News, Insights & Events
2018 Round-Up: Key Connecticut Court Decisions Impacting Health Care Providers
January 30, 2019
Pullman & Comley
Connecticut state and federal courts faced a number of significant health care issues last year. We have summarized those cases that we think are particularly relevant to Connecticut hospitals, group practices and individual practitioners. If you would like to discuss any of the matters addressed in these cases, please contact one of our Health Care Law attorneys.
Please also visit Connecticut Health Law, a Pullman & Comley, LLC blog, where we provide insights on developments in the law affecting hospitals, physician groups, pharmaceutical and medical device companies and other health care providers and suppliers.
Supreme Court Establishes Private Cause of Action for Breach of Confidentiality
The Connecticut Supreme Court began 2018 with an important decision recognizing a common law duty of confidentiality arising from the physician-patient relationship and establishing a new private cause of action for breach of this duty. The case is noteworthy because the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) does not create a private right of action for patients whose medical information is disclosed without their consent and Connecticut General Statutes §52-146o, which limits disclosure of patient information by physicians, surgeons and other licensed health care providers, does not explicitly provide a cause of action (or any other remedy) for improper disclosures of confidential communications. (See a more detailed discussion of this case in our prior blog.)
In Byrne v. Avery Center for Obstetrics and Gynecology, P.C., counsel for the putative father in a paternity suit subpoenaed a medical practice for the health records of one of its patients with whom the putative father had had a relationship. The medical practice responded to the subpoena by mailing the patient’s records to the Probate Court, where the records became publicly available and were accessed by the putative father. The patient claimed that she suffered harassment and extortion threats from the putative father as a result of the disclosure and brought an action against the medical practice to recover damages for, among other things, negligent infliction of emotional distress and negligence in failing to use proper and reasonable care in protecting her records, including disclosing them without authorization in violation of C.G.S. §52-146o and HIPAA. The trial court dismissed the patient’s claims for negligence and negligent infliction of emotional distress, finding that these claims were essentially claims for violations of HIPAA and were therefore preempted because HIPAA bars private suits.
This case made its way to the Connecticut Supreme Court twice. On the second appeal, the Court determined that the trial court incorrectly granted summary judgment in favor of the medical practice and recognized a duty of confidentiality arising from the physician-patient relationship. Notably, the Court rejected the medical practice’s argument that the subpoena fell within an exception to C.G.S. §52-146o that permits disclosures without patient consent for “statutes, regulations or rules of court” since the subpoena was issued without court order. Further, by mailing the patient’s medical records directly to the Probate Court, the practice did not comply with HIPAA’s rules governing responses to subpoenas without court order, since the practice failed to obtain assurances either that the patient had been notified of the subpoena or that a protective order had been sought. The Court also found that the practice failed to comply with the terms of the subpoena itself, as the subpoena required the practice’s custodian of records to appear in person before the Probate Court.
While the Court limited its holding to the physician-patient relationship, all licensed providers would be well-advised to take additional precautions to ensure that patient medical records are treated in a confidential manner. For example, in addition to the mandatory training required by HIPAA, staff should be reminded of the rules governing patient confidentiality on a regular basis, and such training should include the process for responding to subpoenas and other requests for patient information.
Hospital Liability for the Acts of its Residents and Non-Employee Physicians
In 2016, the Connecticut Supreme Court decided that under certain circumstances a hospital may be vicariously liable for the medical malpractice of both its actual agents (where the agent’s action is expressly authorized) and apparent agents (where a third party reasonably believes the agent has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations) (Cefaratti v. Aranow). Connecticut courts continued to wrestle with these issues in 2018.
