PENNSYLVANIA LEGAL UPDATE
FALL 2001 ISSUE
HMOS' RESPONSIBILITY TO PATIENTS
HMO physicians occupy dual roles. They act as insurance plan administrators in making decisions regarding the coverage and services available to patients and they act as health-care providers when making decisions regarding a patient's treatment. Both Pennsylvania and federal courts have identified three types of decisions that HMO physicians make. "Pure eligibility decisions" focus on the policy's coverage of particular conditions or medical procedures. "Treatment decisions," by contrast, are choices about how to best diagnose and treat a patient. "Mixed eligibility and treatment decisions" are decisions in which both coverage questions and medical judgment are involved. Such decisions include the doctor's choice of diagnostic tests, the doctor's decision to use outside consultants, specialists, or facilities, the doctor's determination of whether a situation is an emergency, and the doctor's decisions regarding standards of care.
Recently, the Pennsylvania Supreme Court decided that individual patients have the right to sue HMOs and HMO physicians for medical malpractice in the making of mixed eligibility and treatment decisions. In the case at issue, a patient suffering from paralysis and numbness in his extremities was initially treated at a small community hospital and was diagnosed as suffering from a neurological emergency arising from a spinal infection. When the emergency room doctor sought approval from the patient's HMO to move him to a particular regional hospital that was ready to accept him for immediate emergency neurological surgery, the HMO refused the transfer because the regional hospital was not a member of the HMO. Over the next three hours, the emergency room doctor tried to arrange for prompt treatment at the other regional hospitals the HMO was willing to approve. The patient finally was moved to an approved regional hospital approximately four hours after his admission to the community hospital emergency room. Following his surgery and hospitalization, the patient's recovery was not successful; suffering from permanent quadriplegia, he sued the HMO and its decision-making physicians, claiming that the four-hour delay prevented his receiving successful surgery.
The Pennsylvania Supreme Court found that HMOs and their physicians are subject to suit in Pennsylvania courts and are not protected by federal laws limiting the kinds of suits that can be brought against employment benefit providers. Concluding that a decision on whether to move an emergency patient to a nonmember hospital that can accept the patient immediately is a mixed decision and not a coverage decision, the court upheld the patient's right to take his case against the HMO and its doctor to trial.
At trial, the patient will have to prove that his permanent disability is the direct result of the delay in his treatment. Patients who are not treated or not treated in a timely manner need also prove that they requested better or earlier health-care services. If you are dissatisfied with a decision by an HMO administrator or physician, be sure to keep clear records of the timing of your requests and the reasons given for the refusal of services.
HANDICAPPED PARKING VIOLATIONS
A Pennsylvania man recently avoided liability for parking in a space reserved for handicapped persons. Initially, the man was fined $200. He did not dispute the fact that he parked in a space in front of a public library posted with the familiar handicapped reserved-parking sign. He also did not dispute that he was not entitled to park there. However, he contested his conviction because the Pennsylvania statute that forbids unauthorized persons to park in handicapped spots requires that the posted sign must state the penalty amount of the fine and must state that vehicles in violation may be towed.
Describing the man's conduct as "reprehensible," the Pennsylvania court nevertheless admitted that it was "constrained" to dismiss the conviction because the statute is clear. The statute indicates that the sign "shall" state the penalty and the possibility of towing. If law enforcement authorities can prove that the spot was previously properly posted and a missing sign was due to be replaced, a conviction may stand. Otherwise, inadequate signage at a handicapped parking spot cannot support a conviction of a violation.
CONSTRUCTION SITE LIABILITY
Residential and commercial construction sites can be dangerous places for workers and visitors. Homeowners, landowners, general contractors, subcontractors, and design professionals all may be liable to workers and visitors injured on construction sites.
A homeowner can avoid liability by giving the general contractor full control of the job site during construction. If a homeowner oversees the construction, frequently visiting the site and making changes to the plans and specifications either by telephone or by direct communication with the contractor, the homeowner may be liable to people injured on the site. Pennsylvania courts have held that "active oversight" by a homeowner, coupled with a "consciousness of some authority to influence decisions," makes a homeowner a person "in control" of the job site and thus liable to others for safety problems. To avoid liability, a homeowner must relinquish full control to the contractor.
The general contractor hired to run a construction job site is not automatically liable for injuries that result from work entrusted to a subcontractor. Normally, the subcontractor whose work led to an injury is responsible to the injured party. However, if the general contractor had a "presence" at the job site and exercised "control" over the subcontractor's work, the general contractor may be liable to injured parties. Pennsylvania courts have observed that "responsibility goes with authority."
In analyzing the liability of general contractors and subcontractors, the courts look carefully at the written contracts and focus on the actual management of the job site. Even if a general contractor is legally responsible under OSHA regulations to maintain a safe work site and fails to do so, injured individuals may only sue the responsible subcontractors. Pennsylvania courts have held that a general contractor's OSHA violations can lead to fines but do not necessarily give rise to general liability to injured persons.
Engineers and architects may be liable to people injured on construction sites. If a written contract places safety, supervision, and inspection responsibilities on the design professional and if the professional is regularly at the job site exercising authority, the professional can be held liable for problems that lead to personal injuries. Design professionals whose contracts give them the right to supervise work cannot be held liable unless they actually exercise that right and maintain a controlling presence at the job site. Courts look for "constant participation" by the professional at the job site and also consider the professional's right to stop work as a critical aspect of the professional's authority. As with general contractors and subcontractors, a professional's authority can lead to a finding of liability to others.
