Supreme Court Review Special Section
Houston Endowment Supports Institute
Houston Endowment Inc., Texas' largest private philanthropic foundation, has contributed $350,000 to the University of Houston Law Center. The generous contribution was made to support the Health Law & Policy Institute and to support the Law Center's public interest scholarships and fellowships.
The purpose of the funds designated for the Institute is to expand the research office space of the Institute. The additional space will greatly enhance the Institute's ability to conduct Health Law & Policy research and to take on new research activities funded by other outside sources.
Ann Hamilton, Grant Officer of the Houston Endowment, said that the Houston Endowment is pleased to support the Institute "because of the quality of the research done by the Institute and the Institute's demonstrated ability to work with policymakers in Austin and Washington to develop policies for the betterment of the health of our society."
Mimi ’75 and Bill Walker ’71 Establish Endowed Library Fund
Mimi ’75 and Bill Walker ’71 have generously established an endowed library fund in memory of Mimi’s parents, Mary Jane Meenahan Trueheart and John Howard Trueheart. The Trueheart Endowed Library Fund, incorporating a significant matching gift from the Exxon Educational Trust, will benefit the library of the Law Center’s Health Law & Policy Institute. With the matching funds from the Exxon Educational Trust, the fund will total to $50,000 in 2003.
Anderlik Joins Research Faculty
Mary
R. Anderlik has joined the Health Law & Policy Institute's full-time
research faculty. She will be concentrating on the Institute's grant to
study access to health care for persons with disabilities with The Institute
for Rehabilitation and Research. Also, she will be working on various legislative
research projects.
Dr. Anderlik received an A.B., magna cum laude, in Russian Language and Literature from Bryn Mawr College in 1985, a J.D. from Yale Law School in 1989, and a Ph.D. in Religious Studies from Rice University in 1997. Among other honors, she received the John W. Gardner Award for best dissertation in the Humanities and Social Sciences in 1997.
She worked as a post-doctoral fellow in clinical ethics at The University of Texas M.D. Anderson Cancer Center in Houston, Texas prior to joining the Institute. She practiced law in Chicago for three years after graduating from law school.
Sheridan to Teach Law and Psychology
Kathleen
Sheridan, a Professor of Psychology at the University of Houston, has been
appointed a Research Professor at the Health Law & Policy Institute.
Dr. Sheridan will teach Law and Psychology in the spring of 1999, work
with Bill Winslade on the Health Law Masters Seminar, and work on various
health research projects.
She received her A.B., summa cum laude, from Fontbonne College in 1961, her M.A. in Experimental Psychology from Fordham University in 1963, her Ph.D. in Clinical Psychology from Fordham University in 1968, and her J.D. from Northwestern University School of Law in 1983.
Dr. Sheridan has authored numerous books and articles, including "Ethics and Changing Mental Health Care: Concerns and Recommendations for Practice," which appeared in Volume 4, Number 2 of the Journal of Clinical Psychology in Medical Settings. She was in private practice for twenty-two years in individual, group, and marital psychotherapy and psychological consulting.
According to Institute Director Mark A. Rothstein, "With her vast background in law and social science, Kathy Sheridan is a wonderful addition to our program. We already are exploring several collaborative research projects."
H.L.O. Plans Active Fall
The University of Houston Health Law Organization (H.L.O.) will kick off the year with an introductory meeting and a party. The first meeting of the H.L.O. will be an opportunity for students to learn more about the organization's activities. The party will be held at the home of Professors Laura and Mark Rothstein on September 11, 1998. H.L.O. plans to host monthly speakers on a variety of health-related issues. Also, an Alumni Breakfast will be held in November.
H.L.O. has ongoing fundraisers, including the sale of University of Houston Law Center license plate holders and Health Law & Policy Institute t-shirts. Contact Cathy Rupf at (713) 743-2101 for more information.
Health Law Master’s Program Welcomes New Students
Ten students have entered the Health Law Master’s program in 1998.
From the Web…
Genetic Information and Long-Term Care Insurance first appeared on June 29, 1998 in Health Law Perspectives on the Health Law & Policy Institute's web site. Health Law Perspectives features articles analyzing recent developments in health law. Health Law Perspectives has been receiving over 1,500 hits monthly.
Focus on an Adjunct Professor:
David C. Pate
David C. Pate, M.D., J.D., an Adjunct Professor at the University of Houston Law Center, teaches Regulation of Health Care Professionals. Currently, Dr. Pate serves as Senior Vice President of St. Luke's Episcopal Health System.