For example, in Gagliano v. Advanced Specialty Care, P.C., the Supreme Court of Connecticut decided that there was sufficient evidence to find that a surgical resident was the actual agent of a teaching hospital and held the hospital vicariously liable for the resident’s negligence during a procedure which resulted in serious injuries to the patient. The Court noted that three elements are required to show the existence of an actual agency relationship: (1) a manifestation by the principal (the hospital) that the agent (the resident) will act for the principal; (2) acceptance by the agent of the undertaking; and (3) an understanding between the parties that the principal will be in control of the undertaking. The Court found that the term “undertaking” encompassed the entire surgical residency such that evidence that related to the hospital’s general right to direct and control the resident’s conduct was also relevant to the hospital’s right to control his surgical performance. The Court noted that only the general right to control, and not the actual exercise of specific control, must be established; in other words, agents may be vested with considerable discretion and independence in how they perform their work for the principal’s benefit, and yet still be deemed subject to the principal’s general right to control. Importantly, the Court made clear that it was not deciding whether residents and physicians are “per se” agents of hospitals – only that the evidence in this case was sufficient to support the finding of an agency relationship. (See a more detailed discussion of this case in our prior blog.)
With respect to apparent agency, Cefaratti established two alternate standards for determining whether a non-employee physician is the apparent agent of a hospital—one test for when the treating physician was chosen by the principal (that is, the hospital) and a second test for instances when the patient selected the specific person who actually provided the services. The first test was called into question last year in Saunders v. Lim, a wrongful death action brought by the administratrix of her decedent-son against a physician and a hospital. The decedent had complained of abdominal pain and asked his mother to bring him to the hospital. The administratrix testified that the defendant-hospital was chosen because it was the closest hospital and because the decedent’s primary care physician was affiliated with that hospital. The administratrix asserted claims of negligence on the part of the physician and vicarious liability on the part of the hospital based on apparent agency (the physician who treated the decedent was not an employee of the hospital, but an employee of a contractor engaged by the hospital to provide the emergency department with physicians). The Superior Court (J.D. New Britain) set forth the elements of the apparent agency test articulated in Cefaratti where the principal chooses the treating physician, namely: (1) the principal (hospital) held itself out as providing certain services; (2) the plaintiff (patient) selected the principal on the basis of its representations; and (3) the plaintiff relied on the principal to select the specific person who performed the services that resulted in the harm complained of by the plaintiff. In its motion for summary judgment, the hospital argued that the second element of this test was not met because the decedent did not rely on any representations made to him by the hospital in selecting its emergency department-- he simply went to the closest emergency department. The court denied the hospital’s motion, finding that the hospital held itself out as providing emergency department services and that it was a question of fact as to whether the hospital was selected on the basis of this representation.
In Angeles v. Windham Community Memorial Hospital, Inc., a wrongful death action was brought against a hospital, alleging that the hospital was liable for the negligence of two physicians who treated the decedent child in the hospital’s emergency room based on actual agency and apparent agency. The physicians were employees of a medical practice with whom the hospital contracted to provide emergency room services. The Superior Court (J.D. Hartford) found that the physicians were not the actual agents of the hospital, relying on the language of the service agreement between the hospital and the medical practice which provided that the hospital did not have a right to control how the physicians performed emergency medical services at the hospital; rather, that right was vested exclusively in the practice group.
With respect to the claim of apparent agency, however, the court found that there was a question of fact as to whether the second element of the first Cefaratti test (that the patient selected the hospital on the basis of its representations) could be met when someone other than the patient selects the hospital on the basis of the hospital’s representations. In this case, the child was brought to the hospital’s emergency department upon the instruction of her pediatrician. The court denied the hospital’s motion for summary judgment, finding that this second element could be met in certain cases, such as when a patient is incapable of choosing the hospital by reason of unconsciousness or infancy, and someone responsible for the patient’s care selects the hospital on the patient’s behalf.
This area of the law remains somewhat in flux, but given the importance of the vicarious liability issue, hospitals are well advised to consider actual agency and apparent agency issues in administering residency programs and contracting with non-employee physicians.
