Medical & Nursing Home Liability Pointers - 5/27/21

A Message from Pat Curran

We are very pleased to announce that our team is growing with the addition of Kara Eyre to the firm.   Kara has over ten years of experience handling medical malpractice and long-term care litigation, as well as products, medical device, and general liability defense claims.  She is a proud graduate of the University of Pennsylvania and Benjamin N. Cardozo School of Law.  Welcome to the team, Kara!
 
The firm also continues to grow and expand its geographic presence with the addition of Thomas Casella as a Member of the Insurance Coverage Group working out of Utica, NY! Tom brings 15 years of legal experience to the firm, having spent the past ten years working at a large upstate NY insurance group. 
 
It’s legislative season and there is a lot to discuss.  As addressed below, New York is taking another run at universal healthcare. 

There is very dangerous bad-faith legislation pending in New York which would create a statutory cause of action for bad-faith.  As there are already common law remedies and statutory restrictions in place, this legislation is decidedly bad news for carriers as it will undoubtedly increase the cost of doing business in New York and severely curtail a carrier’s ability to contest disputed claims.  Our Coverage Team details the pitfalls of this legislation in this excellent article “Bad Faith Bill Would Tip The Scales Against Insurers” published on Law360.com.  Please feel free to contact Lee Siegel with any questions or comments on this important issue.
 
If that is not enough, there is more perilous insurance coverage legislation pending as a bill that would ban the use of lead paint exclusions in insurance policies for rental property owners is moving in the NYS Assembly.   While similar attempts at this legislation have stalled in the past, we are keeping a close eye on this situation which could potentially open the flood gates for new lead paint claims that were otherwise not pursued due to lack of coverage.
 
With New York having legalized recreational-use marijuana with the passage of the Marijuana Regulation & Taxation Act (MRTA), our Cannabis Law Practice Group will be addressing the implications on businesses, municipalities, employment, insurance and liability, in a bar association presentation “What Lawyers Should Know About the Marijuana Regulation and Taxation Act (MRTA).”  Please contact Amber Storr for more information or to set up specific training for your group.
 
Hurwitz & Fine Business & Commercial Litigation Chair Andrea Schillaci and Insurance Coverage Associate Ryan P. Maxwell  recently published “Protecting Your Business Against the Next Global Catastrophe: Contingent Business Interruption and Supply Chain Insurance” in the New York Law Journal.  Their article addresses the scope of commercial insurance coverages, including supply chain and contingent business interruption. With many recent global business challenges, including the Suez Canal crisis and the COVID-19 pandemic, they offer proactive business protections and advice to help mitigate the adverse consequences of future events.

We have two appellate decisions to discuss this month addressing very important topics.  The Fourth Department attempts to clarify the rights and obligations of litigants concerning defense requests for “speaking authorizations” permitting counsel to speak to plaintiff’s treating physicians. The Second Department addresses how an institution can be vicariously liable for the acts independent, non-employee, physicians.

Your COVID-19 Resource Center: Legal Updates Regarding the Coronavirus

Our teams are hard at work keeping you updated on the latest New York State and Federal updates concerning the coronavirus. Our Resource Center compiles all of the information that could affect you and your business during this pandemic.

New York Adopts CDC Guidance for Fully Vaccinated Individuals
Effective May 19, 2021, New York State has adopted the CDC’s recommendations for fully vaccinated people for most commercial operations and public settings, including retail, food services, offices, gyms and fitness centers, amusement and family entertainment, hair salons, barbershops, and other personal care settings. Meanwhile, unvaccinated people must continue to wear masks and maintain social distancing.
 
Pre-K through Grade 12 schools, public transit, homeless shelters, correctional facilities, nursing homes, and healthcare settings however must continue to follow previously existing COVID-19 health guidance (masks and social distancing) until more New Yorkers are fully vaccinated. Covered Businesses are additionally recommended to adhere to previous COVID-19 health guidance where the vaccination status of employees or patrons is unknown.
 