Dr.
Pate is Chairman of the St. Luke's Physician-Hospital Organization Board
and a member of the Greater Houston Health Network Board of Directors,
as well as its Vice Chairman and Vice President. He has been Medical Director
of St. Luke's Health Network since 1993 and President of St. Luke's Internal
Medicine Specialists, P.A. since 1996. He has also served as Vice President,
Primary Care Development for St. Luke's Hospital and Executive Director,
MSO for St. Luke's Physician Practice Management. Dr. Pate was in private
practice from 1986 to 1995.
Dr. Pate received his B.A. in Biochemistry from Rice University in 1979, and he received his M.D. from the Baylor College of Medicine in 1982. He completed his internship, residency, and chief residency at St. Luke's Episcopal Hospital, Baylor Affiliated Hospitals, and St. Luke's Episcopal Hospital, respectively. He was certified by the American Board of Internal Medicine in September 1986. He graduated from the University of Houston Law Center with a J.D., cum laude, in 1996. Dr. Pate also attended the Healthcare Executive Fellowship Program in Management at the J.L. Kellogg Graduate School of Management at Northwestern University in 1997.
Publications. . .
Laura F. Rothstein
Laura F. Rothstein
Ellen W. Grabois (LL.M. '96) wrote an article entitled "The Liability of Psychotherapists for Breach of Confidentiality," which was published in the Journal of Law and Health, Volume 12 (1998). She has recently been appointed Assistant Professor in the Department of Physical Medicine and Rehabilitation at the Baylor College of Medicine.
Frederick R. Parker, Jr. (LL.M. '98) will be teaching corporate tax, business aspects of health law, and bioethics (in the undergraduate and graduate schools at Louisiana State University in Shreveport, Louisiana. He will also be teaching bioethics at LSU Medical School. He, Charles J. Paine, M.D. and Dorothy G. Hubbard, Ph.D., R.N. have formed the Center for Bioethics and Health Law, which will serve as an educational resource in Louisiana for various matters related to bioethics and health law.
Marcus L. Stevenson (LL.M. '98) has formed the law firm of Stevenson, Henderson & Garrett, where he is practicing food and drug law and health law.
Kevin Williams (J.D. '95), who works for the California Pan-Ethnic Health Network, was recently appointed to the Healthy Family Program Quality Improvement Work Group for the California Managed Risk Medical Insurance Board. He also serves on the Family Health Outcomes Project Work Group for the University of California-San Francisco Department of Family and Community Medicine and the Medi-Cal Community Assistance Project Work Group.
Alumni, please let us know what you are doing so we may include your information in future issues. You can e-mail us at CRupf@uh.edu.
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of Health Law News
Supreme Court
Review Special Section
THIS SPECIAL SECTION REVIEWS THE HEALTH LAW CASES DECIDED BY THE UNITED STATES SUPREME COURT IN 1997-98.
Kawaauhau v. Geiger
Marsha Cohen
Professor of Law
Hastings College of the
Law
Medical malpractice judgments attributable to negligent or reckless conduct, the Supreme Court held unanimously in Kawaauhau v. Geiger, 118 S.Ct. 974 (1998), may be discharged in bankruptcy. This decision, affirming the Eighth Circuit’s opinion, is contrary to earlier holdings of the Sixth and Tenth Circuits.
Although the facts in the case might be considered egregious, there was no allegation that the physician intentionally sought to harm his patient. Dr. Paul Geiger treated petitioner Margaret Kawaauhau, hospitalized with a foot injury, with oral rather than more-effective intravenous antibiotics to minimize her treatment costs, as he believed she preferred. He also cancelled specialist treatment ordered in his absence by another physician, and then discontinued antibiotics he felt were no longer needed. The patient’s condition worsened, and ultimately required amputation of her right leg below the knee.
Dr. Geiger, who carried no malpractice insurance, sought to discharge Kawaauhau’s $355,000 judgment in bankruptcy. Section 523(a)(6) of the Bankruptcy Code exempts from discharge any debt "for willful and malicious injury by the debtor to another entity or to the property of another entity." Relying on the words of section 523(a)(6) and other statutory clues, and notwithstanding significant controversy in bankruptcy cases, the Court held that a typical malpractice judgment is not a debt for "willful and malicious injury."
