic market. (20%
id the network is exclusive)

Exclusion of Providers

In Capital v. Mohawk, Mohawk was an IPA that together with the Plan constitute
an IPA-HMO. Captital is group of radiologists that sought membership in the
IPA but were denied. They now claim that Mohawk conspired to boycott them.
The court applies the rule of reason and states that an antitrust conspiracy
plaintiff may satisfy burden of demonstrating that defendant's conduct or policy
has had substantial harmful effect on competition without detailed market
analysis, by offering proof of actual detrimental effects, such as reduction of
output; where plaintiff is unable to demonstrate such actual effects, however, it
must at least establish that defendants possess requisite market power so that
their arrangement has potential for genuine adverse effects on competition.
Sherman Anti-Trust Act. Here, Capitol did not show detrimental effects (fees
remained the same) and the IPA-HMO had a de minimis market share and
therefore lacked the power to injure competition.

Note: Must show actual adverse effect on competition as a whole in relevant market;
proof that plaintiff has been harmed as individual competitor will not suffice

Exclusive Contracting

In US Healthcare, Inc. v. Healthsource, U.S. Healthcare challenged an exclusive

dealing clause in the contracts between the Healthsource HMO and doctors who
provide primary care for it in New Hampshire. Exclusive dealing clause in health
maintenance organization's (HMO) service agreements with physicians did not
give rise to per se violation of Sherman Act; there was no evidence of horizontal
agreement among physicians, but instead challenged exclusivity arrangement
was vertical in form (the law permits vertical exclusivity because such
arrangements are usually more benign than a horizontal arrangement) The
appropriate focus for determining whether exclusive dealing clause in Health
Maintenance Organization's (HMO) service agreements with physicians gave rise
to monopolization, or attempted monopolization, was sale of health care to
buyers, rather than HMO's buying power in tying up physicians needed by
competitors; HMO could never achieve monopoly (or monopsony) as buyer of
doctor services, because doctors had too many alternative buyers for their

Mergers and Acquisitions

The Clayton Act prohibits mergers that “substantially lessen competition or tend
to create a monopoly”

In HCA v. FTC, the court sustained an FTC decision that prohibited the
countries largest hospital chain from acquiring several hospitals in the
Chattanoga market, Prior to the acquisition, HCA owned only one
hospital in the market. Afterwards, it owned or managed 5 of the 11 area
hospitals. This acquisition resulted in four firms controlling 91% of the
market. The court reasoned that this degree of market concentration is
dangerous given the history of cooperation between competing hospitals
in Chattanoga and the barrier that CON regulation creates to new
hospitals entering the market.

Notes on health care costs:

• we spend 1 Trillion/14% of the GDP

• consumer has very little control over health care costs
• employer has no duty to provide health insurance
• insurance provides a disincentive to shop around
• malpractice costs are not a major contributor to medical costs
• in England the govt. provides health care, in Germany all heath care is
• possible reform measures include: medical savings account and managed
competition by government

History of health insurance

• before the 30’s, Americans paid over 90% of their medical expense out-of-
• During depression patients could not afford health care so docs were getting
little business, so hospital-sponsored health insurance arrangements were
developed to ensure a more predictable flow of revenues to providers
• These hospital plans served as a model for Blue Cross
• Blue Shield plans were commercial and had cost-containment in mind

Approaches to Health Care Reform

Medical Savings Account

• Is a form on individual self-insurance

• Person deposits money into the account and can deduct that money (as long
as proceeds from account go to medical expenses)
• Patient pays for all costs of care out of his account (has supplemental
catastrophic insurance to pay costs that exceed account)
• Encourages consumers to avoid unnecessary care and shop for the least
expensive providers when care is necessary

Managed Competition

Managed competition attempts to organize the market for health care financing
entities to make the market competitive and then to rely on these financing
entities to control the cost of health care services.

Consumers are pooled into purchasing alliances to give them market power in
dealing with health plans

International Models

England: medical care is publicly funded and provided

Germany: most medical care delivery and financing is private


A number of factors can impede an individuals access to adequate health care, but ability to pay
is the key determinant.

As a general legal principle, private health care providers do not have a duty to provide
uncompensated care

Most of the expansion of duties to provide health care have been legislative: can’t discriminate on
characteristics of patient, mandate treatment in exchange for receipt of govt. funds

Physicians Duty to Treat

In Ricks v. Budge, doc was treating P for his hand. Hand became worse and P
went back to doc for further treatment and doc said he needed treatment but
refused to provide it unless P paid his past due bill. P has to have part of hand cut
off and sues doc. Court says there was a P/P relationship (due to prior
treatment)and therefore Doc was obliged to provide continuing treatment as long
as the case requires attention. (Doc can withdraw as long as he gives sufficient
notice and 30 days is considered reasonable)

In Childs v. Weis (TX), 7-month pregnant black woman showed up at ER

bleeding and in labor pains. Nurse called on-call doc who said woman should go
see her own doc. Baby dies on the way to another hospital. Court says the P/P
relationship is dependent on an express or implied contract. In this case, since
there was neither, the doc had no duty to examine or treat the woman.

