Let's say you are injured as a result of medical malpractice and your settle with the hospital for $50,000; a compromise that partially compensates you for your medical losses, your lost wages and the mental pain and anguish you went through. The medical bills that you incurred as a result of the hospital's mistake totaled $75,000 and were paid for by your health insurer. You dutifully paid for your health insurance coverage via premiums for years.
After you satisfactorily settle your claim, you get a letter from your insurer saying that you must turn the entire settlement over to it to "repay" the medical bills they paid on your behalf. You object, arguing that you never agreed to anything of the sort. The insurer responds by pointing to the fine print in the mammoth policy that you received from your employer outlining your benefits. Can the insurer really take your entire settlement from you?
Until recently, the answer might have been "yes." A contract is a contract and even though no one reads the fine print because you have no ability to renegotiate it anyway, courts have upheld such onerous provisions.
But enter Ms. Rose.....
In CGI Technologies & Solutions v. Rhonda Rose, a federal appeals court in Washington State found that the court must take into account whether such a result is equitable -- i.e., is this fair?
Ms. Rose was seriously injured when her car struck by a drunk driver. Even though her claim was worth a potential $1.75 million, she ultimately recovered $375,000. In other words, her recovery was 21.4% of her total damages. After her settlement, Ms. Rose's insurance company said that she was required to pay them back the entire cost of her medical bills, $32,000, based on the fine print contained in her health insurance policy. Ms. Rose -- not a person to mess with -- refused, arguing that since she only recovered .21 on the dollar, her insurer equally must receive only a percentage of its claim. She further argued that since she did not receive anywhere near full recovery for her medical bills, neither should her insurance company. Finally, she argued that since the insurance company was benefiting from her attorney's work, they should pay a portion of the attorneys' fee.
After a lower court rejected, Ms. Rose's argument, she appealed. The appeals court held that even though the insurance contract's language entitled the insurance company to recover 100% of its payments, the lower court should have taken into account the fairness of the situation. If it found this result to be "inequitable," the court could lower the amount the insurance company was entitled to claw back.
Moral of the story: do not accept an insurance company's explanation simply because they claim it is correct. And do not mess with Ms. Rose!
Friday, June 29, 2012
Friday, June 22, 2012
The Federal Court System...Simplified
I am often asked how our federal court system is set up. Most people (remembering their grammar school days) know that there is a state court system and a federal court system. With the prevalence of Supreme Court decisions in the news these days, people often wonder "how do cases get there?" The short answer is that cases get to the Supreme Court from the state system and from the federal system. But the focus of today's post is the federal system.
For purposes of the federal court system, Congress has separated the United States and its territories into 12 distinct areas, called circuits. The Circuits are identified below:
As you see, each Circuit is comprised of a number of States, with the exception being that the Washington, D.C. has its own Circuit (more on that in a minute). So, as an example, if a lawsuit is going to be filed in federal court in New Jersey, it will be filed in the Third Circuit.
Generally speaking, the first level court (the trial level) in the federal system is called a District Court. Thus, following our example, the federal case filed in New Jersey would be filed in the District Court for the District of New Jersey. Depending on how big the State or District is, it may be divided into geographic divisions. Thus, you may be filing in the "Northern District of [State]" or the "Eastern District of [State]." District courts are where juries sit to hear cases. District court cases are ordinarily heard by one judge.
So what court hears the appeal if you are unhappy with the result? Again, it is based on the Circuit you are in. There are 12 "Circuit Courts of Appeal" throughout the Nation. So if we lost our case in the District Court for New Jersey, and want to appeal it, we would appeal it to the "Third Circuit Court of Appeals." If we lost a case at the trial level in Utah, it would be appealed to the "Tenth Circuit Court of Appeals" (see the map above). Appeals to the Circuit Courts of Appeal are ordinarily heard by three judges, requiring at least two of them to agree on a decision.
For the vast majority of cases, the Circuit Courts of Appeal are the final word on the case. This is because the only court that is higher than the Circuit Courts of Appeal is the United States Supreme Court. And since U.S. Supreme Court only hears the appeals of cases it wants to hear (usually around 80 cases per year). Thus, from the thousands of federal cases that are appealed, the Circuit Courts of Appeal are usually the last stop.
