A settlement in a California court case is being touted by some as a symbolic victory over managed care, but others warn the case could signal a new era of physician versus physician litigation.
The litigation involved San Diego pediatric gastroenterologist Thomas Self, M.D., who charged he was wrongfully terminated in 1995 by Children's Associated Medical Group (CAMG) for spending too much time with patients and ordering too many tests. Self sued the multispecialty pediatric group in California Superior Court under a 1993 state law that was originally intended to protect physicians from HMO panel deselection and wrongful termination by health plans.
After the jury found in the first portion of the trial that CAMG acted with malice in defaming Self and awarded him $1.75 million in damages, the group agreed to settle the case for a total of $2.5 million.
"As provider-sponsored organizations and group practices take on what have traditionally been payer roles and responsibilities -- risk contract arrangements, utilization review in care management, obtaining licenses -- the issues that arise between managed-care companies or payers and providers will naturally have to be addressed by physicians in the future," says attorney Douglas Hastings of the Washington firm Epstein, Becker & Green.
While Self has appeared on national evening and morning news programs declaring a victory for patients, other physicians see a darker side to the settlement.
They fear as more group practices assume risk and take on payer-like responsibilities, doctor-led organizations will face more legal and financial challenges because they'll have to reorganize care delivery to better balance the bottom line.
"I think we will see more and more of this as physician organizations become more of a driving force in managed care," says Lowell Brown, an attorney specializing in labor law at Foley, Lardner, Weissburg & Aronson in Los Angeles.
Self worked for 12 years at the 77-physician group, which last year treated 35,000 patients, and says he prided himself on his reputation as a thorough doctor. Things started to change in 1994, he says, when the group began taking on more managed-care business and, among other things, pressuring physicians to see patients in 30 minutes or less.
According to Self's attorney, Sherry Bahrambeygui of Monaghan & Warren in San Diego, sometime in 1995 CAMG received a letter of complaint from an unnamed IPA to which the group sent referrals. The letter said Self ordered too many tests and was costing the IPA (which assumed risk) money. Self says CAMG was afraid of angering referring physicians and HMOs, and of losing future business. Within 30 days of the group's receiving the letter, Self was cut out of the budget, he says, and within two months he was fired. He filed suit a few months later.
In his complaint, Self stated he was fired because he "advocated a higher level of healthcare than his employer would tolerate under its new-age, medicine-for-profit scheme." Self also charged that members of the group began spreading rumors about him, saying the 56-year-old physician had lost his nerve and was lazy, senile and disabled. Patients who called CAMG were told that he was no longer in practice.
"I finally decided to sue when I realized I would not survive their defamation," he says. "It wasn't just that I was terminated, my group did everything they could to destroy me."
Self sued under the 1993 California Business and Professions Code, section 2056.
The law is intended to protect physicians who have been terminated by managed-care plans or other physician networks for advocating medically appropriate health care for their patients. California, Minnesota, Missouri and Virginia have similar legislation. The California law, sponsored and pushed through the legislature by the California Medical Association, was enacted because of complaints by physicians being deselected by HMOs. The law offers no specific recourse, but states that terminating physicians for advocating for appropriate patient care "violates public policy."
Most lawyers expected the law would be used against health plans rather than physicians, but Self says he turned to 2056 because it fit his situation. "It exemplified exactly what had happened to me," he says.
Attorney Bahrambeygui agrees the law was probably intended primarily for managed-care organizations, but now physician groups are the ones doing the dirty work.
"The managed-care organizations have very adeptly placed physicians in a position where they have no choice but to act as the agent of the managed-care organization," Bahrambeygui says. "Part of the (health plans') scheme is to shift utilization review down and create financial incentives within the scheme, so the physician groups will act in compliance with the objective of the managed-care organization."
In its defense, CAMG attorney David Noonan says Self's one-year contract was not renewed because of numerous workplace issues, and, therefore, is not a case of good versus evil, as he says Self is making it out to be.
"It essentially started out as a contract dispute. There was no discussion of 2056 at any point in time prior to when he filed the lawsuit," he says. "To say Dr. Self struck a blow against managed care is really farfetched. We're not managed care, we're struggling to deal with the changing healthcare landscape. To us this was a contract dispute. The notion that we are the personification of managed care is really misguided."
Michael Segall, M.D., director of neonatology with CAMG, says he objects to the national media coverage, which has depicted the case as a landmark decision against managed care. "We believe this is . . . purely and simply a contractual dispute between our corporation and an individual physician and unrelated to managed care," he says.
Noonan says Self's reliance on 2056 signals a dangerous trend in healthcare litigation. No one at CAMG "disputes that 2056 is valid and useful. We want the protection of 2056," he says. "What's disturbing is that 2056 could now be misapplied and raised by almost any physician as a defense or attempt to attack any decision to not renew his or her contract."
Whether Self's victory will lead to a rash of 2056-related lawsuits is unclear. Just last December a physician citing 2056 sued her group practice and lost. Claudia Jensen, M.D., failed to convince a jury that the Greater Valley Medical Group in Mission Hills, Calif., fired her because she spoke out against managed care practices. Instead, the jury agreed with the defendant that it fired Jensen because it was struggling financially.
Nonetheless, attorney Mark Kadzielski of Epstein, Becker & Green's Los Angeles Office, expects to see more termination cases filed. "There have always been physicians who have been terminated by groups, but they usually have gone quietly into the night and haven't chosen to fight because there were other opportunities available. Now, with difficulties in finding other positions, there may well be physicians who are willing to stay and fight," he says.
Kadzielski believes many provider groups don't pay enough attention to contract arrangements and have made themselves vulnerable to lawsuits like those brought by Self. Both sides in the Self case agree that provider contracts and performance documentation, areas often overlooked in the past, are vital to today's practice.
"CAMG took absolutely no steps to ascertain whether Dr. Self was indeed advocating for appropriate patient care," Bahrambeygui says. "They accused him of ordering too many tests, lacking clinical confidence, taking a shotgun approach to medicine, but when asked on the stand over and over again, 'What patient charts did you review in reaching that conclusion? Which patients had tests that were unnecessary or inappropriate?' They could not answer those questions. And I think that was the fatal flaw in this case."
Brown says groups need to prepare for employment lawsuits on three levels. "First, you need a credentialing policy that you follow; then, you need to have a corrective action policy that outlines the standards for physician behavior; and, last, you need to have some sort of fair hearing plan in place."