In Hiser v. Randolph, patient showed up at an emergency room in a comatose

state. All hospital docs were paid to be on-call. The nurse called the on-call doc
who knew the patient and refused to treat her because he disliked her husband.
Finally, the Chief of staff came in and treated her. Patient died. Husband sued
doc. Court states that as a general rule a doc is free to contract his services as he
sees fit and can refuse to see a patient even in an emergency. However, by
accepting payment to act as the ER on-call doc, he became personally bound to
treat patients admitted to the ER.

Hospitals’ Duty to Provide Treatment

The common-law duty of the hospital toward the emergency patient was captured
traditionally in the phrase “stabile and transfer” indicating that once the patients
emergency condition was stabilized, he could be transferred.

The Emergency Medical Treatment and Labor Act (EMTALA) was enacted in response
to widespread “patient dumping” a practice in which patients would be transferred from
one hospitals emergency room to another’s for admission

EMTALA 42 U.S.C.A. §1395dd

(a) Medical screening requirement

In the case of a hospital that has a hospital emergency department, if any
individual comes to the emergency department and a request is made on the
individual's behalf for examination or treatment for a medical condition, the
hospital must provide for an appropriate medical screening examination within
the capability of the hospital's emergency department, including ancillary
services routinely available to the emergency department, to determine whether
or not an emergency medical condition exists.

(b) Necessary stabilizing treatment for emergency medical conditions and labor

If any individual comes to a hospital and the hospital determines that the
individual has an emergency medical condition, the hospital must provide
either-- (A) within the staff and facilities available at the hospital, for such
further medical examination and such treatment as may be required to stabilize
the medical condition, or (B) for transfer of the individual to another medical
facility in accordance with subsection (c) of this section.

The transfer is inappropriate if the hospital does not provide medical treatment
within its capacity to minimize the risks to the patient's health

Statute requires that the ER provide an appropriate medical screening examination within
the hospitals capability to determine if an emergency medical condition exists. If an
emergency medical condition is identified, the hospital must stabilize the patient and
restrict transfer until the condition is stabilized.

Note: in transfer cases, the treating doc makes the determination of stability (as opposed
to the doc at the transferee hospital who might argue whether patient is able to be

EMTALA applies only to hospitals that accept payment from Medicare and operate an
emergency department (if there is an violation the doc’s can be fined and the hospital can
be fined or have its Medicare status terminated, an absolute 2 year SOL even for minors)

Baber v. Hospital Corporation of America

Facts: The patient came into the ER drunk and acting restless and agitated.
Patient fell and struck her head. Doc sewed head up and thought that patient’s
subsequent anxiety and speech problems were the results of here pre-existing psy
problems. Because Doc did not conclude she had a serious head injury, he believed that
she could be transferred safely to BARH where she would be under the observation of the
BARH psychiatric staff personnel. Patient was transferred, and later died from a
fractured skull. Patients family sued and argued that (1) RGH failed to provide an
appropriate medical screening to discover that Ms. Baber had an emergency
medical condition as required by and (2) RGH transferred Ms. Baber before her
emergency medical condition had been stabilized.

Holding: The court held that the "appropriate medical screening" requirement of
the EMTALA does not impose a national medical malpractice standard upon
emergency room personnel. The screening requirement only requires a hospital
to provide a screening examination that is "appropriate" and "within the
capability of the hospital's emergency department," including "routinely

available" ancillary services. The standard which will of necessity be
individualized for each hospital, since hospital emergency departments have
varying capabilities.

The hospital has to treat all patients the same; treat them as they normally do in
such cases

To recover for violations of EMTALA's transfer provisions, the plaintiff must

present evidence that:

(1) the patient had an emergency medical condition;

(2) the hospital actually knew of that condition

(3) he patient was not stabilized before being transferred; and

(4) prior to transfer of an unstable patient, the transferring hospital did not obtain the
proper consent or follow the appropriate certification and transfer procedures.

Note: in the above case, the doc’s did not know about the fractured skull. Just because he
missed the diagnosis it is not considered “dumping” as EMTALA does not require the
doc to get the diagnosis right

In Howe v. Hill, an HIV positive patient went to ER and was examined by the
duty doc who determined that he needed to be admitted. However, the on-call
doc refused to admit him and had him transferred. P brought suit under
EMTALA and claimed that D “dumped” patient on the other facility because D
did not wish to treat an AIDS patient. D moved for summary judgment on
plaintiff's EMTALA claim, arguing that, as a matter of law, P was stable at the
time of transfer. (D also claimed that thought pt had TEN, and their facility could
not treat TEN) Under the EMTALA, "stabilized" means that to a reasonable
degree of medical probability, no material deterioration of the [patient's]
condition is likely to result from or occur during the transfer. Here a jury could
reasonably conclude that the TEN diagnosis was a fabrication or ad hoc
justification for patient's transfer and that Memorial Hospital transferred pt.,
while he was unstable, without providing him with necessary medical care that
was within their capability to provide.