CT Supreme Court Holds that Estate Cannot Maintain Med Mal Case On Behalf of a Non-Patient
Last year, the Connecticut Supreme Court held that the estate of a patient’s mother cannot sue a health care provider under the state’s medical malpractice law because the estate was not a patient of the provider. In Levin v. State, a psychiatric patient fatally stabbed his mother during an approved home visit from a residential mental health-care facility operated by the State Department of Mental Health and Addiction Services. As is required when bringing a claim against the State, the estate sought authorization from the State Office of the Claims Commissioner to bring the action, which the estate alleged was medical malpractice in that the facility was negligent in allowing the patient to make unsupervised visits despite knowing that he had been acting in an increasingly threatening manner toward his mother. The Court affirmed the trial court’s grant of the facility’s motion to strike, finding that Connecticut law does not recognize medical malpractice claims by non-patients. The Court also noted that the estate had not sought authorization to bring an ordinary negligence claim (as opposed to a malpractice claim) against the facility and so it could not decide the case on the basis of ordinary negligence.
This case may have had a very different outcome if the estate had sought permission to bring an ordinary negligence claim instead of a malpractice claim.
Conservator Owed Duty to Nursing Home to Secure Timely Medicaid Benefits
In 2001, the Connecticut Supreme Court held that a nursing home could recover, through an action on a probate bond, the losses it suffered as a result of a conservator’s failure to file a timely application for Medicaid benefits on behalf of the ward (Jewish Home for the Elderly of Fairfield County, Inc. v. Cantore). Closing a “liability loophole,” the Appellate Court of Connecticut recently found that a conservator owed a nursing home this duty even in the absence of a probate bond. In Bloomfield Health Care Center of Connecticut, LLC v. Doyon, a nursing home petitioned the Probate Court to appoint an involuntary conservator to oversee a patient’s estate for the purpose of assisting him with his finances and Medicaid application and to ensure that it would be compensated for its services. The conservator was appointed in April 2014 but due to the conservator’s delays in completing the Medicaid application, the ward did not begin to receive Medicaid benefits until more than a year later. The nursing home sued the conservator for negligence, arguing that it was readily foreseeable that the ward would be unable to pay for the cost of his care if the conservator failed to submit a timely Medicaid application on his behalf and that the nursing home would suffer harm as a result. The court agreed and found support for its decision in public policy, noting, for example, that holding a conservator personally liable for negligence would incentivize conservators to carry out their duties in a timely manner and with due care. The court also rejected the conservator’s argument that, as a court-appointed conservator, he was entitled to quasi-judicial immunity. The court found that immunity applies only when the conservator takes specific action that is expressly authorized or approved by the Probate Court, which was not the case here.
It is unclear if this decision could be extended to other types of health care providers since the court noted that nursing homes differ from other types of creditors in several respects, including that nursing homes provide critical services (shelter, food and care) to a vulnerable segment of the population and because they are statutorily limited in their ability to refuse to provide or discontinue services to the indigent.
Assisted Living Contract Held Not Unconscionable
In Emeritus Senior Living v. Lepore, the Appellate Court of Connecticut faced the question of whether a residency agreement for an assisted living facility was unconscionable and against public policy. The agreement was executed by the resident of the facility and her daughter, as representative and power of attorney, and provided that the representative would be jointly and severally liable with the resident for failure to pay the fees for the resident’s care. The representative made a number of monthly payments to the facility but then stopped paying the monthly charge and the facility brought suit to recover the amounts owed. The trial court found that the contract was unconscionable and against public policy because the payment terms constituted one paragraph in a multipage contract. The Appellate Court disagreed, noting that for a contract to be held unconscionable there must be a showing of the absence of meaningful choice on the part of one of the parties together with contract terms that are unreasonably favorable to the other party. The court found no evidence that the representative had no meaningful choice as to whether to select the facility as the provider of assisted living services for her mother. The court also found that the language of the agreement was sufficiently clear to provide reasonable notice that the representative would be obligated to pay the fees for the facility’s services if the resident did not. In addition, the court noted that it is not unreasonable-- and is in fact common-- for residents in assisted living homes to entrust management of their finances to another, and personal liability is typically imposed on that other person to provide incentive to pay the facility. The court likewise found that the contract did not violate public policy, noting that there is a strong public policy in Connecticut in favor of freedom of contract and that a contract does not violate public policy simply because it was made unwisely.
