Significant health care cases of 2022 included a surprise billing unfair trade practices case, a class action recognizing a patient’s constitutionally protected interest in their inpatient classification and a ruling recognizing “innovator liability” of a brand name drug’s developer for the harm to a consumer by a bio-equivalent genetic drug. Various courts also addressed informed consent standards, the duty of medical device manufacturers to warn of safety risks and, lastly, the meaning of “actionable harm” in the context of medical malpractice actions. More about these and some additional cases follows.
The purpose of this Alert is to summarize key cases decided during the past year; please refer to the cases for complete information.
1. Medicare Beneficiaries May Challenge a Hospital’s Decision to Reclassify Them as Observation Patients
The decision about whether a Medicare beneficiary should be admitted to a hospital as an inpatient (for which services are covered by Medicare Part A) or placed on observation status (for which services are covered by Medicare Part B) can have significant financial consequences for the patient, as well as the hospital involved. For example, the so-called “Two-Midnight Rule” provides that post-hospital care at a skilled nursing facility is a covered benefit only if the individual was classified as an inpatient at the hospital for a period crossing at least two midnights.
The plaintiffs in this case, a nationwide class of Medicare beneficiaries who were formally admitted to a hospital as inpatients before their subsequent reclassification as outpatients receiving observation services, alleged among other things, that the Secretary of the U.S. Department of Health and Human Services (“HHS”) violated their due process rights by failing to provide them with an administrative review process when they were reclassified from inpatients to outpatients on observation status.
In 2020, the Connecticut District Court (Shea, J.) enjoined HHS to create such a process. Last year, the Second Circuit Court of Appeals affirmed, agreeing that the plaintiffs had a constitutionally-protected property interest in their Medicare Part A benefits and that the decision to reclassify a patient as an observation patient could fairly be treated as state action, a required element for a due process claim.
Barrows v. Becerra, 24 F.4th 116 (2d Circ. 2022).
CMS has posted information on its website regarding the appeals process found under the topic Appeals Under Original Medicare, but notes that the appeals process is “still under development and not currently available.”
2. CT District Court Finds No Implied Private Right of Action under State Surprise Billing Law, but Permits Related CUTPA Action to Proceed
Connecticut’s surprise billing law (CGS §38a-477aa) prohibits health insurance carriers from imposing on a patient a coinsurance, copayment, deductible or other out-of-pocket expense for out-of-network emergency services that is greater than the expense that would be imposed if such services were rendered by an in-network health care provider. The law also requires that insurers reimburse out-of-network emergency medical providers at the greatest of the following rates: (i) the in-network fee; (ii) the usual, customary and reasonable rate (as set forth in a database called the FAIR Health database); or (iii) the Medicare rate.
In NEMS PLLC v. Harvard Pilgrim Health Care of Connecticut Inc., the plaintiff was an emergency medical provider who, through its employed physicians, furnished out-of-network services to certain patients insured by the defendant insurer. The provider billed the insurer for these services, but the insurer did not pay the provider the difference between the in-network rate and the FAIR Health database rate, which was the highest of the applicable rates. Instead, the insurer passed the cost on to the patients as amounts owed by them. Since Connecticut’s balance billing law (CGS §20-7f(b)(2)) prohibits providers from billing patients for emergency services covered under a health care plan and rendered by an out-of-network health care provider for more than the applicable coinsurance, copayment, deductible or other out-of-pocket expense, the provider sought to collect the amounts owed from the insurer.
The insurer moved to dismiss, claiming that there is no private right of action under the surprise billing law. The Connecticut District Court (Nagala, J.) agreed.
The provider also alleged that the insurer’s failure to comply with the surprise billing law violated the Connecticut Unfair Trade Practices Act (CGS §42-110a et seq. (“CUTPA”)), which contains a private right of action. The District Court, predicting how the Connecticut Supreme Court would rule on this issue, determined that a plaintiff can maintain a CUTPA action where there is an alleged violation of a law that regulates a specific type of insurance-related conduct, and found that the surprise billing law was just such a law. The court also found that certain provisions of the state’s health insurance law that did not specifically relate to insurance policy provisions (to which the provider was not party) could also proceed as violations of CUTPA.
NEMS PLLC v. Harvard Pilgrim Health Care of Connecticut Inc., ---F.Supp.3d----, 2022 WL 2834608.
The court dismissed the insurer’s claims that the provider’s allegations were preempted by the Employee Retirement Income Security Act (“ERISA”). The court reasoned that the surprise billing law applies equally to all insurance plans, not only plans governed by ERISA, and does not act “immediately and exclusively” on ERISA plans.