In Roberts v. Galen of Virginia, Inc. (US), the court of appeals held that in order
to recover in a suit alleging a violation of §1395dd(b) a plaintiff must prove that
the hospital acted with an improper motive in failing to stabilize her. The court
holds that (b) contains no express or implied “improper motive” requirement.
(another C of A held that (a) requires “improper motive”, the court does not rule
on this but notes that it is in conflict with other circuit courts)

The plaintiffs in Howe v. Hull, also brought an ADA claim as the ADA prohibits
discrimination by places of public accommodation. There are three basic criteria P must
meet in order to establish a prima facie case of discrimination under the ADA:

1. P has a disability
2. defendants discriminated against P

3. discrimination was based on the disability

The discrimination can take the form of the denial of the opportunity to receive medical
treatment, segregation unnecessary for the provision of effective medical treatment,
unnecessary screening or eligibility requirements for treatment, or provision of unequal
medical benefits based upon the disability.

A defendant can avoid liability by establishing that it was unable to provide the medical
care that a patient required

In Bragdon v. Abbott, the S.Ct. held that HIV infection is a disability under the ADA.

see EMTALA handout


Regulation of Private Health Insurance Under State Law

The obligations of a health insurer to its insured are determined by the insurance

In Lubeznik v. Healthchicago, the patient was suffering from ovarian cancer and
her doc wanted to perform a certain procedure. The insurer refused to precertify
the procedure on the grounds that it was experimental. Patient sued for an
injunction. The court states that coverage provisions in an insurance contract are
to be liberally construed in favor of the insured to provide the broadest possible
coverage. Moreover, where a provision is ambiguous, its language must be
construed in favor of the insured. Where an insurer seeks to deny insurance
coverage based on an exclusionary clause contained in an insurance policy, the
clause must be clear and free from doubt. Here, the language of the policy was
not clear, the reviewing doc made a spot determination (did not review info from
medical assessment boards) and there was evidence that the procedure was not

Courts have traditionally viewed insurance contracts as adhesion contracts and construe
them in favor of insured. This has made it difficult for insurance companies to control
their exposure to risk through general clauses that refuse payment for care that is not
“medically necessary” or that is “experimental”

Utilization Review

Utilization review refers to the external case-by-case evaluation conducted by 3rd party
payors, purchasers, heath care organizers, or utilization review contractors to evaluate the
necessity and appropriateness of medical care. It is a strategy that attempts to control cots
by limiting demand. It is based on the belief that considered review of medical care can
eliminate wasteful and unnecessary care, and might eliminate some harmful care.

Utilization review is a common target for state regulators.


The Employee Retirement Income Security Act of 1974 (ERISA) established uniform
standards for employee benefits plans and broadly preempted state regulation of these
plans. The statute regulates employers who provide their own health plans for their

The statute states that ERISA supercedes state laws to the extent that they “relate to any
employee benefit plan” covered by ERISA

Under ERISA preemption analysis, a state law relates to an ERISA plan if it has a
connection with or reference to such a plan.

In all the ERISA cases the HMO is arguing that the state action brought by the P is a
claim that arise under federal law and is thus removable to federal court. P’s are saying
that these are state causes of action and they are not trying to get after plan benefits

Corporate Health Insurance v. Texas Department of Insurance

Facts: P’s (insurance companies) requested a declaration that the Health Care and
Liability Act is preempted by ERISA. The Act allows an individual to sue a
health insurance carrier, health maintenance organization, or other managed care
entity for damages proximately caused by the entity's failure to exercise ordinary
care when making a health care treatment decision. P’s argue the Act
"impermissibly interferes with the purpose, structure and balance of ERISA and
FEHBA, thereby injecting state law into an area exclusively reserved for
Congress." D’s contend that the Act regulates the quality of care provided by the
HMO [s] operating in Texas. ERISA and FEHBA, in contrast, govern what types
of regulations may be placed on an employee benefit plan.