While the court decided in favor of the provider, this case serves as a reminder that health care contracts should be drafted explicitly and leave no room for doubt as to who is responsible for payment. Highlighting such language through bold type, capitalization or other means, and including language making it clear that a party is contracting voluntarily and has had the opportunity to review the agreement with an attorney, are especially helpful in consumer-directed contracts of this type.
Ambulance Company Failed to Prove that It Did Not Exercise Medical Judgment
The estate of a woman who died from injuries suffered when employees of an ambulance company dropped her bariatric stretcher during a non-emergency transportation run claimed that the accident arose from medical malpractice and not ordinary negligence. In Brownstein v. EFK of Connecticut, Inc., the Superior Court (J.D. New Haven) denied the ambulance company’s motion for summary judgment, finding that the company did not meet its burden of proving that it provided only transportation, and not medical, services to the woman. The court found that there was a question as to whether the company, in transporting the woman, was required to exercise medical judgment and assess the woman’s medical condition before transport.
The characterization of the cause of injury was particularly significant in this case because the estate obtained an extension of the statute of limitations under the medical malpractice statute, and the action would be time-barred if ordinary negligence was determined to be the appropriate cause of action.
Medicare Advantage Insurer Entitled to Bring Private Action under Medicare Act
In a case of first impression, the U.S. District Court for the District of Connecticut (Hall, J.) held last year that the federal Medicare Act (specifically, 42 U.S.C. §1395y(b)(3)(A)) allows a Medicare Advantage Organization (MAO) operating a Medicare Advantage health insurance plan to bring a private cause of action to recover double damages for the medical expenses it paid in connection with a personal injury claim. In Aetna Life Insurance Company v. Guerrera, an individual suffered injuries after falling at a supermarket and incurred over $9,000 in medical expenses which were paid for by an MAO plan operated by Aetna Life Insurance Company. The victim subsequently sued the supermarket and settled her claim for $30,000. Beginning a year before the settlement was reached, Aetna made multiple attempts to notify the victim, her attorneys and the supermarket that it had a lien on the victim’s medical expenses related to her injury. Despite these notifications, the supermarket paid the full settlement amount to the victim and her attorneys.
The court recognized Aetna’s right under the Medicare Act to bring suit for double damages against a primary plan which fails to provide for “primary payment (or appropriate reimbursement).” As for who may be sued, the court found that the clear language of the statute permitted Aetna to bring suit only against the “primary plan” and found that the supermarket was the sole “primary plan” in this case (not the victim or her attorneys), as the supermarket was the party responsible for payment of the settlement. The court also found that the supermarket was on notice of Aetna’s lien on the victim’s medical expenses prior to entering into the settlement, and therefore it did not satisfy its obligations under the private cause of action statute to make “appropriate” reimbursement.
Health care facilities are often defendants in slip and fall and similar cases and can be sued for negligence in the same way the supermarket was sued in this case. In light of this decision, potential tortfeasors in Connecticut must be sure to respond properly to MAP liens in order to avoid the imposition of double damages under the Medicare Act.
Chiropractor Found Not to Have Engaged in Balance Billing
Balance billing is the practice whereby a health care provider bills a patient for the difference between the provider's usual charge for a service and the amount allowed under the patient’s health insurance policy. Balance billing by physicians and other individual practitioners is expressly prohibited in Connecticut (C.G.S. §20-7f(b)).