Workers injured on job sites are eligible for workers' compensation and cannot sue their employers. However, where the general contractor's negligence or the negligence of a subcontractor leads to a worker's injuries, the worker may be entitled to workers' compensation benefits and separately sue the responsible general contractor or subcontractor. A general contractor can avoid liability by proving the "statutory employer defense" to a lawsuit by a worker. Where a general contractor controls a job site, the employees of subcontractors may be limited to workers' compensation claims against the general contractor. If the general contractor does not actively control the site, or the injured worker is an independent contractor and is not anyone's employee, the statutory employer defense may not operate to limit the injured employee's rights.
Anyone having liability for a construction job site can take steps to limit their liability. The written contracts that identify the rights and obligations of the owner, general contractor, subcontractor, and design professionals can be drafted to include "indemnity" agreements. All of the responsibility for safety on the site can be delegated to one individual or entity. Indemnity agreements are not a guarantee that a party will not be sued or found liable but they can serve to shift the ultimate financial liability to the individual or entity who agreed to take the responsibility for safety. Where contractors have signed indemnity agreements, it is critical that they observe the terms of the agreements and delegate responsibility for safety to the individual or entity made responsible in the written agreements. A written agreement that has been signed will not necessarily protect against construction site liability if the parties to the contract do not follow their written agreement once construction commences.
Anyone having the responsibility for safety on a construction job site should also review all relevant insurance policies to be sure there is adequate coverage, without exclusions, to cover potential liabilities.
If you are injured on a construction job site, whether as a worker or visitor, you need to review and understand all of the contracts involved and gain an understanding of the actual roles of the various people and companies involved in the project. Someone may be held responsible for any injuries that you incur.
TAX CREDIT FOR SUPPORTING SCHOOLS
Starting July 1, 2001, businesses that contribute money to qualifying scholarship organizations or organizations devoted to educational improvement can realize state tax credits known as Educational Improvement Tax Credits (EITC). The available tax credits are substantial, varying from 75% to 90% of the amount contributed by a business, not to exceed an annual total tax credit of $100,000.
The Pennsylvania Department of Revenue has been directed to develop guidelines to determine the eligibility of qualifying organizations and to post a list of qualified organizations on its website. Because these tax credits were enacted by the Pennsylvania legislature in May of 2001, complete guidelines have not yet been issued. To learn more about whether your company may qualify for this business tax credit and how you can secure approval for a contribution, visit the website www.revenue.state.pa.us/.
SPECIAL EDUCATION SERVICES FOR CHILDREN IN PRIVATE SCHOOLS
Students at private schools are entitled to receive special education services from public schools. A recent Pennsylvania case involved a parochial school kindergarten student who received speech and language services through the local Intermediate Unit (IU) at his parochial school.
When he entered first grade, the IU informed the student's parents that due to policy changes the IU would no longer provide any services at the parochial school. The parents appealed the district's denial of services, and the Pennsylvania court found that the student was entitled to services at the local public school. Acknowledging that children with special needs are entitled to "dual enrollment," the court ruled that the student did not have to give up his right to attend private school in order to receive special education services. While public schools need not pay for private education for exceptional students, they cannot deny special education services to children who are enrolled in private school and need additional services.
Dual enrollment in a private school and a public school district's gifted or special education programs must be provided to private school students by the public schools in order to provide a genuine opportunity to all students to receive needed educational services. The services provided must be comparable to those received by the exceptional students in the public schools. Students in need of services should request an Individualized Education Plan (IEP) from their local school district to support their request for special education services.
DISCOVERING WORK-RELATED INJURIES
Employees must notify their employers of work-related injuries within 120 days of the occurrence of the injuries. A Pennsylvania factory technician recently won her request to lengthen that deadline.
In carrying out her job duties, the technician tested plastic pellets for quality and conformance to specifications. While doing so, she was regularly exposed to hot fumes and dust from the processing of numerous chemicals, including formaldehyde. About five years after starting the job, the technician began to experience chronic respiratory distress and frequent bronchitis. Thirteen years after she started the job, the technician was diagnosed as suffering from emphysema, related both to her former smoking habits and her exposure to chemical fumes at work.
On the advice of her physician, the technician reported the cause of her injury to her employer and asked to be issued a special respirator on her return to work. The employer refused and dismissed her because she was not physically fit to work at the plant. Fourteen years after commencing her employment, the technician filed a workers' compensation claim.
The Pennsylvania Supreme Court upheld the worker's right to pursue compensation from her employer. The court found that workers do not have to give notice to their employers within 120 days of an injury if the nature of their injury or the injury's connection to their job duties are unknown to the employee. Distinguishing injuries that are the result of sudden accidents, the court found that where an injury is a "slow and silent process" workers are obliged to inform their employers within 120 days of their medical diagnosis or as soon as they are actually aware of the nature of their health problems. Workers who suffer from slowly developing, chronic diseases and conditions do have a duty to act reasonably in sharing information with their employers.
Employers whose workplace conditions can contribute to workers' chronic injuries should consider providing their employees with periodic diagnostic screening in order to best monitor and control work-related injuries.