• under ERISA preemption analysis, a state law relates to an ERISA plan if it

has a connection with or reference to such a plan (the Act does not make
reference, in fact it expressly excludes ERISA plans)
• provision that allowed Independent Review Organization was preempted as
the provisions for an independent review improperly mandate the
administration of employees benefits and therefore have a connection with
ERISA plans(and severed from the act)
• HMO’s can be vicariously liable for doc negligence and such a suit is not
preempted by ERISA

Claims challenging the quality of a benefit, as in are not preempted by ERISA. Claims
based upon a failure to treat where the failure was the result of a determination that the
requested treatment wasn't covered by the plan, however, are preempted by ERISA

Purpose of ERISA: so large employee benefits plans will not have to worry about
different state regulations

Purpose of Health Care Liability Act (which is located in the Tex. Civ. Prac. and Rem.
Code): prevent health plans from escaping liability for the medical decisions they “make”
“control” or “influence”

HMO’s want ERISA pre-emptions in order to limit damages

The Health Care Liability Act allows HMO’s to get sued. The Texas legislature
felt HMO’s were making medical decisions and therefore are subject to the
standard of care.


ERISA will preempt decisions relating to utilization review (are the benefits allowed
under pre-certification review) ERISA will not preempt bad decisions made by the doctor
about medical care

The key issue in HMO suits is whether it is a qualified plan under ERISA (65 – 75% of
the plans are). Once you decide this, you have to look at the preemption language and
decide what does ‘relate to’ mean. Have to consider the underlying issues:

What type of decision is being made by the HMO (if it is a benefits decision then
ERISA applies)

(1) is it an ERISA plan
(2) does the decision relate to bad medical care or denial of benefits

Rights of ERISA Beneficiaries

ERISA obligates employee benefit plans to fulfill their commitments to their

beneficiaries, and provides a federal cause of action when they fail to do so.

§502(a)(1)(B), states in pertinent part

(a) Persons empowered to bring a civil action

A civil action may be brought

(1) by a participant or beneficiary

(B) to recover benefits due to him under the terms of his plan, to enforce his rights
under the terms of the plan, or to clarify his rights to future benefits under the terms of
the plan....

The elements for an ERISA breach of fiduciary duty claim:

(1) that the defendants are plan fiduciaries;

(2) that the defendants breached their fiduciary duties; and
(3) that a cognizable loss resulted

In Bechtold v. Physicians Health Plan, Insured under Employee Retirement
Income Security Act (ERISA)-governed employee welfare benefit plan sued
insurer, seeking coverage for high- dose chemotherapy with autologous bone
marrow transplantation (HDC/ABMT). The Court of Appealsheld that: (1) policy
unambiguously precluded coverage, and (2) insured was not denied full and fair
review of her claim.

In Ehlmann v. Kaiser Foundation Health Plan of Texas, Participants in employee

health plan sued health maintenance organizations (HMO) under Employee
Retirement Income Security Act (ERISA), alleging breach of fiduciary duty to
disclose physician compensation arrangements. The United States District Court
for the Northern District of Texas, Terry R. Means, J., 20 F.Supp.2d 1008,
dismissed complaint for failure to state a claim. Plan participants appealed. The
Court of Appeals held, as matter of first impression, that ERISA does not impose
fiduciary duty on HMOs to disclose physician compensation and reimbursement
schemes to plan members.

In Herdrich v. Pegram, the P’s appendix ruptured as the result of alleged

improper medical treatment (doctor delayed treatment and did not order some
tests). The docs involved participated in an incentive plan where they received
bonuses if they limited treatment costs. P argued that the defendants breached
their fiduciary duty to plan beneficiaries by depriving them of proper medical
care and retaining the savings resulting therefrom for themselves. The district
court dismissed the action for failure to state a claim. P appealed. The issue was
whether there was a breach of fiduciary duty (i.e. can a doctor participate in an
incentive plan and still be loyal to the patient.) The court states that Congress
intended that ERISA's definition of "fiduciary" be broadly interpreted. The court
holds that while maintaining dual loyalties does not in itself constitute a breach
of fiduciary duty under ERISA, incentives for physicians who administer medical
plan to limit medical care and treatment can rise to the level of a breach of
fiduciary duty under ERISA where the fiduciary trust between participants and
fiduciaries no longer exists, that is, where physicians delay providing necessary
treatment to, or withhold administering proper care to, plan beneficiaries for the
sole purpose of increasing their bonuses.

The Supreme Court reversed and held that mixed eligibility and treatment
decisions made by health maintenance organization (HMO), acting through its
physician employees, were not fiduciary acts within meaning of ERISA and,
thus, could not form basis for breach of fiduciary duty claim under ERISA.
Moreover, treatment decisions made by a health maintenance organization,
acting through its physician employees, are not fiduciary acts within the meaning

If an employee benefit plan denies a claim for benefits, it must provide a written
statement of the reason for denial within 90 days.