Importantly, the new guidance does not relieve any Covered Business of its obligations under prior NYS DOH guidance, including requirements to maintain a safety plan; engage in, review and document daily health screenings; make available personal protective equipment; or log visitors and worksite cleanings. Covered Businesses must also be mindful that any mask requirements may have federal, state or local law implications (e.g., accommodations may be required under the Americans with Disabilities Act, Title VII or New York law for those who cannot wear certain face coverings).  Businesses still must review and affirm compliance with the applicable industry guidelines on the New York Forward website.
 

Power of Attorney Changes to Take Effect
On June 13, 2021, several changes to New York State’s statutory short form power of attorney (POA) are to take effect. The present POA form – last updated nearly ten years ago – has been regarded as unduly complicated, prone to improper execution, and burdensome both to prepare and execute – particularly for seniors.
 
The new modifications are designed to simplify the current document; which includes allowing substantially compliant language rather than requiring exact wording throughout; providing “safe harbor” provisions for those acting in reliance of the POA; permitting sanctions against any individual or entity (such as a bank or financial institution) that unreasonably refuses to accept a valid POA; enabling a person to sign at the direction of the principal if he or she is physically unable to sign; clarifies that obligations of the agent under the POA to keep records and receipts; and allows agents to gift up to $5,000 per year without requiring a modification to the form.
 
The new changes in the law will not impact the validity of an existing POA executed in accordance with the provisions of the current law.

 
CMS Requires Nursing Homes to Report COVID Vaccinations
Medicare will require nursing homes to report COVID-19 vaccination rates for both residents and staff going forward, in the hopes of encouraging facilities to continue providing the vaccine as the effects of the pandemic begin to ease and facility vaccination rates are winding down. Nursing homes will now be required to submit weekly vaccination numbers for residents and staff to the CDC, with data to be posted publicly on Medicare’s “Compare Care” website for residents and family to access. That information should be available in the next two to four weeks.

 
New CMS Rules Cut ACA Out-Of-Pocket Costs
The Centers for Medicare and Medicaid finalized a series of regulations earlier this month that will impact the price of and access to 2022 Affordable Care Act exchange plans for some Americans. The changes are intended to lower out-of-pocket costs for ACA customers, streamline enrollee’s user experience, and update how insurers are paid for the risks they take on members. Consumers maximum out-of-pocket costs will be limited to $8,700 for individuals and $17,400 for plans that cover multiple people – this update is $400 lower than previous caps.

 
Will New York Pass Universal Healthcare?
A majority of lawmakers in both the state Assembly and Senate have signed on as sponsors of the New York Health Act (NYHA), which would establish a single-payer healthcare system covering every New Yorker, similar to the systems used in Canada and the UK. Economic assessment of the bill predicts total healthcare spending under the NYHA to clock in at $80 Billion less than under the current system over the next decade, while covering around a million previously uninsured New York residents. A major selling point is the promise that patients and doctors alike would no longer be beholden to the financial whims of insurance companies.
 
Critics are concerned that a deluge of new patients and increased healthcare expenditures could create a potential bottleneck for medical providers, while others balk at the idea of putting the onus on the state government to cover citizens. Additional fears regarding the inclusion of long-term care coverage and out-of-state commuters employed in the state may dissuade other lawmakers still from upending the current marketplace.
 
The bill is currently with the Ways and Means and Codes committees for further approval before it is potentially brought to the floor for a vote, having already been passed by the Assembly Health Committee on April 19.

Nicholas Sims v. Samuel Reyes et al. 
Appellate Division, Fourth Department 
May 7, 2021 
The Fourth Department reinforces defense counsel’s right to pursue ex parte interviews of a plaintiff’s treating physicians as fact witnesses but declines to expand prior holdings to create a right to conduct such interviews privately.
 
