Making the case for doctors: AMNews interviews James J. Jordan
■ In today's litigious society, the AMA/State Medical Societies Litigation Center takes on legal battles in defense of the medical profession.
By Amy Lynn Sorrel — Posted July 10, 2006
In an era when physicians appear to be getting as familiar with the courtroom as they are with the exam room, the American Medical Association/State Medical Societies Litigation Center is advocating for doctors by getting involved in the legal system on their behalf.
Believed to be the only litigation center of its kind exclusively for doctors, it was established 11 years ago to provide physicians with legal assistance, usually in the form of a friend-of-the-court brief or a financial contribution. All 50 state medical societies belong, and since its inception in 1995, the Litigation Center has taken on nearly 150 cases that address issues that have the potential to make a difference in the practice of medicine. Peer review, medical liability reform and physician antitrust issues are just a few examples of the types of cases the center has weighed in on.
AMNews reporter Amy Lynn Sorrel recently talked to Litigation Center Chair James J. Jordan, also executive director of the Alaska State Medical Assn., about some of the battles percolating in the courts.
AMNews: Are doctors encountering more litigation these days? Why or why not?
Jordan: The answer is yes. And why is that? There are a lot of confounding and complicating factors in the life of physicians these days. For example, the American Academy of Actuaries did a study back in the late '90s related to medical liability reform. The [data] indicated that in the 1950s, physicians had a one in seven chance of being sued as a result of a medical injury in their career. By the 1990s, that one in seven chance was still there, but on a yearly basis.
Also, the relationships between physicians and managed care organizations and hospitals are becoming more and more complex. And the complexity, I hate to say it, often leads to litigation.
AMNews: What types of cases does the Litigation Center get involved in?
Jordan: There are three general categories. The first is what I would refer to as the "David and Goliath" type cases where an individual physician or a small group of doctors are, in effect, overmatched. For example, [we get involved] in disputes involving large managed care organizations, large hospital systems or governmental agencies. The second type is a case usually brought by a state medical society where the scope of the case may be more directed towards a specific practice or a geographic area. However, a lot of times those cases still have a national reach. The third type of case is one at the [state or federal] appellate or Supreme Court level, in which the decision will likely be precedent-setting from the standpoint of medicine.
There are a whole host of other criteria, the main question being what the precedential value might be for the case and whether or not the legal issues presented will help clarify matters of interest to physicians. Frankly, we also have to look at the likelihood of success. As you probably well know, the cost of litigation can be phenomenal.
AMNews: What are some of the more prominent legal issues doctors are facing these days?
Jordan: Cases involving the issue you hear termed as "economic credentialing," which goes to the relationship between physicians and hospitals, are going on across the country in a little different shape or a little different version.
Having said that, the chance of physicians being sued as a result of a medical injury has increased to a substantial degree, obviously medical liability reform and litigation surrounding that is very important and continues to happen with [legal] challenges to the various liability statutes that exist.
In Alaska last year when we enacted a very good medical liability reform bill, what I reminded our membership of is that once you are through the statehouse, the next step is the courthouse. And that's based on experience. Alaska passed some major liability reform that was industry-wide back in 1997. [It led to] a challenge that took five years to wind its way through the lower court and ultimately to the [state] Supreme Court. Even then, it didn't settle all of the issues, particularly the constitutionality of caps on noneconomic damages.
AMNews: Can you point to some successful or precedential cases you have seen and what kinds of changes could result for doctors?
Jordan: The OKAAP v. Fogarty case [in Oklahoma] was a very important case for physicians and patients throughout the country. The real issue there is that federal law requires that various state Medicaid programs in their design must be such that they provide access to care that is equal to that of the general public. In times of budgetary constraints, Medicaid programs are looked at at the state level for ways to economize. And I'll give you an example: A couple of years ago when the OKAAP case was still in process, our [Alaska] Legislature was looking at doing an across-the-board 10% cut in the physician payment area. We indicated, "Well, if you are going to do that in the Medicaid program, perhaps you had better look at this litigation in Oklahoma, because in that litigation, part of the main argument was that it is incumbent on the state making those kinds of decisions to make sure that they do not impact access to health care." And lo and behold, our Medicaid program did not get an across-the-board cut. Now, there's comparable cases winding their way [through other federal courthouses] that will further define what states need to do when dealing with the physician payment schedule and how it impacts access to care.
Another case that I find could have some interesting ramifications is the patent case, Lab Corp. v. Metabolite. What this whole case hinges around is whether or not a scientific law can be patented, whether the correlation between the results of a lab test and the diagnosis are patentable. I would think the ramifications with that could have tremendous financial impacts because if that's considered a patentable process, then what about the results of CAT scans, MRI's, CBCs -- go down the list. Of course, then that could add to the cost of the practice of medicine and the domino effect into overall access to care.
AMNews: Are there other cases in the pipeline that could lead to big changes in the practice of medicine?
Jordan: One is ERISA preemption. Up until quite recently, any type of state law that applied to a health plan essentially was summarily preempted by ERISA [Employee Retirement Income Security Act of 1974]. But starting some five or six years ago, there have been some court cases that have come about that have shown some chinks in the armor, and this has to do, for example, with the applicability of prompt-payment laws and a whole bunch of other situations involving physicians' relationships with managed care entities. The most recent case that I think is going to provide further legal edification is Kentucky Assn. of Health Plans v. Miller.
The interesting thing here is that [ERISA] establishes some new criteria for what constitutes the business of health insurance, but those haven't really been tested. What some legal analysts have indicated is that it could possibly be construed that HMOs or health insurers who administer self-insured plans might be subject to certain state health insurance laws, and that is going to have some major impact. It can have to do with what I term as "no resources, no mission" -- prompt-payment laws, and also laws having to do with mandated benefits.
A second area is the whole arena of antitrust. Part of it is that the relationships between physicians and hospitals are so different than other industries. The complexity can certainly deal with issues like economic credentialing. Another aspect, too, is the situations that are created when you have the consolidation of the health industry that has taken place in this country. Usually when you are looking at antitrust, you are looking at monopolies and oligopolies. The flip side is when you have concentrated buyers of services, termed monopsony or oligopsony. Those issues are there, and that's a huge relationship in the practice of medicine, because it's the managed care entities who are directly paying for the care or are the vessel to do it.
AMNews:Lastly, what legal basics should doctors know to help them avoid the prospect of litigation?
Jordan: It's pretty simple. Document what you do. It's the old adage in the defense of such claims that if it's not written down, it didn't happen.