The Appellate Court of Connecticut recently affirmed a lower court’s decision that held that a chiropractor’s authorization form that required the patient to agree to pay charges not paid by his health insurer did not violate the balance billing statute. In Vaccaro v. D’Angelo, the patient sought treatment from a chiropractor for injuries suffered in an automobile accident. Among the forms the chiropractor required the patient to sign was an authorization form which stated that the patient understood that he was “directly responsible to the [chiropractor] for all professional services submitted and agree[d] to fully satisfy the bill for professional services rendered…. [and that he agreed] to pay those charges which are not paid by [his] health insurance.” The patient argued that these provisions negated the balance billing statute, making the authorization form illegal and unenforceable. The court disagreed, finding another “completely plausible” interpretation of the form that would not violate the statute, namely, that the chiropractor could bill the patient directly for any charges not paid by the patient’s insurance, including copays, deductibles and charges for services rendered after the patient’s benefits were exhausted or that were not covered by the patient’s health insurance.
In a separate claim, the patient argued that the chiropractor was not entitled to any reimbursement from his $75,000 automobile accident settlement fund for chiropractic services rendered in excess of the insurance plan’s limit. According to the patient, the chiropractor failed to provide him with an acknowledgement form that the patient claimed was required to be provided under the terms of the chiropractor’s provider agreement with the insurer. The Appellate Court affirmed the lower court’s decision that the chiropractor properly notified the patient of his insurance limitations in accordance with the provider agreement, noting that the provider agreement required the chiropractor to provide an acknowledgement form to patients when he rendered non-covered services, not when he provided services that exceeded the plan’s limits.
This case offers a measure of reassurance to health care providers that the prohibition on balance billing is not violated simply because the provider requests his or her patients to acknowledge that they are responsible for charges not covered by insurance. However, providers should review their patient notices regarding non-covered services and plan limits on a regular basis to ensure that they comply with their provider agreements and clearly set forth the patient’s responsibilities.
Failed Abortion is Actionable as Prenatal Tort, Cannot be Dismissed as a Claim for Wrongful Life
A claim for “wrongful life” is a claim brought by an infant alleging that the negligent failure of a medical professional to diagnose a congenital or genetic disease is the proximate cause of birth and that, but for the defendant’s negligence, the infant would not exist. Courts often reject wrongful life as a viable claim on public policy grounds finding, among other things, that the law is not equipped to calculate damages by comparing being born to having no life at all. Last year, the Connecticut Superior Court (J.D. New Britain) faced the question of whether a medical malpractice claim should be dismissed on the basis that the claim was actually a claim for wrongful life. In Vasquez v. Roy, a woman consulted with her physician to have her pregnancy terminated. She was administered the drug methotrexate, which is not approved by the FDA for pregnancy termination, and which is toxic to a fetus. The physician failed to inform the patient that when the drug fails to induce an abortion the fetus is at high risk for being born with severe abnormalities. In fact, the attempted abortion was unsuccessful and the fetus was born prematurely and with serious congenital anomalies. The woman, on behalf of herself and the infant, brought a medical malpractice claim against the physician and his practice. The defendants sought summary judgment on the ground that the claim was really a claim for wrongful life and since no Connecticut appellate court has ever recognized a claim for wrongful life, the action should be dismissed. The court disagreed, finding that the infant’s claim was not that the physician failed to diagnose the abnormalities but that the physician caused the developmental damages by failing to conform to professional standards when determining the method of abortion and by negligently exposing him to methotrexate in utero.
The court also disagreed with the defendants’ argument that any duty they had to the fetus in this case was extinguished because such a duty would have interfered with their duty to the mother to perform the abortion. According to the court, Connecticut recognizes that a physician rendering prenatal care has a physician-patient relationship not only with the mother but also with the fetus and this duty includes the obligation to conform to professional standards with regard to the choice of an appropriate abortion technique. Finally, the court rejected the defendants’ argument that recognizing a duty to the fetus would violate Roe v. Wade, finding that Roe protects a woman’s right to terminate a pregnancy free from undue interference by the State—it does not change a physician’s duty to conform to professional standards when exercising medical discretion in choosing an abortion method.
This case serves as an important reminder that physicians have a duty both to an expectant mother and to the fetus, even in cases where an abortion is sought and that Roe v. Wade and its progeny do not change this duty.