Health Insurance Portability and Accountability Act of ’96

The most important provisions of the legislation are those amending ERISA, the Public
Health Services Act, and the Internal Revenue Code to:

1.) the extent to which health plans may impose preexisting conditions limitations,
2.) prohibit discrimination by health plans against individual participants and
beneficiaries based on health status
3.) require insurers who market insurance in the small group market (employers with 2-
50 employees) to guarantee coverage and renewability to small employers who seek
coverage; and
4.) require insurers who sell individual insurance policies to make them available to
certain individuals who had previously had group coverage

Main purpose of HIPA is to allow employees to switch insurers w/o under-going a new
pre-existing condition period, a concept known as “portability”


Medicare is available to Social Security and Railroad Retirement recipients who are over the age
of 65 or disabled. (some otherwise unqualified people can receive Medicare if they pay

It has two parts:

Part A, the Hospital Insurance program: is paid for out of payroll taxes and primarily
covers institutional care. (has deductible and co-insurance payment)

Part B: the Supplementary Medical Insurance program, covers physicians services, home
health services, medical supplies, and related expenses. (usually only pays 80%)

Note: Medicare does not cover prescription medicine or long-term care

Medicaid consists of 56 programs operated jointly by the federal and state or territorial;
governments to provide funds to the deserving poor: those persons whose income and assets fall
below certain levels and who are aged, blind disabled, pregnant or members of families with
dependent children.

16% of the Federal budget goes to the two programs

Medicare payment system is a Prospective Payment System based on Diagnosis-Related Groups

– through studies the average admission cost was determined, and depending on the nature of the
procedure and other factors the provider is paid above or below the average cost (thus for DRG
75, surgery, major chest procedures, is weighed at 3.1034 or three times the average cost)

Congress passed the Medicare Act, to provide a federal health insurance program for the
elderly and the disabled. Today, a Medicare beneficiary can receive Medicare services in
two different ways. The first is to receive Medicare on a fee-for-service basis. Under this
option, the beneficiary goes to a health care provider for the necessary covered services;
either the provider or the beneficiary will be reimbursed by the government for the cost
of the services. The second, newer option is to enroll in an HMO or other eligible

In Grijalva, Et all v. Shalala, P’s were Medicare beneficiaries enrolled in an Arizona

HMO sued the Secretary. Among other claims, Plaintiffs alleged that the Secretary "has

failed and refused to take effective action to implement beneficiaries' notice and appeal
rights when they are denied health care services by their HMOs," and "has failed and
refused to provide Medicare beneficiaries enrolled in HMOs with a procedure of
obtaining review of HMO denial decisions contemporaneously with the denial decision.
The court held that denials by health maintenance organizations (HMOs) of medical
services to enrolled Medicare beneficiaries constitutes federal action which invokes
constitutional due process protections; HMOs and federal government are essentially
engaged as joint participants to provide Medicare services such that actions of HMOs in
denying services to beneficiaries and in failing to provide adequate notice may fairly be
attributed to federal government

In the above case, the federal government was claiming that once it delegated services to
an HMO it was no longer responsible, Court says no, they are still responsible.

Medicaid is a state administered program, and each state establishes its own eligibility
requirements, although the discretion of the states is limited by federal laws and regulations.

The program is jointly funded by state and federal government

Eligibility is usually based on economic concerns

27 categories of the poor (the deserving poor) must be covered by state Medicare programs

States can elect to include the “optional categorically needy” and the “medically needy”

In Hern v. Beye, a Colorado law prohibited funding of abortions. (fed law allows abortion
funding in case of rape/incest or to save the life of the mother) Court said that if you take
Medicaid funding then you have to follow the fed rules.

Note: Telemedicine and Rural Practice: medical databases are not available for any doctor with a
computer and a modem. The question is whether ease of access to medical databases will raise
the standard of knowledge of the average physician


New area – new law

Definition: the use of advanced telecommunications technologies to exchange health

information and provide health care services across geographic, time, social and cultural
barriers (some connection to medicine by some form of telecommunications)

Pt is one place – physician is somewhere else

Using a live interactive videoconference system the physician can treat a patient

The communications system is not practicing medicine its is a tool to allow the practice
of medicine

Is primarily used in rural communities and with prisons.



Can use you use telemedicine to practice on a patient in N.M. If the

doctor is licensed in TX and is in TX?

States license physicians, and each state has a different scheme and

The law says the practice of medicine occurs where the patient is.

Texas requires full licensure

Tech makes sure physician is licensed in the state where the patient

There has been some talk about a federal license pertaining to

telemedicine (but states oppose this)

Another option is interstate compacts between states whereby they

agree to allow each other to practice telemedicine over state lines

2. Privacy

For privacy reasons, operators have to make sure the signal is secure

In TX a statute says an examination by telemedicine is the same as

an in-patient examination and hence the same confidentiality

If you videotape a telemedicine occurrence, it must be treated as a

medical record

3. Limitations on picture quality

Two main limitations: (1) connectivity (getting the signal from A to

B) and (2) equipment (quality of the monitor, speed of computer)

4. HIPA implications

Since most telemedicine occurrence s are transmitted over phone lines –

federal law come into play (i.e HIPA)

HIPA applies to health care providers who transmit patient info over
telephone/electronic mediums