The Court’s opinion relied on doctrine we learned in first-year torts (recall Garratt v. Dailey, 279 P.2d 1091, 1093-1094 (Wash. 1955)): intended acts that cause injury are distinguishable from acts done with intent to cause injury or with knowledge to a substantial certainty that injury will occur. The former category, the Court worried, encompasses virtually all accidental harms: after all, the speeding driver surely intended to step on the gas. An intentional tortfeasor must intend "the consequences of an act," not just the act itself (Restatement (Second) of Torts §.8A, comment a, p. 15 (1964)). Dr. Geiger surely intended the medical decisions he made, but there is no claim that he intended to cause his patient harm or was substantially certain it would occur. Exceptions to discharge in bankruptcy are to be narrowly construed (Gleason v. Thaw, 236 U.S. 558, 562 (1915)); petitioner’s interpretation would deny dischargeability of a broad swath of tort indebtedness. Congress has specifically precluded discharge of tort debts for death or personal injury arising from driving while intoxicated (section 523(a)(9)); that provision, the Court pointed out, would have been unnecessary if petitioner’s interpretation of section 523(a)(6) held sway. Perhaps a similar exception should be created for physicians’ malpractice judgments – but that, the Court concluded, is a policy question to be addressed to Congress.
Negligence, recklessness, and intentionally tortious behavior are as a factual matter points along a continuum, but legally there is a bright line, with dramatically different consequences, drawn between "mere recklessness" and the realm of intentional torts. For example, tort law allows some defenses to reckless defendants that are denied to intentional tortfeasors; in insurance and workers' compensation law, the difference between a finding of recklessness and of intentional fault is often crucial to recovery. So it is not surprising that the drafters of bankruptcy law chose to deny its protections to those found to be "willful and malicious" wrongdoers.
Even appalling professional malfeasance will rarely satisfy the requirements of an intentional tort and thus be deemed "willful and malicious." Should the most reckless of physicians (and, for that matter, attorneys) be allowed to discharge malpractice judgment debts via bankruptcy and return, debt-free, to their financially productive practices? The most reckless of drivers may discharge their tort debts in bankruptcy -- unless they were driving drunk. The former seems more unjust than the latter, both because of the significant future earnings prospects we attribute to doctors and lawyers (although some reckless drivers are rich) and because of our expectation that professionals carry malpractice insurance. Congress could both protect patients like Kawaauhau who suffer harm from professional malpractice and allow professionals like Geiger to avoid suffering forever the financial consequences of their errors by amending the bankruptcy law to prevent the discharge of malpractice judgments up to a certain dollar amount. A professional who carries malpractice insurance in the amount not subject to discharge could discharge the remainder of the debt.
Prison Inmates Covered by ADA
T. Howard Stone
Assistant Professor and
Research Director,
Program on Legal & Ethical
Issues in Correctional Health
Institute for the Medical
Humanities, University of Texas Medical Branch
In
a decision whose significance may be difficult to overstate, the U.S. Supreme
Court ruled in the case of Pennsylvania Department of Corrections v.
Yeskey, 118 S.Ct. 1952 (1998), that the Americans With Disabilities
Act of 1990 ("ADA") applies to state prison inmates. Not since the Court’s
1976 landmark decision in Estelle v. Gamble, 429 U.S. 97 (1976)—which
established a prison inmate’s right to medical care under the Eighth Amendment—has
the health care of prisoners marked such an advance.
In Yeskey, a prisoner claimed that the Pennsylvania Department of Corrections and state prison officials violated the prisoner's rights under the ADA when the prisoner was refused placement in Motivational Boot Camp—completion of which might have resulted in the prisoner's release after six months—and was instead imprisoned for a term of 18-to-36 months. The decision to refuse the prisoner placement in boot camp was based upon the prisoner’s history of hypertension. The prisoner claimed that this decision violated Title II of the ADA, which provides in part that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity . . . ."
The Supreme Court made several key findings. The first was to reject state prison officials' argument that ADA language did not provide an "unmistakably clear" expression of intent that could be interpreted to include prisons as public entities subject to the ADA. The Court stated that, unlike other statutes, the ADA does not provide any exception to the term "public entity" that could be construed to include prisons, and so therefore prisons "fall squarely within the statutory definition" of the term "public entity." Second, the Court rejected state prison officials' claim that prisons do not provide prisoners with benefits of services or other programs of a public entity subject to the ADA. The Court stated that many services benefiting prisoners are provided by state prisons, and that the ADA provides no textual distinction between these prison-based services and other public entity services that would warrant excluding prisons from ADA regulation. The Court also rejected prison officials' argument that prisoners were not protected by the ADA since prisoners do not voluntarily seek the benefits of prison-based programs, finding that ADA language does not require voluntary participation in order for protection to attach to program participants. Furthermore, the Court said that even if ADA language did imply voluntariness, the very program in which the prisoner in the instant case sought placement required the prisoner's application. Finally, the Court found irrelevant the absence of any mention of prisons or prisoners in the ADA's statement of findings or purpose to support prison officials' claims, given unambiguous statutory text interpreted to include prisons as a covered public entity.
