Health Law Pointers - Volume I, No. 1

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Physician Alert!

There is an expectation of privacy in our personal communications. However, there is no guaranteed right to privacy in e-mail, voicemail, and online communications, even if anonymous, if the equipment and technology supporting these communications belong to others, including employers. It is important to take special care when engaging in electronic communications, especially if the content of your message concerns others.

A group of disgruntled Phycor physicians learned this lesson the hard way when their management company sued them for libel. Several dissatisfied Phycor physicians had anonymously communicated their grievances about the management company over a Yahoo! message board. Phycor learned of the negative communications and subpoenaed the technology provider’s records, which revealed the identity of the physicians involved. It remains uncertain whether the libel charges can be proven. Nevertheless, defending such claims can be time-consuming, expensive and aggravating.


High-Tech Effect on Patients’ Medical Records Privacy Rights

Beware! Misguided e-mail messages to and from patients, if not appropriately protected, may expose your practice to liability for violating patients’ medical records privacy rights. Some experts in the field suggest entering into an "e-mail agreement" with your patients, in which the patients agree to share responsibility for maintaining confidentiality. Whether you use an e-mail agreement or not, it is crucial to educate your patients about how to effectively communicate with you via e-mail. For instance, advise the patient that it is not appropriate for you to send test results electronically or for the patient to present medical questions and/or problems via e-mail. Also, if the patient requests that medical information be sent to his employer’s designated e-mail address, warn the patient of the lack of confidentiality in the employer’s electronic mail system.

  • Lesson: If the patient insists on communication with your practice electronically, take all appropriate safety precautions and educate the patient on the potential dangers, especially the lack of privacy.


The United States Supreme Court to Decide the Fate of Lawsuits against HMOs

In January 2000, the United States Supreme Court will hear oral arguments in the matter of Pegram vs. Herdrich, 98-1949, appealed from 7th Circuit Court of Appeals, 154 F.3d 362. The issue presented to the High Court is whether the health maintenance organization ("HMO(s)") and its physicians have breached an ERISA required fiduciary duty to patients who have employee benefits covered by ERISA, by implementing a managed care program in which the HMO awards its physician panel members for providing medical care to HMO enrollees in a cost-efficient manner.

Prior Court decisions generally have denied patients the right to sue an HMO because of the "shield" created under ERISA to protect health plans such as HMOs from such lawsuits. The 7th Circuit held that patients may sue HMOs and physicians when they fail to act "solely in the interests of the participants and beneficiaries" of an employer-provided medical plan, a duty created under ERISA. This duty is breached when the physicians and HMOs place greater emphasis on containing costs rather than the best interests of the patients.

  • Watch for our summary of the Supreme Court’s ruling in this case which is expected to be released by June of 2000.



In the upcoming year, federal antitrust officials will be focusing their enforcement efforts on physician collaboration arrangements. Antitrust concerns arise when physicians practicing in the same specialty, and otherwise competing against each other (i.e. – all cardiovascular surgeons practicing in the same region), join forces to negotiate with managed care plans. These arrangements are often referred to as "strength in numbers" negotiating vehicles.

Antitrust officials filed a claim against one such group in 1998. United States vs. Federation of Physicians and Dentists, Inc. D. Del. No. 98-475, filed 8/12/98 (7 HLR 1319, 8/20/98). In that case it is alleged that the federation, a labor organization, encouraged its physician members to refuse to negotiate with a managed care plan, Blue Cross of Delaware, except through the federation. The goal of the federation was to force the managed care plan to increase fees paid to its physicians.

The Federation of Physicians and Dentists, Inc. matter is expected to go to trial early next spring. Watch this newsletter for more details regarding antitrust enforcement and the outcome of this case.

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