HIPA will change the rules by requiring the doc to tell patients (who
have to consent) who has access to their files (programmers, nurses, ect.)
and anyone who has access has to log in – which creates a record of

Telemedicine may raise bar of standard of care --- will increase liability (if P says you
had telemedicine capability and should have used it to call up an expert)

The United States Constitution and the Right to Die

The right to die is based on the notion that patients have a right to refuse treatment

In Cruzan, Guardians of patient in persistent vegetative state brought declaratory

judgment action seeking judicial sanction of their wish to terminate artificial
hydration and nutrition for patient. The United States Supreme Court addressed
for the first time the controversial issue of a patient's right to die. While the Court
found that a competent patient has a liberty interest in refusing life-sustaining
treatment, it differentiated the exercise of that right by a competent patient from
that by an incompetent patient. Since an incompetent patient cannot truly give
informed consent in the absence of a living will, the Court held that Missouri's
interest in the protection of life permitted it to "apply a clear and convincing
evidence standard in proceedings where a guardian seeks to discontinue nutrition
and hydration of a person diagnosed to be in a persistent vegetative state."

The decision permits a state to limit it consideration to those wishes previously

expressed by the patient and ignore decisions of another person acting on behalf
of the patient.

Most “right to die” law has continued to be established on a state to state basis; States
have adopted a hodgepodge of different laws: some allow the family to make the
decision, others don’t

Doctrine of substituted judgement: a person, committee, or institution attempts to

determine what the patient would do if the patient had decisional capacity or if the patient
was formerly competent it is possible to review the values of the patient (as evidenced by
patients statements) and determine whether that patient would choose to undergo the

Advance directives provide such info about an incompetent patients wishes in advance. It
makes the patients wishes known about medical treatment before the patient needs the
care. There are three kinds:

(1) Directive to Physicians (living wills)in TX the directive instructs the doc
not to use life support to extend the natural process of dying (if you are in the
terminal phase of an illness)

(2) Durable powers of Attorney: a power of attorney that will remain of effect
(or even become effective) upon the incapacity of the principal. This allows
someone else to make your health decisions if you cannot

(3) Out of Hospital Do Not Resuscitate Order: an order (signed by doc) that
allows patients in the terminal phase of an illness to refuse life-sustaining
treatment when outside the hospital

PATIENT SELF-DETERMINATION ACT: increases the role that advance directives play in
medical decision-making. Requires health care facilities that receive Medicare or
Medicaid fund to provide each patient with written info concerning the individual right
under state laws to make decisions concerning right to refuse treatment and the providers
policies respecting the implementation of such rights.

Under the act, Institutions must indicate in their records whether such info has been given
and must educate employees about advance directives.

What do you do if doc does not follow advance directive? Could try and get a court order
to remove life support or sue for battery (but remember, the law errs on the side of life)

Legal and Ethical Issues in Human Genetics

Gene therapy is a novel approach to treat, cure, or ultimately prevent disease by changing
the expression of a person's genes.

Gene therapy is very young and experimental. Many factors have prevented researchers
from developing successful gene therapy techniques. Hurdles include: the gene delivery
tool, understanding gene function, mulitigene disorders, high costs, and regulations.

Genetic tests are used for several reasons, including:

• carrier screening, which involves identifying unaffected individuals who

carry one copy of a gene for a disease that requires two copies for the disease
to be expressed;
• prenatal diagnostic testing;
• newborn screening;
• presymptomatic testing for predicting adult-onset disorders such as
Huntington's disease;
• presymptomatic testing for estimating the risk of developing adult-onset
cancers and Alzheimer's disease;
• confirmational diagnosis of a symptomatic individual; and
• forensic/identity testing.

Genetic information can also be used unfairly to discriminate against or stigmatize

individuals on the job. For example, people may be denied jobs or benefits because they
possess particular genetic traits--even if that trait has no bearing on their ability to do the
job. In addition, since some genetic traits are found more frequently in specific racial or
ethnic groups, such discrimination could disproportionately affect these groups.

In Mayfield, III v. Dalton, a US Marine challenged the military policy of

collecting and storing reference specimens of DNA from members of the active
duty and reserve armed forces. The stated purpose of the specimens is to identify
soldiers remains. The Marines argued that the samples constituted an
unreasonable seizure. The court held that the military has demonstrated a

compelling interest in both its need to account internally for the fate of its service
members and in ensuring the peace of mind of their next of kin and dependents in
time of war. The court further finds that when measured against this interest, the
minimal intrusion presented by the taking of blood samples and oral swabs for
the military's DNA registry, though undoubtedly a "seizure," is not an
unreasonable seizure and is thus not prohibited by the Constitution.