The Court's decision in Yeskey is significant in that it resolves divergent and often strident circuit court opinions on the ADA's application to prisons and prisoners. The unanimity of the Court's decision brokers no ambivalence or dissension from this position. Most important, however, the Court's decision sends a clear, unmistakable message to prison officials that persons with disabilities, whether or not incarcerated, may not be discriminated against solely on the basis of their disability, including being denied participation in the very programs intended to provide a meaningful and accelerated transition back into the "free world" community for those who otherwise are qualified. The Court's decision is a giant step towards redressing long entrenched and deleterious prison policies that relegate persons with disabilities to second-class status within an already difficult and often abysmal environment.
Geissal v. Moore Medical Corp.
Karen Jordan
Associate Professor of Law
University of Louisville
The
Court in Geissal v. Moore Medical Corp., 118 S.Ct. 1869 (1998),
held that a qualified beneficiary's preexisting coverage through another
group health plan does not terminate eligibility for the continuation of
group health coverage required by COBRA (amendments to the Employee Retirement
Income Security Act of 1974, enacted as part of the Consolidated Omnibus
Budget Reconciliation Act of 1986). Moore Medical Corporation (MMC) terminated
Geissal's employment on July 16, 1993, and informed him of his rights under
COBRA. Geissal elected to continue coverage and made the necessary premium
payments for six months. On January 27, 1994, however, MMC informed Geissal
that it had been mistaken and that Geissal was not entitled to COBRA benefits
because, on the date of his election, he was already covered by the group
health plan offered through his spouse's employer.
The controversy in Geissal arose out of a provision that permits COBRA obligations to cease on "the date on which the qualified beneficiary first becomes, after the date of the election . . . covered under any other group health plan (as an employee or otherwise), which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary . . . ." 29 U.S.C. § 1162(2)(D)(i). Because Geissal was covered through his spouse's plan before he elected COBRA coverage, he did not "first become" covered "after the date of election." Nonetheless, MMC argued that the provision was satisfied because "the first moment of coverage on the day following the election is the moment of first being covered after the date of election." Geissal, 118 S.Ct. at 1874.
Several Circuit Courts of Appeal had adopted MMC's reading of the provision as a matter of policy. Denying COBRA benefits to a beneficiary with preexisting coverage is premised on the view that Congress was concerned with the growing number of Americans without health insurance and that COBRA was therefore intended to benefit those who would be left without coverage. But, to avoid harsh results, courts held that COBRA obligations would not cease if it could be shown that a denial of benefits left a beneficiary with a "significant gap" in coverage. The circuits adopting this position view the imposition of COBRA obligations when the beneficiary has preexisting coverage as an unnecessary drain on the employer's plan.
Other circuits had rejected this interpretation--primarily because it is at odds with the plain meaning of § 1162(2)(D)(i), but also to promote the view that Congress intended COBRA to allow beneficiaries the opportunity to protect their prior choice of having dual coverage. The Supreme Court agreed with this viewBbut not as a matter of policy. Rather, the opinion reflects the Court's commitment to a textual approach to statutory interpretation. The Court rejected MMC's argument largely because it "[robs] the modifier 'first' of any consequence, thereby equating 'first becomes . . . covered' with 'remains covered.'" Id. The Court could find nothing in the text suggesting the Congress would disapprove of allowing a beneficiary with preexisting coverage to benefit from COBRA continuation coverage. The Court noted, "[s]ince the beneficiary has to pay for whatever COBRA coverage he obtains, there is no reason to assume that he will make an election for coverage he does not need . . . ." Id. at 1875.
Additionally, the Court declined to read the legislative history as affecting the scope of the plain meaning of the provision. The Court explained that, if Congress' concern with the growing number of uninsured were a legitimate guide to interpretation, there would be no COBRA coverage for any beneficiary who had any health insurance on the date of election or who obtained any thereafter. Id. at 1875. Yet, the proviso to § 1162(2)(D)(i) specifically precludes termination of COBRA benefits when coverage obtained after the election includes a pre-existing condition exclusion applicable to a beneficiary's medical condition. The Court also noted that the significant gap doctrine was inconsistent with MMC's legislative history argument.
