Health Law Monitor

Supreme Court of Appeals of West Virginia Upholds MPLA’s Limitation on Noneconomic Damages

On June 22, 2011, the Supreme Court of Appeals of West Virginia rejected a constitutional challenge to the West Virginia Medical Professional Liability Act's ("MPLA") limit on "noneconomic" damages, or what is commonly known as damages for "pain and suffering".

MPLA’s Limitation on Noneconomic Damages

 On March 8, 2011, the Supreme Court of Appeals of West Virginia heard oral argument on a constitutional challenge to the West Virginia Medical Professional Liability Act's ("MPLA") limit on "noneconomic" damages, or what is commonly known as damages for "pain and suffering".  In MacDonald v. City Hospital, Inc. and Sayeed Ahmed., M.D., plaintiffs have challenged the constitutionality of West Virginia Code § 55-7B-8 of the MPLA, which generally limits noneconomic damage awards in medical professional liability actions to $250,000.  Under West Virginia Code § 55-7B-8, the limit or “cap” increases to $500,000 in three circumstances:  wrongful death; “permanent and substantial physical deformity, loss of use of a limb or loss of a bodily organ system”; or “permanent physical or mental functional injury that permanently prevents the injured person from being able to independently care for himself or herself and perform life sustaining activities.”

Plaintiff James MacDonald developed rhabdomyolisis while under the care of Dr. Ahmed at City Hospital. Mr. MacDonald claimed the defendants failed to recognize, diagnose and treat the symptoms of his rhabdomyolisis, which resulted in permanent injury.  Mr. MacDonald's wife Debbie MacDonald also asserted a loss of consortium claim against the defendants. At trial, the jury found in favor of the plaintiffs, assessing liability as 70% to Dr. Ahmed and 30% to City Hospital, and awarded $1 million to Mr. MacDonald for noneconomic loss, as reflected in the jury verdict form below.  The jury also awarded $500,000 in noneconomic damages to Mrs. MacDonald for her loss of consortium, resulting in a total award of $1.5 million in noneconomic damages.  

 

On post-trial motions, the circuit court reduced the jury’s verdict of $1.5 million in noneconomic damages to $500,000, pursuant to West Virginia Code § 55-7B-8 of the MPLA, rejecting the plaintiffs’ claim that the "cap" is unconstitutional.  Plaintiffs then appealed to the Supreme Court of Appeals of West Virginia, claiming that the "cap" violates numerous provisions of the West Virginia Constitution, including the equal protection, jury trial right, separation of powers, access to the courts, and certain remedy provisions.

Thomas J. Hurney, Jr., a member of Jackson Kelly, PLLC, represented City Hospital in the appeal and during oral argument before the Supreme Court of Appeals, which was held at the West Virginia University College of Law.  A decision is expected from the Court in the coming months. 

INDIVIDUAL HEALTH INSURANCE MANDATE UNDER PPACA RULED UNCONSTITUTIONAL

    A federal judge in Virginia has ruled that the individual health insurance mandate contained in the nation’s new health reform legislation is unconstitutional.

Virginia Judge Holds Individual
Health Insurance Mandate Unconstitutional

    The nation’s new health care reform legislation consisting of the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively "PPACA") took a legal hit this week. On Monday, a Virginia federal judge held that the individual health insurance mandate was unconstitutional.

    In Commonwealth of Virginia v. Sebelius, United States District Judge Henry Hudson held that the individual mandate exceeds Congress’ power to regulate economic activity under the Commerce Clause of the United States Constitution. Hudson, a Bush appointee, stated in his opinion that “[n]either the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.” The Judge limited his decision to the individual mandate and declined to strike down the entire PPACA legislation or even issue an injunction against enforcement of the individual insurance mandate.

    The legal battle over the individual mandate is far from over; two other federal judges, one in Michigan and one in Virginia, have upheld its constitutionality, and twelve other challenges have been dismissed on procedural grounds. Later this week, a federal judge in Florida will hear arguments in a challenge brought by 20 state attorneys general and a number of governors. The Florida case is the broadest challenge thus far as it challenges other provisions of PPACA in addition to the individual mandate. We will keep you apprised of further developments as this issue moves forward. A United States Supreme Court review of the issue is very likely in the coming months.

CMS Announces Cut in Physician Reimbursement Rates and Changes to Supervision Requirements for Outpatient Services

CMS issued the 2011 Medicare Physician Fee Schedule final rule, which cuts physician reimbursement by 24.9% between November 2010 and January 2011. Additionally, CMS recently released its 2011 Outpatient Prospective Payment System final rule setting forth several changes to physician supervision requirements for hospital outpatient services to take effect on January 1, 2011.

Health Reform Whitepaper: Strengthening the Fraud and Abuse Laws

The fourth and final installment of our health reform series focuses on how the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (referred to together herein as “PPACA”) strengthens the enforcement of health care fraud and abuse laws. Just last month, Department of Health and Human Resources Inspector General Daniel R. Levinson testified on Capitol Hill that PPACA “…will significantly enhance our effectiveness in fighting waste, fraud, and abuse in the Medicare and Medicaid programs.” Levinson added that the perpetrators of health care fraud and abuse range from “street criminals” to “Fortune 500 companies.”

Health Reform Update - Provider Impact

Health Reform Update

 The third installment of our health reform series focuses on the impact upon health care providers of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (referred to together herein as “PPACA”).

Health Reform Whitepaper: Employer Impact of PPACA

Health Reform Whitepaper: Employer Impact of PPACA 

The second installment of our Health Reform series focuses upon the impact of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (referred to together herein as “PPACA”) upon employers and their group health plans. PPACA places a number of requirements upon both existing and new group health plans (including both insured and self-insured plans) that will take effect for plan years beginning on or after September 23, 2010. Hence, for calendar year plans, many of the changes must be in place by January 1, 2011. PPACA also establishes certain employer health insurance play-or-pay mandates commencing in 2014.  

Health Care Reform Whitepaper: New IRS Mandates for Charitable Hospitals

 

    Under prior law, charitable hospitals established tax-exemption under Internal Revenue Code (“IRC”) § 501(c)(3) by providing a community benefit. Most hospitals established a community benefit by providing health care regardless of a patient’s ability to pay (including payment through Medicare or Medicaid), by providing charitable (unreimbursed) care to the community, by maintaining an emergency room, by not restricting use of its facilities to a particular group of physicians, and/or by utilizing excess funds to improve the quality of patient care, expand facilities, and advance medical education and research.

Illinois Supreme Court Holds that Property Owned by Catholic § 501(c)(3) Health System not Exempt from Illinois Property Tax

On March 18, 2010, the Supreme Court of the State of Illinois decided a property tax case that could have nationwide implications for charitable healthcare organizations. A copy of the decision is available at http://www.state.il.us/court/Opinions/SupremeCourt/2010/March/107328.pdf. The Court ruled that forty-three parcels of real estate owned by Provena Hospitals were not exempt from Illinois ad valorem property tax under either the charitable or religious use exemptions of the Illinois code. This plurality decision of the Illinois Supreme Court is disturbing because the Court seems to have gone out of its way to define charitable use, in the context of the taxation of property owned by a non-profit IRC § 501(c)(3) hospital, so narrowly that many hospitals operating in today’s healthcare environment may not be able to maintain their exemption if the reasoning in this case is adopted by other jurisdictions, including West Virginia.

Important Changes to Medicare Secondary Payer Electronic Reporting Rules

The Centers for Medicare and Medicare Services ("CMS") announced that it is extending the date for electronic reporting under the Medicare Secondary Payer rules for all Non-Group Health Plans from April 1, 2010 to January 1, 2011.