Medical-legal issues in radiology: prevention and control

M E D I C A L - L E G A L I S S U E S IN R A D I O L O G Y : PREVENTION AND CONTROL

ABSTBACT.--Concerns about legal implications affect m a n y decisions of t h e average radiologist, a n d physicians do not always a p p r e c i a t e t h e validity of t h e s e c o n c e r n s . However, s u c h c o n c e r n s often i n f l u e n c e radiologists' decisions m o r e t h a n is w a r r a n t e d . An i m p r o v e d u n d e r standing of the law a n d its ramifications m a y serve to p r e v e n t a d v e r s e legal effects f o u n d in t h e everyday practice of radiology. Legal issues influence radiology in m a n y ways. Two i m p o r t a n t ways the law affects the practice of radiology relate to the business affairs of radiologists a n d to the radiologist's duty to p e r f o r m to a s t a n d a r d of care. Legal issues relate to the business aspects of radiology t h r o u g h radiologists' relationship to their g r o u p practice a n d the radiology group's relation to the outside world. Radiology g r o u p s use legal services for issues s u c h as e m p l o y m e n t contracts, hospital privileges, g r o u p relations, a n d bylaws. T h e y m a k e decisions with m a j o r legal implications w h e n they establish t h e i r stand a r d business practices. T h e s e decisions r a n g e f r o m b u s i n e s s p r o c e d u r e s that e n s u r e a timely delivery of service to t h e c h o i c e a n d implem e n t a t i o n of quality a s s u r a n c e systems to h o w to e n s u r e that patients a r e i n f o r m e d of the results of a radiologic examination. Legal m a t t e r s affect m a n y b u s i n e s s decisions radiology g r o u p s make. Antitrust law is c o n c e r n e d about issues s u c h as cost sharing, price sharing, m e r g e r s , acquisitions, a n d practice patterns. Laws limit t h e right to practice radiology. Billing practices, conflicts of interest, selfreferral, right to r e f u s e care, e m p l o y m e n t p r a c t i c e s - - a l l have substanti:d legal implications. T h e s e issues a r e a c o n c e r n of every practicing radiologist. Changes in o u r health c a r e system m a y c a u s e n e w legal obligations. An appreciation of t h e relationship radiologists m u s t have with payo r s a n d patients is increasingly i m p o r t a n t in preventing medical-legal problems. T h e s e additional duties a n d responsibilities o c c u r w h e n m a n y physicians a n d t h e public at large s e e m to feel t h e y a r e already o v e r b u r d e n e d with legal duties a n d responsibilities. A lack of familiarity with t h e legitimate relationship of the law to everyday life m a y greatly affect radiologists' job satisfaction. 144

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Many acts p h y s i c i a n s p e r f o r m in t h e practice of radiology have legal implications n o t often r e c o g n i z e d by t h e practicing radiologist. This m o n o g r a p h seeks to e n h a n c e radiologists' u n d e r s t a n d i n g of s o m e c o m m o n a n d i m p o r t a n t legal issues r e l a t e d to t h e i r p r a c t i c e of m e d i c i n e . We h o p e that this m o n o g r a p h will h e l p radiologists a p p r e c i a t e t h e legal implications of t h e i r behavior. T h e o p i n i o n s e x p r e s s e d in this m o n o g r a p h a r e t h o s e of t h e a u t h o r s a n d s h o u l d n o t be i n f e r r e d to rep r e s e n t t h e official views of a n y g o v e r n m e n t agency. Th/s/s n o t i n t e n d e d to be a s u b s t i t u t e f o r legal advice. We h o p e that a n i m p r o v e d u n d e r s t a n d ing of law will h e l p radiologists to m a k e g o o d d e c i s i o n s in their practices a n d t h e r e b y aid t h e patients they serve.