Congress has created a special federal court in Washington D.C., called the "D.C. Circuit" or "Federal Circuit." The D.C. Circuit, like the other Circuits, is made up of a District Court (trial level) and a Court of Appeals (appeal level.). Why does a relatively small area as D.C. get its own Circuit? Because most of the important federal cases involving federal agency and other federal government decisions are required to be heard in the D.C. Circuit. For this reason, people will often claim that the D.C. Circuit Court of Appeals is the "second-highest" court in the land. While this is not technically true (it is legally on par with Courts of Appeal from the 12 Circuits), many people view it that way.
All federal judges (both at the trial level and the appeal level) are appointed by the President for life terms.
As you can see, our system places tremendous power in the 12 Circuit Courts of Appeal, which are the last stop for most cases. Thus, pundits and commentators will often comment on the purported "liberal bias" or "conservative bias" of a certain Circuit Court of Appeal. In addition, legal scholars keep close tabs on statistics, such as which Circuit Court of Appeals is most often reversed by the Supreme Court.
While I could not possibly cover all the nuances of the federal court system, my hope is that the next time you hear about a case pending in "federal court," you will have a basic understanding of the system.
For purposes of the federal court system, Congress has separated the United States and its territories into 12 distinct areas, called circuits. The Circuits are identified below:
As you see, each Circuit is comprised of a number of States, with the exception being that the Washington, D.C. has its own Circuit (more on that in a minute). So, as an example, if a lawsuit is going to be filed in federal court in New Jersey, it will be filed in the Third Circuit.
Generally speaking, the first level court (the trial level) in the federal system is called a District Court. Thus, following our example, the federal case filed in New Jersey would be filed in the District Court for the District of New Jersey. Depending on how big the State or District is, it may be divided into geographic divisions. Thus, you may be filing in the "Northern District of [State]" or the "Eastern District of [State]." District courts are where juries sit to hear cases. District court cases are ordinarily heard by one judge.
So what court hears the appeal if you are unhappy with the result? Again, it is based on the Circuit you are in. There are 12 "Circuit Courts of Appeal" throughout the Nation. So if we lost our case in the District Court for New Jersey, and want to appeal it, we would appeal it to the "Third Circuit Court of Appeals." If we lost a case at the trial level in Utah, it would be appealed to the "Tenth Circuit Court of Appeals" (see the map above). Appeals to the Circuit Courts of Appeal are ordinarily heard by three judges, requiring at least two of them to agree on a decision.
For the vast majority of cases, the Circuit Courts of Appeal are the final word on the case. This is because the only court that is higher than the Circuit Courts of Appeal is the United States Supreme Court. And since U.S. Supreme Court only hears the appeals of cases it wants to hear (usually around 80 cases per year). Thus, from the thousands of federal cases that are appealed, the Circuit Courts of Appeal are usually the last stop.
Congress has created a special federal court in Washington D.C., called the "D.C. Circuit" or "Federal Circuit." The D.C. Circuit, like the other Circuits, is made up of a District Court (trial level) and a Court of Appeals (appeal level.). Why does a relatively small area as D.C. get its own Circuit? Because most of the important federal cases involving federal agency and other federal government decisions are required to be heard in the D.C. Circuit. For this reason, people will often claim that the D.C. Circuit Court of Appeals is the "second-highest" court in the land. While this is not technically true (it is legally on par with Courts of Appeal from the 12 Circuits), many people view it that way.
All federal judges (both at the trial level and the appeal level) are appointed by the President for life terms.
As you can see, our system places tremendous power in the 12 Circuit Courts of Appeal, which are the last stop for most cases. Thus, pundits and commentators will often comment on the purported "liberal bias" or "conservative bias" of a certain Circuit Court of Appeal. In addition, legal scholars keep close tabs on statistics, such as which Circuit Court of Appeals is most often reversed by the Supreme Court.
