Making Sure The Left Hand Knows What The Right Hand Is Doing Representing Health Care Providers In Medical Negligence Cases by: Troy J. Crotts, Esq.

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1 Making Sure The Left Hand Knows What The Right Hand Is Doing Representing Health Care Providers In Medical Negligence Cases by: Troy J. Crotts, Esq. Florida Continues as National Leader in Disciplinary Activity The joint efforts of the Florida Board of Medicine, its staff, and the division s Consumer, Investigative and Association Services Units resulted in Florida once again leading the nation in disciplinary activity among large states, according to the Federation of State Medical Boards (FSMB) Annual Report. (1) Imposed fines, costs, citations increased by more than $1 million over the previous fiscal year. (2) The division saw an increase in license revocations and voluntary surrenders, along with a near doubling of license suspensions.(3) These Highlights/Accomplishments listed in the Annual Report from the Florida Department of Health, Division of Quality Assurance, illustrate the importance of today s health care lawyer s knowledge of both the civil and administrative aspects of his client s untoward medical incidents. Traditionally, many lawyers that represented health care professionals in civil litigation were not the same lawyers that represented those same professionals before the licensing and disciplinary boards. In an era where civil litigation appeared to be the focus and disciplinary matters, if pursued, seemed somewhat of an afterthought, such a dichotomy was not problematic. However, in today s era where discipline and licensing proceedings are pursued with as equal vigor as is civil litigation, the uninformed or illprepared defense lawyer can find himself faced with many questions to which there are potentially very unsettling answers. These areas range from issues as to whether the result at a licensing hearing can be used in a subsequent civil action brought by the patient to whether claim related events in one state can have a negative impact on medical licenses held by the health care provider in another state. Many areas where it is important for the left hand to know

2 what the right hand is doing will be addressed in light of both the dangers to the health care client and to the lawyer representing that client. Furthermore, while Florida statutory and case law will be used to illustrate these points, it is likely that similar issues are present in most other states. In Florida, licensed health care providers are regulated by the Florida Department of Health s Division of Medical Quality Assurance through the many professional boards such as the Board of Medicine or Board of Nursing.(4) Their disciplinary authority and procedures are governed by both statutory and administrative code provisions. Physician disciplinary proceedings are governed by administrative law procedures and involve nonjury determinations by administrative law judges.(5) That system is separate and apart from medical negligence claims which are maintained in Florida s civil court system which involves trial by jury. Proceedings in these venues are independent from one another and can proceed simultaneously, sequentially or not at all. However, there are many situations and mechanisms which can connect the two areas and will be discussed below. Scenario 1: A physician is investigated by the Board of Medicine, an administrative complaint is filed, a non-jury trial is held before an administrative law judge, who rules that the physician fell below the standard of care. The physician is subsequently sued for medical negligence by the patient in civil court and as part of that proceeding, the patient s attorney attempts to use the doctrine of collateral estoppel (relying on the adverse decision in the disciplinary proceeding) to prevent the physician from re-litigating the negligence issue again in this separate civil proceeding. While some states may permit the use of estoppel in this fashion, the Florida Supreme Court has not. Specifically, in Stogniew v. McQueen, the Florida Supreme Court, faced with this exact issue, ruled in favor of a therapist and prevented Plaintiff from relying on the adverse disciplinary finding to prevent the therapist from defending the negligence issue in the separate civil damage trial.(6) 2

3 While the Stogniew decision protects Florida providers in this situation, other states may not and therefore, when representing a health care provider in either a civil damages action or a related licensing action, the attorney needs to be aware of the potential ramifications that a decision to take a case to verdict or judgment in one venue, may have on the potential defensibility in the other proceeding. Scenario 2: A physician is investigated by a licensing board and as part of the initial investigation, where the physician is unrepresented, gives a statement to the agency investigator. The statement is made a part of the confidential agency file, which is not subject to public disclosure pending a determination as to whether formal discipline will be pursued. In a subsequently filed civil lawsuit for damages brought by the patient, an attorney represents the physician, who is unaware of the previous statements made by her client. Portions of the earlier statements are in some ways, inconsistent with discovery responses given by the physician in defense of the separate civil litigation, which inconsistencies are initially unknown to the defense counsel who prepared the physician s discovery responses without knowledge of the previous statements by his client. During the pendency of the civil action, the licensing board in the separate administrative action pursues formal discipline against the physician, the previous statements become public record, the patient s civil attorney obtains the statements to use as impeachment in the civil action and the defensibility of the civil action is compromised. In Florida, this scenario is real. Florida Statutes provide for an initial investigation of a patient complaint, which can involve obtaining a statement from the subject of the investigation (health care provider).(7) The contents of the investigation and statement obtained in the administrative matter are confidential, unless probable cause to pursue discipline is found, which then removes the confidential status of the agency file.(8) Furthermore, the patient and/or his attorney are required to be kept current by the board of medicine as to the status of the disciplinary matter(9) and therefore, they know immediately when the investigative materials become available. 3

4 Scenario 3: A patient is injured, minimally, by medical negligence. The patient hires an attorney who presents a claim for money damages to the physician. The physician reports the claim to his liability insurance carrier, defense counsel is assigned and negotiations are pursued. The claim settles for $105,000.00, but if pursued more aggressively by defense counsel for the physician, could have settled for $95, (Alternate scenario: Settles for $55, but could have settled for $50, ) The Board of Medicine pursues an investigation, in the absence of a patient initiated complaint to them, based solely on the reported settlements. Under Florida law, liability insurance carriers are required to report professional liability settlements to the Department of Insurance(10), which in turn reports such settlements to the Department of Health(11). Additionally, physicians are required to self report in a state maintained Practitioner Profile, settlements in excess of $100, (12) Combined with these reporting requirements, are statutory provisions which permit the Department of Health, even in the absence of a direct patient complaint to the Department, to initiate a disciplinary proceeding when a settlement in excess of $100, is reported via the Practitioner Profile and/or when an insurance carrier reports a settlement in excess of $50, (13) The dilemma for the defense counsel in this situation is to explain to his physician client why a case was settled, unnecessarily, for an amount that permitted disciplinary investigation to be instigated, when a minimally lesser settlement amount would not have triggered the investigative procedures. If the scenario resulted from defense counsel s lack of knowledge of the monetary reporting requirements for settlements, a dispute between the provider and her counsel may develop. Scenario 4: A physician goes bare without liability insurance and when sued, personally hires defense counsel to defend the claim. The civil claim is successfully defended and 4