However, the Court then took the opportunity to debunk the significant gap doctrine, thereby closing the door to any future use of the doctrine in the COBRA context. The Court characterized the doctrine as a judicially developed, "nontextual compromise," noting that § 1162(2)(D)(i)'s proviso "makes no mention of what to do when a person's other coverage is generally inadequate or inferior; . . . . The proviso applies not when there is a 'gap' or 'difference' between the respective coverages of the two policies, but when the later-acquired group coverage excludes or limits coverage specific to the beneficiary's pre-existing condition." Id. at 1876. Yet, going beyond textualism, the Court also stated that, by asking courts to make determinations as to the adequacy of medical insurance, the doctrine inappropriately injected courts into the social policy arena.
Bragdon: The Unanswered Questions
Laura F. Rothstein
Law Foundation Professor
of Law
University of Houston Law
Center
Does
the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-12213
(1997), require insurance companies or employers to make Viagra available?
Does the ADA require employers to allow employees with fertility problems
to have a leave of absence to get treatment? Does the ADA mandate that
employers and/or insurance companies must make fertility treatments available
on a nondiscriminatory basis? Will it matter if the individual seeking
the treatment is a 62 year-old grandmother or a couple who have just given
birth to septuplets?
These are some of the questions that the Supreme Court only begins to answer in its decision in Bragdon v. Abbott, 118 S.Ct. 1206 (1998). The case involved a woman who was HIV positive, but asymptomatic, who sought dental treatment. When the dentist, who had inquired about her HIV status, discovered that she had a cavity, he advised her that he would only fill the cavity at a hospital, which would mean that she would have to pay the cost of using the hospital facilities. Ms. Abbott claimed discrimination under Title III of the ADA, which applies to private providers of public accommodations, and prohibits them from discriminating against otherwise qualified individuals with disabilities on the basis of their disabilities. 42 U.S.C. § 12182 (1997). There was no dispute about whether Title III applied to the dentist's office. There was disagreement, however, about two other major issues. First, Dr. Bragdon claimed that Ms. Abbott was not disabled within the definition of the ADA. Second, he based his refusal on his view that her condition posed a direct threat to him, a defense that is recognized as justifying different conduct in certain instances.
The ADA protects individuals who have an impairment that substantially limits them in one or more major life activities, those who have a record of such an impairment, or those who are regarded as having such an impairment. 42 U.S.C. § 12102(2) (1997). Many advocates and courts had interpreted this to mean that either individuals with HIV are substantially limited in the major life activity of reproduction or that because of the stigmatizing effect of being HIV positive, that they were regarded having a disability.
It had been generally thought that the Supreme Court's resolution of a similar issue in School Board of Nassau County v. Arline, 480 U.S. 273 (1987), where it held that a schoolteacher with tuberculosis was covered under the Rehabilitation Act, 29 U.S.C. § 794 (1997), would control in this case because the ADA is intended to be interpreted consistently with the Rehabilitation Act. A few lower courts, since Arline, held that a person who was HIV positive but asymptomatic was not covered under the ADA. The Bragdon case presented the possibility that the Court might decide that anyone who is HIV positive is disabled under the ADA.
Many advocates, medical professionals, and courts had also accepted the fact, based on current medical knowledge, that HIV alone does not pose a direct threat to health care providers, because if they use universal precautions, the risk is so minute as to not justify the kind of discriminatory treatment, that occurred in Bragdon.
The Court left open a number of issues, but it clearly held that reproduction is a major life activity. This is significant because neither the ADA nor the regulations list it as one. The Court then determined that Ms. Abbott had demonstrated that for her, her HIV status was a substantial limitation in her decision to procreate, because of concerns about risk to her partner in conception and risk to the child in childbirth. By focusing on the facts in this case, the Court did not say that every individual who is HIV positive is covered. The Court also declined to address whether the "regarded as" portion of the definition would apply. It is probable that this issue will be raised in future litigation. The direct threat issue also remains unresolved. The ADA allows for discriminatory treatment in certain instances where the individual poses a significant risk of communicating an infectious disease to others. 42 U.S.C. § 12182(b)(3). The risk determination is to be based on medical information or objective evidence. The Court established that the objective reasonableness of the health care provider should be based not on individual judgements, but on available medical evidence.