3. Chiropractic Board Ruling Not Determinative of Applicable Legal Standard for Informed Consent
A patient who suffered injuries (a stroke and cervical arterial dissection) following chiropractic treatment brought an action against the chiropractor and his practice for, among other things, violation of the duty of informed consent. The Connecticut Board of Chiropractic Examiners ruled in 2010 that chiropractors are not required to address these particular injuries when obtaining informed consent.
The Superior Court found that the issue was not whether the defendants had a duty to inform patients of the risk, but rather whether the defendants violated that duty. The court found lack of informed consent is not determined by an expert medical standard of care but rather by a lay standard of materiality based upon what risks would be material to a reasonable patient, and it denied the defendants’ motion for summary judgment.
The court also based its decision, in part, on expert testimony and a study indicating that chiropractic treatment may in fact cause the injuries the patient suffered, and it rejected the defendants’ argument that imposing a duty in this case would be against public policy.
Kulvete v. Curry, 2022 WL 2663820.
Practitioners are reminded that the duty to obtain informed consent must be based on what a reasonable patient would have found material for making a decision regarding a proposed therapy and the dangers inherently and potentially involved.
4. Appellate Court Denies New Trial in Case Involving Improper Disclosure of Medical Records
Four years after the Connecticut Supreme Court’s significant decision in Byrne v. Avery Center for Obstetrics and Gynecology, P.C., which established a private cause of action for breach of the physician-patient duty of confidentiality (see our prior discussion of this case), the Appellate Court of Connecticut affirmed a denial of the defendant medical provider’s motion for a new trial.
A jury awarded the plaintiff over $800,000.
The defendant medical practice sought a new trial. It argued that its actions were not the proximate cause of the plaintiff’s injuries because it was the probate court that made the records public.
The Appellate Court also affirmed the trial court’s decision regarding the calculation of the plaintiff’s future damages and the award of offer-of-judgment interest to the plaintiff.
The Connecticut Supreme Court has declined to review the decision.
Byrne v. Avery Center for Obstetrics and Gynecology, P.C., 212 Conn. App. 339, cert. denied, 343 Conn. 933.
This case illustrates the point that health care providers are well-advised to seek the advice of experienced counsel when responding to unusual requests for the disclosure of confidential medical records.
5. Negligent Placement and Removal of Electrodes Not Medical Malpractice
The Superior Court in New London denied a medical practice’s motion to dismiss a patient’s claim that its employees negligently placed EEG electrodes on the patient’s scalp and forehead, causing burns and other injuries. As the patient did not allege medical malpractice, she did not attach an opinion letter from a similar health care provider as required by Connecticut law (CGS §52-190a(a)) for medical malpractice claims.
The court noted the three elements required for medical malpractice claims (other than claims involving lack of informed consent or gross negligence), namely, whether: (1) the defendants were sued in their capacities as medical professionals; (2) the alleged negligence was of a specialized medical nature that arises out of the medical professional-patient relationship; and (3) the alleged negligence was substantially related to medical diagnosis or treatment and involved the exercise of medical judgment. The court found that the conduct of the practice’s employees merely involved the preparation and application of the electrodes for a test ordered by a medical practitioner and the employees provided no diagnosis or evaluation of the patient requiring medical judgment. The patient’s claim therefore was for mere negligence, not medical malpractice, and denied the practice’s motion to dismiss.
Pelletier v. Connecticut Neurodiagnostics, LLC (2022 WL 620356).
In the interest of avoiding injuries of the sort alleged, providers should consider whether to require periodic training for their staff who perform tasks that are similar to applying and removing electrodes that do not require the exercise of medical judgment.
6. Connecticut Supreme Court Affirms Prior Decisions on When “Actionable Harm” Occurs
Connecticut law (CGS §52-584) requires that a medical malpractice action against a hospital be brought within two years from the date the “injury” is first sustained or discovered or in the exercise of reasonable care should have been discovered. Connecticut courts have consistently held that the term “injury” refers to “legal injury” or “actionable harm,” which requires both knowledge of the physical harm as well as knowledge of its connection to the defendant’s negligence for purposes of the Connecticut statute of limitations.
In Peek v. Manchester Memorial Hospital, 342 Conn. 103 (2022), the plaintiff was a hospital patient who sustained injuries from a fall despite her placement on a fall prevention protocol. At the time of her fall, the patient was not aware of the cause of the fall. The hospital moved for summary judgment on the basis that the action was time barred because it was filed more than two years after the date of the fall. The patient argued that the statute of limitations should begin to run on the date when she learned that she was on fall risk protocol from her doctor’s staff, not on the date of her fall.