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E. James Potchen is a distinguished university professor and chairman of radiology at Michigan State University. He received a BS from Michigan State University, an MD from Wayne State University-- spending his radiology residency at Harvard University, Peter Bent Brigham Hospital-- an MSc degree from the Massachusetts Institute o f Technology, Sloan School o f Management, and a JD from the University of Michigan. Before moving to MSU, he served on the radiologic faculty o f Harvard University. At Mallinckrodt he was chief o f diagnostic radiology. At Johns Hopkins University he was professor of radiology and dean for management and resources at Johns Hopkins Medical School. He has served on seven scientific journal editorial boards. He has written or edited 31 books and has been the author and coauthor of 42 chapters in medical texts, in addition to 170 publications in the refereed press in the fields of chest radiology, neuroradiology, neuroscience, magnetic resonance, social economic implications o f medical care, breast cancer, and the role o f the university in technology transfer. He is a member of and has played leadership roles in many radiologic associations.

Joseph E. Potchen is an assistant attorney general for the State of Michigan. He received his BA in political philosophy and international relations from James Madison College at Michigan State University and his JD from Loyola University of Chicago. He is a member o f the American Bar Association, Michigan State Bar Association, Illinois Bar Association, and the Catholic Lawyers Guild.

L. Ray Bishop is the principal owner o f L. Ray Bishop & Associates in Ann Arbor, Mich(gan. He received his BS degree from the University of Utah and his JD degree from the University of Michigan. He is active in numerous law associations, including the American Bar Association, the Association o f Trial Lawyers of America, and the Michigan State Bar Association. He is the author or coauthor o f numerous law articles and book chapters.

Kathleen A. Snyder is in private practice in her own firm in Three Oaks, Michigan. She received her BA degree from Albion College, a JD from John Marshall Law School, and an ML in taxation from Depaul College of Law. She is a member of the American Bar Association, Michigan State Bar Association, and the Illinois Bar Association. 146

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M E D I C A L - L E G A L I S S U E S IN R A D I O L O G Y : PREVENTION AND CONTROL

LEGAL ISSUES

When radiologists discuss legal issues in medicine, they usually are c o n c e r n e d about the impact of medical malpractice. However, everyday business decisions radiologists make often involve other important legal ramifications. The concern about malpractice may prevail because physicians have more difficulty in dealing with their feelings w h e n a patient implies that a physician has not practiced good medicine. Some physicians cope so poorly with malpractice litigation that it can adversely affect their job satisfaction or, more important, their ability to practice quality medical care. Concern for malpractice litigation can have a negative effect on physicians' performance in inducing unwarranted defensive behavior in making clinical decisions. Some legal theorists assert that the fear of malpractice litigation results in improved vigilance in patient care; however, most medical professionals w o u l d claim that defensive medicine practice c a u s e d by our s y s t e m of malpractice litigation has a negative effect on the cost and quality of medical care. The latter is true w h e n it involves decisions m a d e in radiologic diagnosis. For example, in mammography, false-positive results c a u s e d by efforts to avoid malpractice litigation may cause as much, or more, total h u m a n suffering than missed cancers. We have been unable to find instances in which a radiologist was sued for inducing a suspicion of cancer in a patient with a normal mammogram, yet every radiologist knows of cases in which breast cancer was missed and malpractice was claimed. Perhaps an improved unCurr Probl Diagn Radiol, July/August 1995

derstanding of the legal issues involved in medical malpractice litigation w o u l d aid the radiologist in confronting these concerns. A decrease in unnecessary defensive medical practices should lead to a general improvement in patient care. Therefore we discuss malpractice involving diagnostic radiology at some length, hoping to clarify issues about which there m a y be persistent misunderstanding. The traditional radiologic issue in medical malpractice is the failure to diagnose. Most often this is a failure to diagnose cancer. A second major area in which radiologic practice is prone to malpractice claims is in the field of interventional radiology and in the use of contrast material. We address these issues in greater depth in our discussion of medical malpractice law. In our view, radiologists should have a sufficient understanding of the sources and nature of laws so that they can make informed decisions regarding their o w n behavior. We h o p e this knowledge will also increase radiologists' ability to influence the development of rules and laws that affect the diagnostic radiologist's capacity to serve patients and the public properly. Radiologists should understand the limits and opportt~nities of diagnostic radiology. At times, however, the ability to realize the potential of radiology to serve patients is limited by forces that seem b e y o n d the radiologist's control. An improved appreciation of the world as viewed by the legal profession m a y remove some of the perceived limitations. We can foresee that changes will likely occur in the practice of radiology. Our legal system influences s o m e of these changes in ways most radiolo147