The Court concluded that the record did not clearly indicate whether the objective medical evidence existed at the time this particular refusal occurred. While the 1993 CDC Guidelines on this issue would clearly indicate today that such a refusal to treat was unreasonable, it was not clear from the record that those Guidelines or other scientific evidence conclusively established that any risk was insignificant and that such evidence was available at the time this patient was refused treatment in 1994. The issue of risk assessment was remanded for further resolution.
So what issues have been clearly decided and what have been left for another day? And how does this decision affect questions like those raised indirectly as a result of the Bragdon holdings? Probably two significant questions were clearly resolved. First, reproduction is a major life activity. Second, the determination of risk may not be based on individual judgments, but must be based on medical and objective evidence of appropriate experts.
The determination that reproduction is a major life activity is important and will surely be raised in claims involving individuals who are seeking nondiscriminatory health insurance coverage for fertility treatments or for Viagra. Other future cases are likely concern whether employers must provide individuals who have problems with reproduction reasonable accommodations in the workplace, such as time off for fertility treatments or even nondiscrimination in hiring and terminating employment. Future courts will probably be faced with questions of whether this means that all individuals with reproductive problems are covered. Is the 45-year old woman who chose to defer child bearing entitled to claim a substantial impairment? What about the 80-year old man who wants his insurance company to pay for Viagra, so that he and his young wife might have children? Or will the courts or regulatory agencies decide that only those in "normal" child bearing years are protected? It may well be that this is an issue more appropriately resolved by policymakers than courts.
Supreme Court Upholds Medicare Reaudit Rule for Graduate Medical Education Costs
Eleanor D. Kinney
Professor of Law and Co-Director
The Center for Law and Health
Indiana University School
of Law, Indianapolis
In
Regions
Hospital v. Shalala, 118 S.Ct. 909 (1998), the Supreme Court affirmed
the 1996 Eighth Circuit decision allowing the Department of Health and
Human Services (DHHS) to reaudit Medicare payments to teaching hospitals
for graduate medical education (GME) costs. The Court held that the challenged
reaudit regulation, 42 C.F.R. § 413.86(e), was not impermissibly retroactive
and was a reasonable interpretation of the Medicare statute.
In 1986, Congress changed the formula for calculating reimbursable GME costs, e.g., expenses for interns and residents, from retroactive cost reimbursement. Under the new formula, the Secretary determined the per resident amount for 1984 by dividing total 1984 "reasonable" GME costs by the number of the hospital's full-time residents in 1984. The 1984 per resident amount, adjusted for inflation and other factors, is then used to calculate future GME payments.
In 1989, the Secretary promulgated the reaudit rule because of concerns about erroneous payment of questionable GME costs and to prevent perpetuation of past mistakes. The reaudit rule permitted fiscal intermediaries, which manage Medicare payments to hospitals, to verify each hospital's base year GME costs and exclude nonallowable or misclassified costs. The Secretary clarified that the rule did not permit recoupment of excess reimbursement for years in which the reimbursement had become final but sought only to prevent future overpayments and recoup overpayments in open years.
In 1986, Regions Hospital received its Notice of Amount of Program Reimbursement for cost year 1984 which reflected total 1984 GME costs of $9.89 million. In 1991, the fiscal intermediary reaudited its 1984 GME costs and allowed $5.91 million. The per-resident costs dropped about $11,000 to $49,805.
The hospital appealed. The Eighth Circuit, affirming the district court and following Tulane Educational Fund v. Shalala, 987 F.2d 790 (8th Cir. 1993), cert denied 510 U.S. 1064 (1994), ruled for the Secretary, 91 F.3d 57 (8th Cir. 1996). However, the Sixth Circuit had ruled in Toledo Hospital v. Shalala, 104 F.3d 791 (6th Cir. 1997), that the Secretary's interpretation of the statute was unreasonable and the reaudit rule invalid. To resolve this conflict, the Supreme Court granted the Regions Hospital petition.
Justice Ginsburg, for the majority, affirmed the Eighth Circuit's decision. First, relying on Landgraf v. USI Film Products, 511 U.S. 244 (1994), the Court held that the reaudit rule was not impermissibly retroactive as the rule calls for the application of cost reimbursement principles in effect at the time and "a correct application of those principles, not the application of any new reimbursement principles, is the rule's objective." 118 S.Ct. at 915. The Court relied on Bowen v. Georgetown University Hospital, 488 U.S. 204 (1988), which had invalidated a rule applied to cost periods prior to its promulgation.