The Connecticut Supreme Court discussed at some length prior cases which found that the term “injury” in the medical malpractice statute refers to the plaintiff’s knowledge of the causal connection between the defendant’s alleged negligence and the physical harm. The court rejected the hospital’s argument that there should be two separate standards for negligence claims, depending on whether the harm is obvious (as it argued the plaintiff’s injuries were) or latent.
The court found that prior case law spanning more than 35 years has consistently interpreted “injury” to refer to “actionable harm,” and that the legislature never sought to correct this interpretation. The court also looked at the legislative history of the statute and found support for the conclusion that “injury” was intended to mean a legally recognized injury, not just physical hurt or loss.
Health care practitioners should bear in mind that the statute of limitations for medical malpractice actions may only start to run after a patient learns of an injury.
7. Superior Court Finds Med Mal Opinion Letter Deficient, Despite Dentist’s Admission of Wrongful Tooth Extraction
The Superior Court granted a dentist’s motion to dismiss a claim of medical malpractice against a dentist even though she admitted to extracting the wrong tooth.
In Pham v. Kulkarni, 2022 WL 301693, the patient sought dental care for a decaying molar. The dentist obtained the patient’s informed consent for an extraction of the molar, but removed the wrong tooth. When the patient visited the dentist the next day complaining of pain, the dentist admitted to the error.
The patient brought a negligence action against the dentist and her practice and attached a written opinion letter of a similar health care provider, as required by CGS §52-190a(a).
The dentist argued that the opinion letter did not meet the strict requirements of the statute as it did not state that there appeared to be evidence of medical negligence, nor did it include a detailed basis for the formation of the opinion. The court agreed, noting prior Connecticut Supreme Court case law which determined that the written opinion letter must state the similar health care provider's opinion as to the applicable standard of care, the fact that the standard of care was breached, and the factual basis of the similar health care provider's conclusion concerning the breach of the standard of care. In this case, the opinion letter fatally omitted a statement of the standard of care, a breach of the standard of care and an explicit statement that the dentist was negligent.
The court also noted that the plaintiff’s claim might have been meritorious, but found that there was no precedent to allow a case to go forward where the opinion letter made no statement about negligence, the standard of care or a deviation from the standard of care.
8. CT Supreme Court Finds that CT Product Liability Act Provides a Cause of Action against Medical Device Manufacturers that Fail to Warn of Safety Risks
In Glover v. Bausch & Lomb, Inc., 343 Conn. 513, (2022), a case of first impression, the Connecticut Supreme Court answered two questions regarding the Connecticut Product Liability Act (“CPLA”).
The first question was whether the CPLA provides a cause of action based on a manufacturer's alleged failure to: (1) report adverse events to a regulator like the U.S. Food and Drug Administration (the “FDA”) following approval of a device; or (2) comply with a regulator's post-approval requirements. The court found that while the federal Food, Drug, and Cosmetic Act (“FDCA”) expressly or impliedly preempts many state law claims (including claims based solely on violations of FDCA requirements), the plaintiff’s claim fell within a narrow class of claims that are not preempted. The court found that even though the plaintiff’s claim was based on conduct that violated the FDCA, the plaintiff was suing because the conduct violated the CPLA. Moreover, the court found that the CPLA itself imposes a duty on manufacturers to comply with federal law to provide suitable warnings to the person “best able” to take or recommend precautions against the potential harm (CGS §52-572q(d)). In this case, the court agreed with the plaintiff that the person “best able” to take or recommend such precautions was the FDA.
The second question was whether the CPLA bars a claim under the Connecticut Unfair Trade Practices Act (“CUTPA”) based on allegations that a manufacturer deceptively and aggressively marketed and promoted a product despite knowing that it presented a substantial risk of injury. Here, the court found that there was such a bar. The court noted that the CPLA is intended to serve as the exclusive remedy for a party who seeks recompense for personal injury, death or property damage caused by a product defect. The court noted that there are exceptions to the exclusivity provision where there is no claim of personal injury, death or property damage, or where there is no claim of a product defect. In this case, however, the plaintiff alleged personal injury due to a product defect and the court was unwilling to extend the exceptions for such a case.
Following the Connecticut Supreme Court’s resolution of these two questions, the Second Circuit Court of Appeals concluded that the plaintiff’s CPLA claims were not preempted by the FDCA and affirmed the Connecticut District Court’s denial of the plaintiff’s request to amend her complaint to include the CUTPA claim.