While I could not possibly cover all the nuances of the federal court system, my hope is that the next time you hear about a case pending in "federal court," you will have a basic understanding of the system.
Friday, June 15, 2012
Contributory Negligence.....Do my own actions bar me from recovering?
Maryland, Virginia and the District of Columbia all continue to utilize an ancient concept called Contributory Negligence ("CN") when apportioning fault in injury cases. While CN has been roundly criticized, and abandoned by virtually every other State, it continues to hold sway in the D.C. area.
CN holds that if you contributed to your injuries, no matter how slightly, you cannot recover regardless of the other person's degree of fault. Its effect can often be harsh. For example, let's say your are driving 65 mph on an open highway where the speed limit is 60 mph. A driver coming from the other direction abruptly turns in front of you without looking and your vehicles collide, causing you to be severely injured. Is the negligent driver off the hook because your were speeding? With CN, that could be the result.
Most States have realized that this rule is too harsh because it does not recognize the relative fault of the parties. Thus, those States use a concept called Comparative Negligence in this situation. In Comparative Negligence states, the jury is asked to apportion fault. If the jury determines that the negligent driver was 90% responsible for the collision, and that you were 10% responsible (because of your speeding), you still recover for your injuries, with your damages reduced by 10%. As long as the negligent driver was at least 51% responsible for the collision, you recover, with your damages being offset by the amount of your negligence.
With CN, however, the jury is not asked to apportion fault. Rather, it is simply asked if you contributed to your own injuries in any way. Even if their answer is that you were 1% at fault, and the other driver is 99% at fault, you lose and recover nothing.
There are some exceptions to the CN rule. For example, there is something called the "Last Clear Chance" doctrine, which holds that even if you contributed to the outcome, if the other driver had the Last Clear Chance to avoid the collision, he is still at fault.
But even with exceptions such as this, you can see that CN can be a powerful defense weapon to defeat your claim.
CN holds that if you contributed to your injuries, no matter how slightly, you cannot recover regardless of the other person's degree of fault. Its effect can often be harsh. For example, let's say your are driving 65 mph on an open highway where the speed limit is 60 mph. A driver coming from the other direction abruptly turns in front of you without looking and your vehicles collide, causing you to be severely injured. Is the negligent driver off the hook because your were speeding? With CN, that could be the result.
Most States have realized that this rule is too harsh because it does not recognize the relative fault of the parties. Thus, those States use a concept called Comparative Negligence in this situation. In Comparative Negligence states, the jury is asked to apportion fault. If the jury determines that the negligent driver was 90% responsible for the collision, and that you were 10% responsible (because of your speeding), you still recover for your injuries, with your damages reduced by 10%. As long as the negligent driver was at least 51% responsible for the collision, you recover, with your damages being offset by the amount of your negligence.
With CN, however, the jury is not asked to apportion fault. Rather, it is simply asked if you contributed to your own injuries in any way. Even if their answer is that you were 1% at fault, and the other driver is 99% at fault, you lose and recover nothing.
There are some exceptions to the CN rule. For example, there is something called the "Last Clear Chance" doctrine, which holds that even if you contributed to the outcome, if the other driver had the Last Clear Chance to avoid the collision, he is still at fault.
But even with exceptions such as this, you can see that CN can be a powerful defense weapon to defeat your claim.
Wednesday, June 13, 2012
Should A Medical Malpractice Jury Be Entitled To Know Whether A Doctor Is Board Certified?...Schneider v. Little's Cautionary Tale
It happens all the time in medical-malpractice litigation. A defendant doctor who is not board certified seeks to bolster his/her credibility by providing testimony to the jury about his/her credentials, accomplishments and awards. At the same time, the doctor cries foul when the plaintiff patient wants the jury to know that the doctor is not board certified.
A new Maryland Court of Special Appeals decision appears to allow the doctor to hide his lack of board certification from the jury in most circumstances.
First, let's take a step back and talk about board certification. A doctor is not required to be board certified to practice medicine. Board certification means that the doctor has taken the extra step of demonstrating knowledge and proficiency in his/her medical field by passing an oral/written test. While board certification is not required, many hospitals and large medical institutions require board certification for doctors who practice there.