Second, the Court concluded that the Secretary's interpretation of 42 U.S.C. § 1395ww(h)(2)(A) permitted the Secretary to reaudit a hospital's 1984 GME costs outside the Secretary's three-year cost year reopening window to correct past errors and recoup overpayments, 42 C.F.R §495.1885(a) (1985). The Court concluded that § 1395ww(h)(2)(A) was silent on the matter of time. Thus, the Secretary's interpretation was reasonable and entitled to deferernce under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Justice Ginsburg concluded that the Secreatary's rule sought to "effectuate the Legislature's overriding purposes in the Medicare scheme: reasonable (not excessive or unwarranted) cost reimbursement." 118 S.Ct. at 916.
Justice Scalia, joined by Justices O'Conner and Thomas, dissented. They argued that, in light of the procedures in place at the time for determining reasonable 1984 GME costs when §1395ww was enacted, § 1395ww could not reasonably be interpreted as authorizing the Secretary to determine a hospital's 1984 GME costs again. The majority, the dissent argued, was simply helping out the Secretary who had had plenty of time after the statute's enactment to correct erronoeous GME base year determinations within the three year window but "neglected to do so." 118 S.Ct. at 921.
The opinion reflects the Court's continued support of DHHS as it tries to control costs in the Medicare program. The practical effect of the opinion is not expected to be great as it affects an estimated 80 or 90 of the 1500 teaching hospitals in the country, BNA Health Care Daily, Feb. 25, 1998.
General Electric Co. v. Joiner
John G. Culhane
Professor of Law
Director, International
Programs and Graduate Programs
Widener University School
of Law
In
Daubert
v. Merrell Dow Pharmaceuticals, Inc., the United States Supreme Court
held that scientific evidence is admissible if supported by sound methodology.
In discarding the previous standard of general acceptability within the
scientific community, the Court stated that the trial judge discharges
his or her responsibility by acting as a gate-keeper, and admitting such
evidence as is supported by sound methodological principles, while excluding
that built upon speculation and conjecture. This permissive rule honors
one of the central tenets of the Federal Rules of Evidence by favoring
admissibility of all potentially relevant evidence.
This emphasis on the sluice-gate role of the judge creates outcome-determinative responsibility, so that the issue of the proper standard of review for admissibility decisions moves to the fore. The Supreme Court has resolved this issue in General Electric Company v. Joiner, 118 S.Ct. 512 (1997), deciding that an abuse of discretion standard is appropriate for such determinations. While this holding is unexceptionable, the Court's further pronouncements raise enigmatic possibilities for the future.
It's best to begin with a discussion of the legal standard that the Court set forth. The trial judge had excluded the plaintiff's expert evidence seeking to show that his lung cancer had been caused by the defendant manufacturer's toxins -- PCBs, furans, and dioxins -- and granted summary judgment to defendant-petitioners. The judge's ruling was based on two findings: first, there was no genuine issue as to whether plaintiff-respondent had been exposed to furans and dioxins; second, the expert testimony had failed to connect PCBs and the type of cancer contracted by the plaintiff. As to the latter, the trial court thought that the plaintiff's experts' opinions to the contrary were based on "subjective belief or unsupported speculation."
The Court of Appeals for the Eleventh Circuit reversed, holding that the challenged testimony as to causation should have been admitted. The Court's conclusion was based on its view that "a particularly stringent standard of review" should be applied when a trial judge seeks to exclude expert testimony, given the strong evidentiary preference for admissibility. Next, the Court held that the District Judge had erred in excluding the testimony, because it had gone beyond its proper role of determining legal reliability, and had second-guessed the conclusions drawn by the experts.
The Supreme Court, per Justice Rehnquist, unanimously decided that the traditional abuse of discretion standard was appropriate when reviewing evidentiary determinations of trial judges. As a matter of consistency, this holding is correct. Further, the open-ended alternative proposed by the Eleventh Circuit could have had the effect of shifting primary responsibility for evidentiary rulings from trial to appeal, a result that would have disrespected the role properly assigned to each tribunal. Even Justice Stevens, who dissented in part, agreed as to the appropriate standard. In addition, the Court specifically stated that it was not issuing a blanket ruling as to any particular type of evidence. Thus, the Court noted it was not deciding generally on "whether animal studies can ever be a proper foundation for an expert's opinion."
The decision became potentially problematic, though, in Part III, where the Court went further, and held that the District Court had, in fact, not abused its discretion. In so doing, the Court considered each of the animal and epidemiological studies on which plaintiff's experts sought to rely. The animal studies were "seemingly far removed" for the conditions of plaintiff's illness, so these had been properly excluded. Similarly, the epidemiological studies did not support the conclusions the experts sought to extract from them, either because no statistically significant association had been found, or because the authors of the study themselves did not reach the conclusion the experts did.