9. Brand-Name Pharmaceutical Company May Be Liable for Harm Caused by Generic Drug
Brand-name drug companies have patent exclusivity over the drugs they manufacture for at least 20 years. Upon expiration of the patent, generic drug companies may enter the market with drugs that are bio-equivalent to a brand-name drug, and they are required by federal law to use the same warning label for their drugs as the brand-name drug’s label. Last year, the Connecticut District Court (Meyer, J.) determined that the Connecticut Supreme Court would recognize the theory of “innovator liability,” which posits that the inventor and manufacturer of a brand-name drug may be liable under certain circumstances for harm caused to a consumer by a bio-equivalent generic drug that was manufactured and sold by a different company.
In Doran v. Glaxosmithkline PLC, ---F.Supp.3d--- (2022), a college student was prescribed a brand-name drug for the treatment of bipolar disorder. The prescribed drug was manufactured and marketed by Glaxosmithkline PLC and Glaxosmithkline LLC (collectively, “Glaxo”), but the pharmacist (presumably as permitted by state law) filled the prescription with a bio-equivalent generic drug that was manufactured and sold by another company. After taking the drug, the student began to experience side effects and ultimately died from a condition known as HLH. When the student was first prescribed the drug, there was no warning label about the risk of HLH, but a few months later, Glaxo was required to add a warning about HLH to its label.
The decedent’s father brought suit against Glaxo under the Connecticut Product Liability Act (“CPLA”) for failure to warn and misleading advertising that caused the student’s death. The father alleged that Glaxo knew or should have known of the risk of HLH at least as early as the time when his daughter was first prescribed the drug. Glaxo moved to dismiss the claim on the basis that it could not be liable because it did not manufacture or otherwise benefit from the drug.
The District Court denied Glaxo’s motion to dismiss. Acknowledging the initial intuitive appeal of the defendants’ argument, the court nevertheless noted that the CPLA does not impose liability only if the defendant’s own product caused the harm. The court found that the complaint stated a claim for strict liability for failure to warn, in large part because the prescribing physician relied on Glaxo’s inadequate warning that (as required by federal law) was copied by the generic drug manufacturer whose drug was used to fill the prescription.
Keep in mind that the Connecticut District Court predicted how the Connecticut Supreme Court would rule on this issue, so it remains to be seen whether the Connecticut Supreme Court will formally adopt the doctrine of innovator liability in the future.
10. Appellate Court Confirms Dental Commission’s Finding on Failure to Obtain Informed Consent
The Appellate Court of Connecticut dismissed the appeal of a pediatric dentist who was disciplined by the Connecticut State Dental Commission for, among other things, failure to obtain a parent’s informed consent for dental work on her child. In Idlibi v. Connecticut State Dental Commission, 212 Conn. App. 501, cert. denied, 345 Conn. 904, the child’s mother had signed consent forms when the child was first examined, and she had been advised that the patient would need at least one stainless steel crown and might require fillings or crowns on additional teeth.
On the day of the procedure several months later, the mother signed another consent form which stated in part that she understood that the child’s doctor “may find or discover additional conditions which in his professional judgment make it advisable to perform additional or different procedures than those planned,” and which authorized the doctor and his assistants “to perform such other procedures which they deem advisable in their professional judgment.” At the time she signed the form, the mother informed the dentist that she expected to hear from him after he took X-rays so that they could determine next steps. The dentist did not consult with the mother and placed eight stainless steel crowns in the patient’s mouth. The mother then filed a complaint with the State Department of Public Health, which presented the statement of charges to the State Dental Commission (the “Commission”).
The dentist claimed that the informed consent was proper, but the court agreed with the Commission’s determination that the form that the mother signed on the day of the procedure was silent on the mother’s understanding of the procedure and did not govern because she had specifically told the dentist that she expected to hear from him during the procedure. The dentist also argued that his failure to entertain the mother’s request was legally insufficient to support a claim of lack of informed consent and cited a medical malpractice case to support his contention, but the court found that the standards of medical malpractice claims do not apply to administrative licensing proceedings and that the Commission was authorized to ascertain for itself the standard of care, which included the proper standard by which to obtain informed consent.
In addition, the dentist claimed that the Commission exceeded its statutory authority when it imposed disciplinary sanctions against him because the relevant statute (CGS §20-114) authorizes sanctions for “cruelty, incompetence, negligence or indecent conduct,” and the Commission’s finding of lack of informed consent did not amount to a finding that he was incompetent or unskillful. The court, however, agreed with the trial court that the terms “incompetence” and “negligence” in the statute are equivalent to the term “standard of care,” and that the Commission was therefore allowed to take action against the dentist for falling below a standard of care.
The Connecticut Supreme Court has denied certiorari.
Providers should be mindful of discussions they engage in with a patient after obtaining informed consent and may consider having a patient re-sign a consent form to reflect such discussions if they change the nature of the original consent.