5 the physician and defense counsel part ways at the conclusion of the case. The physician subsequently receives notice of a disciplinary investigation against her by the Department of Health for failure to report to the Department of Insurance that the claim was concluded. Florida law requires professional liability insurance carriers to report to the Department of Insurance, resolution of claims that are settled, result in a judgment or are otherwise finally disposed of without payment of money.(14) A similar requirement is imposed directly upon the health care provider when a civil matter is resolved individually and outside of the insurance context.(15) Failure to make such a report, can subject the physician to a disciplinary proceeding for the failure to report itself.(16) In such a situation, a question will likely arise from the physician/former client, as to why defense counsel failed to notify her of such reporting requirements upon resolution of the underlying civil litigation. Scenario 5: A nurse is involved in a medical incident involving the death of an elderly patient resulting from a medication error. The facts are such that criminal charges while unlikely are a consideration depending on the local prosecutorial climate. Nonetheless, the civil litigation is settled and ultimately, a disciplinary investigation is pursued by the Board of Nursing. Defense counsel assists the nurse in defense of the administrative proceeding, including the giving of a statement as to what occurred. A fine is imposed against the nurse by the licensing board and the matter is concluded. Subsequently, criminal charges are brought against the nurse for abuse of the elderly and the nurse s statements from the disciplinary proceedings are used against the nurse in the criminal proceeding, much to the displeasure of the former client and current criminal defense attorney, both of whom question why the civil counsel did not anticipate and protect against this risk. Unfortunately, in a busy health care practice and in the midst of the vigorous defense of a medical negligence and/or disciplinary claim, defense counsel can fail to recognize potential criminal implications of his client s conduct. Because the context is 5

6 not criminal, consideration is not always given as to the effect that positions taken in the civil or administrative arena can have on the client s criminal rights should a criminal matter be subsequently pursued. This situation partly results from the implicit feeling that if a situation merited criminal attention, it would have surfaced long before civil litigation or administrative disciplinary proceedings occurred. Such an assumption in Florida is not well taken where the disciplinary boards have a statutory obligation to report any criminal violation of any statute relating to the practice of a profession... to the proper prosecuting authority for prompt prosecution. (17) This is especially significant when one considers that one of the highlights listed in the Department of Health s Annual Report was The Prosecution Services Unit improved coordination with state and federal law enforcement. (18) Defense counsel must be cognizant of this overlap in jurisdictions. Scenario 6: A practicing Florida physician, who maintains and holds an all but inactive license in a second state, is disciplined by the Florida Board of Medicine arising from the treatment of a Florida patient. Defense counsel advises the physician as to compliance with the Florida disciplinary obligations and closes his file. Six months later, the physician calls with a report that he is now being investigated by the state where he has not practiced since residency for both the underlying event that led to his Florida discipline and for failure to timely report the Florida discipline Order to that other state. He questions why his original Florida counsel did not inform him of the potential consequences of settling the Florida matter relative to other states and why he was not told that he was supposed to report the Florida discipline to the other state. Truth be told, many lawyers may not think outside the current proceeding, yet failure to do, can result in what could be described as Domino Discipline. This is where one act of malpractice results in multiple separate proceedings and sanctions, in multiple jurisdictions. The mechanism for this to occur exists under the Florida Statutes, which state that disciplinary action in Florida can be taken against a Florida license for a 6

7 violation of the standard of care related solely to acts occurring in a different state and jurisdiction (i.e., one can be disciplined multiple times and in different states for the same violation)(19). Additionally, Florida physicians are required to report Board discipline on their state maintained Practitioner Profile, which report is required within 15 days of the Final Order.(20) In conclusion, the above scenarios, while not everyday occurrences, occur with enough frequency and carry such significant consequences for both the health care provider and attorney advising the provider, that they should be recognized and considered when directing one s clients. This is especially true in an era where Boards of Medicine are under increasing pressure, both financially and politically, to aggressively pursue all avenues of physician discipline. The day of practicing in a vacuum as a trial lawyer or administrative lawyer are long gone under Florida law and likely under most other states laws, which likely have counterparts to the Florida statutory provisions. Troy J. Crotts, Esq. Fowler, White, Boggs, Banker, P.A. (727) /St. Petersburg, FL 7

8 Footnotes: Fla. Dept. Health Div. Qual. Ass. Ann. Rep. at Fla. Dept. Health Div. Qual. Ass. Ann. Rep. at Fla. Dept. Health Div. Qual. Ass. Ann. Rep. at Florida Statute Florida Statute Stogniew v. McQueen, 656 So.2d 917, 920 (Fla. 1995) 7. Florida Statute (1) 8. Florida Statute (10) 9. Florida Statute (9) 10. Florida Statute (1) 11. Florida Statute (3) 12. Florida Statute and Florida Statute (1) 14. Florida Statute (1)(a) 15. Florida Statute (1)(b) 16. Florida Statute (4) 17. Florida Statute Fla. Dept. Health Div. Qual. Ass. Ann. Rep. at Florida Statute (1)(f) 20. Florida Statute

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