Health Care Litigation in Colorado: a Survey of Recent Decisions

• Publication year: 2001
• Pages: 91
• Citation: Vol. 30 No. 8 Pg. 91

30 Colo.Law. 91 Colorado Lawyer 2001.

2001, August, Pg. 91. Health Care Litigation in Colorado: A Survey of Recent Decisions

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91

Vol. 30, No. 8, Pg. 91

The Colorado Lawyer
August 2001
Vol. 30, No. 8 [Page 91]

Specialty Law Columns
Health Law Forum
Health Care Litigation in Colorado: A Survey of Recent Decisions
by Thomas J. Kresl

Colorado appellate courts decided eleven cases this past year that dramatically affect health care litigation in Colorado These recent health care decisions address fundamental issues such as parties that may be sued, circumstances necessary for liability to arise, damages that can be recovered, and the manner in which judgments are to be paid. Several cases also address procedural and evidentiary requirements in litigating health care cases. Although an exhaustive analysis of these cases is beyond the scope of this article, the important aspects of these recent decisions are discussed, emphasizing the impact that such cases may have on health care attorneys and their clients

Vicarious Liability of
Professional Medical Corporations

More than fifty years ago, Colorado's judiciary addressed the issue of whether business entities could be held vicariously liable for the negligence of their physician employees.1 Since then, precedent has continuously held that hospitals have no ability to control the independent judgment of physicians in their practice of medicine; therefore hospitals are not vicariously liable for physicians' negligence. However, the issue of vicarious liability is less clear with other types of business entities.2

Russell v. Pediatric Neurosurgery, P.C.,3 addressed the issue of whether CRS § 12-36-134, a provision in the Colorado Medical Practice Act4 concerning the formation and operation of professional medical service corporations, permitted a respondeat superior claim against a professional corporation for the negligence of its physician employee. In Russell, the Colorado Court of Appeals ruled that in enacting the Medical Practice Act, the General Assembly authorized "corporations to 'practice medicine,' albeit in a limited and circumscribed way."5 Therefore, the statute does not preclude imposition of vicarious liability even if a physician shareholder of the professional corporation maintains insurance coverage in a sufficient amount. Instead, the statute provides that the shareholder is not jointly liable for the acts or omissions of another shareholder if such insurance exists.6

The Russell decision is important because it potentially provides for an additional cause of action in medical negligence cases where the plaintiff's treating physician is a member of a professional corporation. The decision also creates the potential for conflict between the physician and the professional corporation, especially where different companies insure the physician and the professional corporation or where the plaintiff has a large damage claim in excess of the policy limits of the physician and the professional corporation. Practitioners representing both the physician and the professional corporation should discuss potential conflicts with their clients before agreeing to joint representation.

Emergency Medical
Treatment and Active Labor Act

Congress enacted the Emergency Medical Treatment and Active Labor Act7 ("EMTALA") in 1986 to address the problem of hospitals "dumping" patients who were without medical insurance but were in need of medical care.8 Although the statute was intended to help indigent patients, the rights extended under EMTALA apply equally to all patients, regardless of their ability to pay.9

EMTALA imposes two requirements on hospitals that are subject to its provisions.10 First, the hospital must conduct an initial medical examination to determine whether patients are suffering from an emergency medical condition.11 Second, if an emergency medical condition exists, the hospital must stabilize patients before transporting them to a different facility.12 Two recent cases in the Tenth Circuit Court of Appeals, Phillips v. Hillcrest Medical Center13 and Ingram v. Muskogee Regional Medical Center,14 clarified what a participating hospital must do to comply with these two provisions.

Appropriate Medical
Screening Examination

In Phillips, the Tenth Circuit interpreted the medical examination provision of EMTALA and, for the first time, expressly adopted a "disparate treatment" standard for liability under the statute. To the extent it was unclear before, a hospital's obligation to provide an emergency medical screening under EMTALA is measured by whether it treats every patient perceived to have the same medical condition in the same manner according to its established procedures. Unless each patient, regardless of perceived ability to pay, is treated in a uniform manner in accordance with the hospital's existing procedures, EMTALA liability attaches.15

The court noted that an "uneasy intersection" exists between state law medical negligence claims and EMTALA claims. Under EMTALA, a hospital can escape liability by complying with its pre-existing standards, even if the practical effect is an inadequate examination. The statute merely requires that a hospital perform an appropriate screening examination for an emergency medical condition, but does not provide a remedy for an inadequate or inaccurate diagnosis.16

EMTALA is a strict liability statute that looks only at the participating hospitals' actions. Because hospitals are liable simply for not treating patients uniformly, no particular motive is required for liability to be imposed on a hospital subject to

EMTALA's provisions. Therefore, while testimony regarding a hospital's knowledge of a patient's lack of insurance may be relevant to explain a failure to abide by established procedures, it alone does not establish a violation of EMTALA's requirement of uniform treatment.17

Appropriate Transfer

The Ingram decision involved a claim that a medical center failed to stabilize a patient by inserting chest tubes prior to transferring the patient to a different facility for further care. The plaintiff claimed that such action constituted a violation of
EMTALA's "appropriate transfer" requirement.18 The Tenth Circuit was unable to find precedent from any jurisdiction addressing whether such a transfer is appropriate within the meaning of the statute. Therefore, the court adopted the same standard it applied to the "appropriate medical examination" requirement of
EMTALA, reasoning that the two provisions were comparable in language and intent.

In interpreting EMTALA's "appropriate medical screening provision," the court had previously ruled that each hospital determines its own capabilities by establishing a standard procedure, which is all that a hospital needs to follow in order to avoid liability under EMTALA.19 The "appropriate transfer" requirement of EMTALA is construed similarly, meaning that a hospital's capacity to provide medical treatment to minimize the risks of transfer is measured by its...