gists may not fully appreciate. Our responsibilities and duties may change without our knowledge or participation. Understanding the process of change in the law may e n h a n c e our ability to live with what we cannot influence, while improving those aspects of radiology we can influence. The legal duties of radiologists may change without radiologists being aware of the change. However, an aware radiologist might influence the nature of the change to the benefit of patients. For example, recently, the U.S. Court of Appeals held that a radiologist has the duty to inform a patient of an abnormal chest radiographic finding in which the radiologist diagnosed tuberculosis. 1 This duty was imposed, even though a proper report was sent to the referring physician. The court found that the radiologist h a d a duty to the patient i n d e p e n d e n t of the more traditional physician-patient relationship. The decision implies that a patient who purchases the services of a radiologist has a right to be informed of the interpretation of the films by the radiologist

T H E N A T U B E O F T H E LAW

The study of law is a study of rules. A classic course in legislation was once described as a course in ~How do y o u make rules that people will live by?" Rules derive from m a n y sources. They affect our daffy lives a n d our professional careers. These rules come from sources as diverse as the Ten C o m m a n d m e n t s and the bylaws of a social club. Legal rules affecting radiologists usually derive from some form of legislation or the c o m m o n law. It is important to appreciate this distinction w h e n one seeks to redress rules considered inappropriate. HISTORY

The c o m m o n law originated in England from the time of William the Conqueror. King William set up a system of local tribunals in which conflict could be resolved by a hearing before a group of peers. These hearings were t h e n recorded. Prior decisions on the same or similar issues evoked a consistent response in subsequent hearings. This recording of h o w groups had chosen to resolve conflict led to the development of the law held in c o m m o n by the people. These c o m m o n law rules allowed for n e w information to be brought before a subsequent tribunal. The subsequent trier w o u l d distinguish the issues in the present case from previous cases of a similar nature. This process also allowed for change in social values. The tribunal altered the rules if previous decisions were not held consistent with changing social values. The c o m m o n law also who performed the service. What are the limits of allows different communities to have different rules a radiologist's duties regarding the physician- w h e n faced with the circumstance reflecting that patient relationship derived from the practice of community's value system. Over time, the British radiology? We address this question in our system of c o m m o n law was disseminated worlddiscussion of h o w legal duties arise. wide through the British Empire. C o m m o n law is We hope that this monograph will enhance radi- n o w the basis of m u c h law found in the old British ologists' discussion and dialogue as to the legal im- c o m m o n w e a l t h of nations. plications of the practice of radiology. It is in Even though the American legal system is a hyeverybody's interest for radiology practices to maxi- brid mixture of rules a n d laws from various mize the opportunity to serve the public. There are sources, the distinction between codification a n d times w h e n a profession such as radiology seems c o m m o n law is useful to appreciate the source of detached from the legal and social implications of American legal rules. the profession. Some radiologists may not fully The theory of legal codification is that future appreciate h o w to better their opportunities to problems in society can be envisioned. The comserve in the practice of their profession. Although munity's governing body should therefore develop we appreciate that this m o n o g r a p h cannot be rules to address these problems before the proball encompassing, we attempt to hit some high- lems arise. These rules are written d o w n a n d aplights with some in-depth examples to help de- proved by the system that is acceptable to society velop an u n d e r s t a n d i n g of h o w laws change and as a whole. This system seeks to maximize the preh o w radiologists may influence that change for dictability of an outcome should a disagreement the better. occur. However, a purely codified legal system can-

The court found that the radiologist had a duty to the patient independent of the more traditional physician-patient relationship.

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not predict all future problems. It is thereby limited in its range of response to social change.