When a doctor who is not board certified is sued for malpractice, the patient naturally wants to introduce the lack of certification to show the doctor has not taken the extra steps. The doctor, on the other hand, naturally seeks to keep that from the jury since it is not a requirement to practice medicine. One could argue that both board certification and the doctor's credentials are not relevant to a particular case. Why? Because the most highly-qualified doctor can still make a mistake. Likewise, the most minimally-qualified doctor (lacking board certification) can provide excellent care. Since a medical-malpractice case is about whether the doctor erred in that particular instance, these factors are irrelevant to the jury's decision.
But that's not reality. Ordinary people (i.e. jurors) often consider people's credentials, or lack thereof, in determining whether they made a mistake. Thus, most courts have reached a judicial truce: they prevent the patient from introducing the doctor's lack of board certification as long as the doctor does not seek to bolster his credibility by overly extolling his accomplishments. While these makes neither side happy, it keeps the playing field level.
So what happens if the doctor does overly extol his virtues in front of the jury and breaks the truce -- in the legal word, we call it "opening the door." Shouldn't the patient be able to blunt that by introducing his lack of board certification to the jury? That is what the trial court allowed in Schneider v. Little, 2012 Md. LEXIS 58 (Md. Ct. App. June 1, 2012), a recent Maryland case that resulted in a $3.5 million verdict for the patient.
On appeal, the doctor argued (among many other things) that the trial court judge should not have allowed the patient to introduce the lack of board certification. He argued that while he addressed his credentials at trial, he did not push it so far as to "open the door." The Maryland Court of Special Appeals (its intermediate appeals court) agreed with the doctor and reversed the patient's victory.
The Court agreed that if the doctor had "opened the door," his lack of board certification might become admissible. It found, however, that the doctor had not opened the door. Rather, he had merely "provided typical background information." So what information did the doctor provide the jury?
1. He testified regarding his medical training and experience;
2. That he was on the Board of Directors of the health system;
3. That he had taught medical students at Johns Hopkins;
4. That he had authored publications; and
5. That he was a member of various professional organizations, including organizations to poor patients.
The appeals court found that this was "typical background information." One must ask, however: isn't board certification also "typical background information?" Indeed, if the situation were reversed and the doctor was board certified, would the appeals court have found it to be reversible error in favor of the patient if the doctor's board certification was disclosed? The answer is almost certainly no.
Would juries be better served by having all of the information? I leave that decision to the reader.
A new Maryland Court of Special Appeals decision appears to allow the doctor to hide his lack of board certification from the jury in most circumstances.
First, let's take a step back and talk about board certification. A doctor is not required to be board certified to practice medicine. Board certification means that the doctor has taken the extra step of demonstrating knowledge and proficiency in his/her medical field by passing an oral/written test. While board certification is not required, many hospitals and large medical institutions require board certification for doctors who practice there.
When a doctor who is not board certified is sued for malpractice, the patient naturally wants to introduce the lack of certification to show the doctor has not taken the extra steps. The doctor, on the other hand, naturally seeks to keep that from the jury since it is not a requirement to practice medicine. One could argue that both board certification and the doctor's credentials are not relevant to a particular case. Why? Because the most highly-qualified doctor can still make a mistake. Likewise, the most minimally-qualified doctor (lacking board certification) can provide excellent care. Since a medical-malpractice case is about whether the doctor erred in that particular instance, these factors are irrelevant to the jury's decision.
But that's not reality. Ordinary people (i.e. jurors) often consider people's credentials, or lack thereof, in determining whether they made a mistake. Thus, most courts have reached a judicial truce: they prevent the patient from introducing the doctor's lack of board certification as long as the doctor does not seek to bolster his credibility by overly extolling his accomplishments. While these makes neither side happy, it keeps the playing field level.