In Safer v. Pack, the doc treated P’s father for colon cancer. P later developed
colon cancer, which is a hereditary condition. P brought suit and alleged that the
physician had breached duty to inform those who were potentially at risk of
developing condition. The court agreed and held that: (1) physician has duty to
warn those known to be at risk of avoidable harm from genetically transmissible
condition; and that (2) physician's duty extends to members of immediate family
of patient who may be adversely affected by breach of duty.

The only federal law that directly addresses the issue of genetic discrimination is the
1996 Health Insurance Portability and Accountability Act (HIPAA). HIPAA prohibits
group health plans from using any health status-related factor, including genetic
information, as a basis for denying or limiting eligibility for coverage or for charging an
individual more for coverage.

In TX, employers cannot discriminate on the basis of genetic info.


Under the ADA, employers have to make reasonable accommodation unless the
accommodations (1) impose undue hardship or (2) fundamentally alters employers

Neither the ADA nor the rehabilitation Act requires employment of individuals where
such action would result in a direct threat to the health or safety of the individuals or
others in the workplace.

In Mauro v. Borgess Medical Center, Former employee brought action alleging

that former employer violated Americans with Disabilities Act (ADA) and
Rehabilitation Act when it laid him off from his position as surgical technician
after determining that he was infected with human immunodeficiency virus
(HIV). The court held that the virus that causes AIDS, was a direct threat to the
health and safety of others and could not be eliminated by reasonable

In determining whether HIV was a direct threat the court considered the
following factors:

1. nature of the risk (how disease is transmitted)

2. the duration of the risk
3. the severity of the risk
4. probability the disease will be transmitted and will cause
varying degrees of harm

Can you take seeing-eye dog into labor/delivery room? No, labor/delivery room is not a
public accommodation.


NATIONAL ORGAN TRANSPLANT ACT: requires Dept. Of Heath and Human Services to establish an
Organ Procurement Transplant Network to organize the distribution, allocation and
transplantation of organs in the US.

Organs from living donors:

Living donors who are legally competent may donate (but not sell) non-life-sustaining

In Strunk v. Strunk, the issue was whether the court had the power to permit a
kidney to be removed from an incompetent ward of the state upon petition of his
mother for he purpose of being transplanted into the body of his brother, who
was dying of a fatal kidney disease. (mother said it was also beneficial to
retarded brother because he was emotionally dependent on other brother). Court
held that under the doctrine of substituted judgement (the right to act for the
incompetent in all cases), the court has sufficient power to authorize the

In Little, NCM v. Little, (TX) the court was faced with the same situation as
above. The court held that the power of parents and guardians is limited to power
to consent to medical treatment and donation of kidney does not constitute
medical treatment. However, under the substituted judgement doctrine, the court
substitutes itself for the act incompetent and to act upon the same motives and
considerations as would have moved the incompetent. Here, the court holds that
trial court did not exceed its authority by authorizing guardian to consent to
transplant, in view that daughter would receive substantial psychological benefits
from donating a kidney.

In Head v. Colloton, a man who needed a bone marrow transplant found out that
a lady who matched his criteria was a on the donor registry. He sued the hospital
to obtain her name so he could contact her. The court holds that the same duty
that exists between patient and physician exists between physician and donor.
Therefore the donor has the same privacy rights as a patient and the record
sought by P is confidential and cannot be disclosed w/o donors consent.


Best way to donate organs is to tell your family

cannot sell any body part for profit (under fed law is a felony, under Tx law is a

Can’t donate organs if you have HIV


There are four levels of hospital certification: level I-IV, I being the best

EMS has to get consent (you can refuse EMS treatment) However, if you are unconscious
they can treat you – have implied consent

EMS techs are considered agents of the MS director

EMTALA tests: courts have developed tests to determine if hospital violates it

examination requirement:

1. “comparability test” did exam meet hospitals own standards (were

comparable exams given to other patients
2. “bad motive test”
3. “capability test”

Remember: misdiagnosis is not a violation of EMTALA nor is negligent exams (as long
as all exams are done in a negligent manner) it is not the goal of EMTALA to give a basis
for med/mal suits

In order to trigger EMTAL, the patient has to be on the hospitals property


Nuremberg Code:

• voluntary consent of human subject is absolutely essential

• experiment results should be unprocurable by other methods
• based on animal experimentation
• avoid unnecessary suffering
• should not be conducted if there is reason to believe death or disabling
injury will occur
• proper preparations
• human should be able to end experiment at any time
• scientist should be able to end experiment at any time

America does not have clean hands: subjects injected with radiation, Tuskegeee Syphilis Study,
Jewish Chronic Disease Hospital case (subjects injected with live cancer cells), Willowbrook
State Hospital (children admitted to hospital were given hepatitis as condition of admission)

Federal Policy: National Research Act established Department of Health and Human Services to
establish federal regulations:

The Act also required the establishment of institutional review boards (IRB) at institutions under
contract with the department of Health Education, and Welfare

45 CFR

• applies to anyone who gets federal funds

• requires the establishment of IRBs
• IRBs must be composed of five members (at least one who primary
concern is scientific and one whose primary concern is nonscientific, and one
member who is not affiliated with the institution)

Criteria for IRB approval:

• risks are minimized

• risks are reasonable
• selection of subjects is equitable
• informed consent is obtained
• protect privacy of subjects
• informed consent must be documented


The term "long-term care" refers to the type of medical or personal care services you need if you
become unable to care for yourself because of chronic illness, disability, loss of functional
capacity, or cognitive impairment.

