Va. Court to Rule on Malpractice Immunity for Charitable Care

January 15, 2008

The Virginia Supreme Court is expected to rule this spring on case that would spare tax-exempt physician foundations from malpractice suits because of their charitable care for the poor.

Parties in the debate call it the most significant matter taken up by justices regarding medical malpractice since 1990, when the court upheld the state’s limit on malpractice awards.

If successful, tax-exempt physician foundations in Virginia employing about 1,200 doctors and supporting the state’s three medical schools could win malpractice immunity.

The schools are at Virginia Commonwealth University, the University of Virginia and Eastern Virginia Medical School.

During arguments last week, lawyers representing three plaintiffs in malpractice suits told justices the so-called charitable immunity doctrine is being misapplied and cloaks multimillion-dollar institutions whose primary focus is profit.

“These are very efficient business models,” said Mathew B. Murray, who represents a family whose child was injured at birth.

The U.Va. Health Services Foundation generates about $215 million a year in revenue while less than 1 percent of costs are attributed to charitable care, Murray told the justices. A billing office employs 200 people and the foundation obtained about 6,000 judgments for nonpayment against patients in five years, he said.

One foundation doctor earned $850,000 in bonuses in 2005, according to court records.

Donald Morin, representing the foundations, defended the use of bonuses. He said they attract the best doctors and help bolster teaching. Preserving charitable care, he argued, is key to the foundations’ mission and promise to provide medical care “to anyone who walks in the door.”

The threats of lawsuit and court awards to injured patients jeopardize that mission, he argued.

At least a dozen medical malpractice cases linked to physicians affiliated with EVMS and U.Va. Medical School are in limbo until the issue is resolved. VCU has not sought such immunity.

Plaintiff lawyer L. Steven Emmert argued that if the charitable-immunity doctrine is upheld in medical malpractice cases, it could be applied to other physician groups and other professions.

Legislation increasing award limits by $50,000 annually expires this year. The cap is now $2 million.

Grounds for the immunity stem from a 2005 case in which the state Supreme Court ruled that a YMCA was immune from suit filed by a youth who was attacked within a YMCA facility.

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