So what happens if the doctor does overly extol his virtues in front of the jury and breaks the truce -- in the legal word, we call it "opening the door." Shouldn't the patient be able to blunt that by introducing his lack of board certification to the jury? That is what the trial court allowed in Schneider v. Little, 2012 Md. LEXIS 58 (Md. Ct. App. June 1, 2012), a recent Maryland case that resulted in a $3.5 million verdict for the patient.
On appeal, the doctor argued (among many other things) that the trial court judge should not have allowed the patient to introduce the lack of board certification. He argued that while he addressed his credentials at trial, he did not push it so far as to "open the door." The Maryland Court of Special Appeals (its intermediate appeals court) agreed with the doctor and reversed the patient's victory.
The Court agreed that if the doctor had "opened the door," his lack of board certification might become admissible. It found, however, that the doctor had not opened the door. Rather, he had merely "provided typical background information." So what information did the doctor provide the jury?
1. He testified regarding his medical training and experience;
2. That he was on the Board of Directors of the health system;
3. That he had taught medical students at Johns Hopkins;
4. That he had authored publications; and
5. That he was a member of various professional organizations, including organizations to poor patients.
The appeals court found that this was "typical background information." One must ask, however: isn't board certification also "typical background information?" Indeed, if the situation were reversed and the doctor was board certified, would the appeals court have found it to be reversible error in favor of the patient if the doctor's board certification was disclosed? The answer is almost certainly no.
Would juries be better served by having all of the information? I leave that decision to the reader.
Tuesday, June 5, 2012
Does a CT Scan Cost $6,000.00 or $2,000?...Both!
You are a rational economic thinker. So you assume that the cost for a medical test, such as a CT Scan, is determined by its cost plus an amount for profit. As a result, your rational economic mind would assume that the price of a CT Scan would be relatively uniform nationwide. If a Ford Explorer costs almost the same in New Jersey as it does in California, shouldn't the same rationale apply to a CT Scan?
So how do you explain this? If you do not have insurance, a CT Scan costs $1,000.00. If you do have insurance, a CT Scan costs $6,700.00, of which you owe $2,300. You read that right: your cost would be cheaper if you did NOT have insurance. This practice of varied pricing has long existed. It also exposes a secret in the medical industry. A recent Los Angeles Times Article exposes this practice: See http://www.latimes.com/business/la-fi-medical-prices-20120527,0,4627745.story. As accountant Paul Keckley states in the article, "[i]t frustrates people because there's no correlation between what things cost and what is charged."
So what is going on? Basically, hospitals and insurance companies negotiate prices for tests such as CT Scans based on a host of factors, such as prestige of the hospital and size of the insurance plan. As a result, prices vary wildly despite the actual cost of the test. Moreover, the cash price for those without insurance, which is not negotiated, can be quite different... and may be lower! The article cites another example: the costs for a routine blood work-up were $782 (list price), $415 (with insurance), or $95 (cash).
This has led to at least one lawsuit in California against an insurance company claiming unfair business practices.
Have you notices similar pricing discrepancies? Feel free to comment on this blog and tell us about it.
So how do you explain this? If you do not have insurance, a CT Scan costs $1,000.00. If you do have insurance, a CT Scan costs $6,700.00, of which you owe $2,300. You read that right: your cost would be cheaper if you did NOT have insurance. This practice of varied pricing has long existed. It also exposes a secret in the medical industry. A recent Los Angeles Times Article exposes this practice: See http://www.latimes.com/business/la-fi-medical-prices-20120527,0,4627745.story. As accountant Paul Keckley states in the article, "[i]t frustrates people because there's no correlation between what things cost and what is charged."
So what is going on? Basically, hospitals and insurance companies negotiate prices for tests such as CT Scans based on a host of factors, such as prestige of the hospital and size of the insurance plan. As a result, prices vary wildly despite the actual cost of the test. Moreover, the cash price for those without insurance, which is not negotiated, can be quite different... and may be lower! The article cites another example: the costs for a routine blood work-up were $782 (list price), $415 (with insurance), or $95 (cash).
This has led to at least one lawsuit in California against an insurance company claiming unfair business practices.
Have you notices similar pricing discrepancies? Feel free to comment on this blog and tell us about it.
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