Under these circumstances, the Court could reasonably conclude that, at least, the trial judge did not abuse her discretion in refusing to admit the evidence. But the Court then added a paragraph that muddies the methodology/conclusion distinction constructed by Daubert, and raises the possibility of return to the days of unwarranted exclusions of evidence. The Court noted that "conclusions and methodology are not entirely distinct from each other . . . Nothing . . . requires a district court to admit opinion evidence which is connected to existing data only by the ipse dixit of the expert. The Court may conclude that there is simply too great an analytical gap between the data and opinion proffered."
In his partial dissent, Justice Stevens understandably focused on this troubling language. It is certainly true that conclusions can be no more reliable than the methodology on which they are based, but the Court did not seem to require a trial judge to find flaws in methodology by which the conclusion was drawn. The right question to ask, it would seem, is whether valid scientific methodology permits the drawing of the kind of conclusions reached by experts. For example, that the authors of a given report did not reach the same conclusion as the plaintiff's expert does not mean that the expert's conclusion is unsupportable. Perhaps the authors' interpretation of their own results is incomplete, or open to question in other ways. By eliding the distinction between methodology and conclusion, the Court occludes the promise of Daubert, and permits the return of very sort of judicial meddling in the role of the jury that one might have hoped had been banished.
Bryan v. United States: Clarification of the Anti-Kickback Statute's Scienter Requirements
Sharon L. Davies
Assistant Professor of Law
The Ohio State University
College of Law
The
Supreme Court's recent decision in Bryan v. United States, 118 S.Ct.
1939 (1998) may have failed to attract the attention of many members of
the health care industry. It is, after all, a case involving a violation
of the federal firearms provisions--a provision that is not foremost in
the minds of those involved in the day-to-day delivery of health care services.
Nevertheless, the decision is worthy of a closer look, as it is likely
to have a significant impact on the ongoing debate over the scienter requirements
of the Medicare and Medicaid anti-kickback provisions, 42 U.S.C. §
1320a-7b(b)(1) and (2) (West Supp. 1998).
The anti-kickback provisions prohibit any person or entity from "knowingly and willfully" soliciting, accepting, offering or paying any remuneration in return for the referral of any good or service reimbursable under one of the federal health care programs. Violations of the provisions can subject an offender to imprisonment, criminal fines, and worse, exclusion from participation in any of the programs. Given the high stakes, providers are quite anxious to keep their business arrangements on the right side of the anti-kickback rules.
This may be easier said than done. The industry has long complained that the anti-kickback provisions (and their attending safe harbor regulations) are impossible to understand. Providers are fearful that they could be accused of violating the provisions on the basis of conduct that they did not know was unlawful. To prevent this, some defense counsel have argued that the statute's requirement that kickbacks be "willful," requires the government to prove that a provider knew he or she was violating the anti-kickback law in order to convict. At least one court (seeHanlester Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995)) has agreed, others (see, e.g., United States v. Jain, 93 F.3d 436 (8th Cir. 1996)) have not.
The Supreme Court's recent decision in Bryan provides some guidance to those concerned about the debate over the anti-kickback provisions. In Bryan, the Court grappled with the same basic question (albeit in a different statutory context): what is the meaning of the word "willfully" when it appears in a criminal statute? In answer, the Court held that "generally" when the word "willfully" appears in a criminal statute, the government must prove that the accused wrongdoer engaged in the conduct with a "bad purpose." The Court went on to explain that this means there must be proof that the accused "acted with an evil-meaning mind" which the majority opinion defined as acting "with knowledge that the conduct was unlawful." The Court's answer may provide the industry with some hope of evading prosecution or other allegations of wrongdoing under the anti-kickback provisions. At a minimum, it would seem, prosecutors will have to show that an accused provider knew his or her conduct was unlawful to support a conviction under the provisions.
What is unclear under the Court's ruling is whether the government will have to prove that the provider knew the business arrangement violated the specific anti-kickback provisions (as opposed to knowing that his or her conduct was wrongful generally). This question will depend on whether the anti-kickback rules are found in the future to be "highly technical" or especially complex. If so, Bryan suggests that prosecutors will have to offer evidence that providers knew that their conduct offended the specific anti-kickback rules to support a conviction.
In short, the decision delivers good news to the industry. The full extent of that good news will doubtlessly be the subject of litigation in the months to come.