In Simms v. Samuel Reyes et al., plaintiff’s counsel insisted that any HIPAA authorizations allowing defendant’s attorney to speak with the plaintiff’s nonparty treating physicians include language stating, among other things, that “[a]lthough I am required to provide these defense lawyers with a written authorization permitting them to contact you, the law does not obligate you in any way to meet with them or talk to them . . .  If you decide to meet with their lawyers, I would ask that you let me know, because I would like the opportunity to be present or have my attorneys present.”  Defense counsel objected, asserting a right to interview the plaintiff’s treating physician privately, but nonetheless offered to accept authorizations with the disclaimer that “the purpose of the requested interview with the physician is solely to assist defense counsel at trial.  The physician is not obligated to speak with defense counsel prior to trial.  The interview is voluntary.”   
 

In Sims, the Fourth Department upheld the determination of the Supreme Court, Erie County [Marshall, Frederick J.], directing plaintiff to provide the authorizations with defendant’s proposed compromise language. The Fourth Department cited the broad discretion afforded to trial courts in controlling discovery and held that there was no abuse of discretion where the language in the ordered authorizations mirrored wording previously upheld by the Second Department in Porcelli v. Northern Westchester Hosp. Ctr. (65 A.D.3d 176, 178 [2d Dept., 2009]), and contained in the standard authorization form adopted by the Office of Court Administration for requesting interviews of treating physicians by defense counsel.

The Fourth Department reinforced the utility of informal discovery, including ex parte interviews of fact witnesses, noting that the Court of Appeals has repeatedly opined that such devices promote the efficient uncovering of relevant facts and the expeditious resolution of disputes.  The opinion also reinforced the holding in Aarons v. Jutkowitz [9 N.Y.3d 39 (2nd Dept. 2006)], affirming that defense counsel has the right to pursue ex parte interviews of a plaintiff’s nonparty treating physician, and that furnishing authorizations to the defense is merely a procedural prerequisite to this pursuit.  The Fourth Department declined, however, to expand the holding in Aarons to create a right of defense counsel to conduct ex parte interviews, explaining “that the physician may decline defendant’s request for an interview and does not explicitly or implicitly bar the presence of plaintiff’s attorney at such an interview.”
 

Goffredo v. St. Luke’s Cornwall Hospital 
Appellate Division, Second Department 
May 4, 2021
The Second Department reaffirms so-called “Mduba liability” holding that vicarious liability attaches to hospitals for the acts of independent, non-employee physicians whom a patient reasonably believes were assigned to their care by the hospital.   
 
In Goffredo v. St. Luke’s Cornwall Hospital, plaintiff moved for summary judgment seeking, in part, a determination that the defendant hospital was vicariously liable for the acts of a surgeon who treated the plaintiff after he arrived through the emergency room.  The surgeon was not employed by the defendant hospital, but was the on-call surgeon on the date in question pursuant to a services contract.  The Supreme Court, Orange County [Slobod, Elaine, J.] denied this part of the plaintiff’s motion, and the Second Department reversed.   
 
Generally, respondeat superior attaches liability to hospitals only for the negligence of their employees acting in the scope of their employment.  However, under the doctrine of ostensible agency, vicarious liability will be imposed when a defendant has represented to the injured party, by words or conduct, that another party is his agent and the injured party reasonably relied on that representation.  In medical malpractice, this is most commonly applied through the holding in Mduba v. Benedictine Hospital [52 A.D.2d 450 (3rd Dept. 1976)], which attaches liability to a defendant hospital even if the physician was an independent contractor and not an employee if that hospital held itself out to the public as an institution furnishing doctors, staff, and facilities for treatment, finding that patients should not be bound by the private contract understood between the hospital and physician.  

In Goffredo, the Third Department reaffirmed the Mduba doctrine, holding that the defendant hospital was liable for the acts of the independent contractor physician since the plaintiff had entered the hospital through the emergency room and sought treatment from the hospital, not the particular physician.

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