Long-term care is different from traditional medical care. Traditional medical care treats physical
problems directly in an attempt to permanently cure or control them. Long-term care services
help a person maintain his or her ability to function, perform normal daily activities, or maintain a
normal lifestyle.

In Texas, most nursing home expenses are paid by Medicaid, a state and federal assistance
program for eligible low-income Texans. The rest are paid out-of-pocket by individuals or
through long-term care insurance.

To receive Medicaid, you must meet state and federal guidelines for income and assets. Many
people must pay for long-term care out of their own pockets until their assets shrink enough for
them to become eligible for Medicaid. This is called "spending down" your assets.
Medicare, a federal program which pays for health care for people over age 65 and for some
people under age 65 with disabilities, covers the cost of some skilled care in approved nursing
homes or in your home, but only in certain situations.


• Medicare hospital patients discharge date may only be determined by medical needs
• If asked to leave hospital, patients are entitled to notice of non-coverage
• Patients can appeal the decision

Alternatives to nursing home Medicaid:

(1) Home Health Care: Medicaid only covers part-time home health care
(2) Hospice Care: when terminal illness is involved, hospice care is an alternative to
nursing home care. Medicare will provide hospice care if patient is terminally ill and
has less than six months to live (and patient qualifies for Part A Medicare)
(3) Assisted living facilities: Residents pay for these facilities out of their own pockets

Requirements for nursing home Medicaid:

• 65 or older, disabled, blind, or have medical need for nursing home

• Income limits: Couple $3,072, individual $1,536 (monthly)

Federal Law:

A nursing home facility must care for its residents in such a manner and in such an
environment as will promote maintenance or enhancement of the quality of life of each

General Resident rights:

• free choice
• freedom form restraints (can only be used to ensure safety and with
written docs order)
• accommodation of needs
• privacy
• participation in other activities

Note: physical restraints includes using bed or wheelchair rails so residents cant get up,
or tucking in sheets so tightly so resident cant get up

Survey and inspection of nursing homes:

Regulatory agencies do not have to hold a full evidentiary hearing in order to cite
deficiencies or impose sanctions. However, they must comply with state and federal law
that governs the conducting of surveys and inspections.

Medicare does not pay for prescription meds or long term care (Medicaid does if you qualify for
the income limits)

Legal and Ethical Issues Surrounding Aids and Other Communicable Diseases

The special characteristics of aids and of the aids epidemic present special challenges because of
a number of reasons:

(1) widespread continuing fear and ignorance make concerns of privacy and
confidentiality even more important
(2) the fact that Aids cannot be spread through casual contact limits the need for
disclosure of info about infection
(3) the fact that AIDS is presently incurable makes prevention all the more essential

All states now require physicians to report AIDS cases to the state health department

In Texas, known case must be reported by clinical/hospital laboroties, suspected cases must be


IN Doe v. Marselle, Conn. has statute that makes it a violation to disclose confidential
AIDS testing info. Here, the patient disclosed to the doc that she had AIDS. The docs
surgical assistant disclosed this info to her sons who were illegal drug users and friend of
the patient. Patient alleged that doc and assistant had violated the confidentiality statue.
The issue was whether a plaintiff must allege that the person who violated that provision
intended to engage in the prohibited conduct and intended to produce the resulting injury.
The court holds that a willful violation of § 19a-583 requires only a knowing disclosure
of confidential human immunodeficiency virus (HIV) related information. The court
reasoned that the purpose of the statute is to prevent disclosure of confidential AIDS info
except in very limited and discrete circumstances.

States are divided over the amount of privacy vs. the public health concerns of AIDS

Majority view: people posses a confidential right to privacy regarding their condition as
HIV positive

Minority view: less protection is given to those who are HIV positive


General consent is enough

Under similar statute as TX, patient was tested w/o his consent. Doe thought it was
necessary, court said no standing (no injury in fact – future harm too remote)

You can’t require a person to get AIDs test unless:

• if you expose cop or corrections officer

• pregnant woman wanting care
• insurance providers prior to providing coverage
• if medical procedure could expose medical personal to exposure (if there
is time)
• as a bonafide job qualification
• mental health resident (retard or crazy)

Test results are confidential with limited exceptions

In TX a spouse may receive a test result if the subject tests positive to HIV (infected
persons often have a duty to disclose their infection to their sexual partners)