BEWARE: CARE V. DOLLARS IN THE NEW HEALTHCARE WORLD

Accountable Care Organizations are the new buzz word in healthcare. ACOs are a centerpiece of the Healthcare Reform law. ACOs are intended to reduce Medicare costs by paying bonuses to doctors for “better” care. Essentially, doctors, hospitals and other providers form a partnership – the ACO. Medicare sets a target cost for all patients to be seen by the ACO partners. The ACO partners receive a bonus if the actual costs paid by Medicare are less than the target. The flip side is that the ACO partners must pay Medicare the amount over the target. How many are going to sign up for that program?

The concept of paying doctors bonuses based upon savings is not new. Sometimes called “gainsharing,” the principle is to incentivize doctors to practice medicine with cost always on their mind. In essence, the physician has a monetary reason to order a CT scan rather than the more expensive MRI. In an ACO, the ACO partners are expected to hold each other partners accountable for practicing conservative (i.e., cheap) medicine.

What happens when conservative medicine results in the failure to diagnose a condition? A clue, however, is offered by the Tennessee Court of Appeals in Poteet v. National Healthcare of Cleveland, Inc. formerly Cleveland Community Hospital. In that case, the court of appeals stated:

1. The existence of the bonus incentive plan whereby the physician received a bonus based upon reducing the number of MRIs ordered did not, in and of itself, make the hospital liable.

2. If the physician had been found guilty of malpractice because he failed to order an MRI, then the existence of the bonus incentive plan would have been significant fact. In that case, a jury could reasonably infer that the bonus incentive plan “increased the risk of misdiagnosis.”

In Poteet, the patient possessed a known history of alcohol abuse. In fact, he was in the local county jail for driving under the influence when he began suffering from a seizure. The jail personnel transported the patient to the emergency room. A CT scan was performed which showed no blood clots. The patient was then admitted to the hospital for treatment. At the hospital, the treating physician was a hospitalist – a physician employed by the hospital.

During the course of the hospital treatment, the physician did not order an MRI or a diagnostic catheter angiogram even though the hospital had the capability to perform both tests. The patient received treatment based upon the results of the CT scan.

Almost three days later, the patient’s condition significantly worsened. At that time, an MRI was ordered. That MRI showed that the patient had suffered a basilar artery stroke due to the presence of a clot. The patient was transferred to another hospital for treatment. Although the patient did not die, the stroke caused him to be paralyzed from the nose down.

In his lawsuit, the patient asserted that if an MRI had been performed timely, the effects of the stroke could have been minimized. The patient further asserted that the hospitalist did not order an MRI because his contract with the hospital provided for a bonus based upon reducing the number of MRIs ordered. In other words, if he ordered less MRIs, the hospital paid the doctor more money.

As noted, the court of appeals held that the mere existence of the bonus incentive plan could not make the hospital independently liable. As the jury found that the physician was not guilty of malpractice, the hospital could not be guilty of malpractice. But, the court also stated that if the physician had been found guilty of malpractice because he failed to order an MRI, then the existence of the bonus incentive plan would have been significant fact for consideration by the jury. In that case, a jury could reasonably infer that the bonus incentive plan “increased the risk of misdiagnosis.” As a corollary, the hospital could have been found, upon comparative fault principles, guilty of negligence by virtue of its contribution to that failure.

For physicians looking at whether to join an ACO, this decision is significant. Depending upon the type of organizational structure used, the ACO, its Board of Directors, its officers and even the individual participants could be liable under this “increased risk of misdiagnosis” theory. Further, this decision emphasizes the risks inherent in rewarding physicians and other healthcare providers for underutilization of diagnostic tests.

For more information on this decision, see Bennie Joe Poteet, II, v. National Healthcare of Cleveland, Inc., No. E2009-01978-COA-R3-CV (Apr. 19, 2011).

LAWSUITS AGAINST SURVEYORS

This is the reason we have a court of appeals. The statute of limitations for claims against a surveyor is four years under Tenn. Code Annotated section 28-3-114. In this case, the defendant surveyor argued that the general statute for claims for damage to real property -- Tenn. Code Ann. section 28-3-105 -- should be applied. That statute provides a three year statute of limitations for injury to property. The trial court agreed and granted the surveyor's motion to dismiss. When I read this case, I asked myself how the statute for injury to real property applies when the sole allegation is that the surveyor "prepared" the survey. A survey, in and of itself, does not change the boundary line. Arguably, it creates a "cloud" on the title, but is a cloud an injury? That is another story. In any event, the court of appeals made short work of this case holding that the specific statute for surveyors superseded the more general statute for damage to real property. So, when this question comes up in Final Jeopardy, you now know the answer. The statute of limitations for lawsuits against surveyors is four (4) years. See Wanamaker v. Thaxton, et al.