LEGAL THEORIES

C o m m o n law theory asserts that rules cannot be m a d e to e n c o m p a s s all future problems. Jurisdictions that have only codified law attempt to anticipate all future problems by crafting rules to address them. If the problems occur, those rules are to be enforced. This is the basis of legislation even in jurisdictions based in the c o m m o n law. Most laws in the United States are codified rather than pure c o m m o n law. However, both sources of rules affect radiology. Legislated law and administrative rule making are essentially codifications of rules established by processes that the public has accepted as fair and reasonable. Legislation is one w a y we establish rules. C o m m o n law is not established by such a mechanism, although legislatures frequently seek to codify aspects of accepted c o m m o n law. Comm o n law does not require that rules be written and ratified by an established legislative body. Rather, judicial p r e c e d e n c e crafts the applicable rules. Prior decisions by courts of law establish the rules that are to be applied in s u b s e q u e n t cases. Comm o n law asserts that the court will listen to the entire issue and make a reasonable decision based on experiences of other people handling a similar problem. Most legal rules that involve radiologic business practices are codified. These rules are found in the Uniform Commercial Code or in federal, state, or local legislation. The Uniform Commercial Code is a compilation of c o m m e r c e rules accepted by all of the state jurisdictions. Federal law is written for the nation as a whole. State and local laws are applicable only in the jurisdiction that approved them. The Supreme Court interprets the constitution to define the legal boundaries b e t w e e n federal, state, and local laws. The United States Constitution ultimately limits the enforcement of all laws, all rules, and rule-making procedures in the United States. Corporate bylaws of every radiologic corporation form rules that affect most radiologists in practice. These bylaws derive their legitimacy through the group's acceptance. Lawyers usually write the bylaws u n d e r the direction of the group. They attempt to define the n e e d s of the individuals w h o organize the group. Most bylaws have a' mechanism for modification through an a m e n d m e n t clause. Thus radiologists in practice or radiologists joining Curr Probl Dia~ l~dioL July/August 1995

another radiology group are frequently familiar with the rules of their o w n group practice. However, disagreements concerning these rules or their enforcement may result in litigation b e t w e e n members of a radiology group. In this type of litigation, the court will interpret the bylaws and decide w h e t h e r the facts of the case s u p p o r t a contention that the bylaws were violated. A c o m m o n issue in enforcing such rules is the issue of d u e process in the termination of an employee. This is discussed further in the section dealing with the business practices of a radiology group. THE SOURCES OF THE LAW

Rules we live by emanate from the c o m m o n law, legislation, administrative rules designed to enforce legislation, and the bylaws or organizational rules in any organization of which we choose to be a member. Many rules and laws have a substantial influence on the practice of radiology. We limit the discussion to two areas of interest to radiologists (i.e., child-abuse reporting and communication of radiologic reports directly to patients). These two areas provide examples of the w a y rules that affect radiology are established. The Reporting o f Child Abuse Most states have enacted laws requiring the report of child abuse. Those statutes mandate that physicians aware of child abuse notify a p r o p e r authority. Usually this is the responsibility of the primary attending physician. However, ff a radiograph shows an abnormality reasonably interpreted to have been caused by child abuse, most laws require that the radiologist at least notify the primary attending physician. Some laws go further and require the radiologist to directly notify a p r o p e r public authority. These laws are usually enacted as a part of state code by state legislatures. For example, California Section 11166 (1994) 2 requires that a health practitioner w h o "has knowledge or observes a child in his or her professional capacity, or within the scope of his or her employment, w h o he or she knows, or reasonably suspects, is the victim of child abuse" to report this "reformation to the child protective agency. One problem with radiologists' reporting a suspicion of child abuse has been a concern for the liability that m a y o c c u r ff the suspicion is in error. Can a parent erroneously a c c u s e d of child abuse sue the accuser? Most statutes give immunity from civil and criminal action to physicians and other professionals who, in good faith, report s u s p e c t e d instances of child abuse. This immunity derives

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some jurisdictions are constructing this legal premise. Currently, the requirement holding the radiologist ultimately responsible for failure to have the results of a radiologic p r o c e d u r e c o m m u n i cated to the patient is not law in all jurisdictions. However, the m a n n e r by which this legal duty may become m o r e widespread is worth review. Such a review is an example h o w significant changes m a y occur in the practice of radiology through diverse legal processes. Does the radiologist have a legal role in direct communication with the patient? Is the traditional practice of providing the referring physician a report of a radiographic interpretation sufficient to meet radiologist's duty to have information derived from the radiograph available to benefit the patient? A recent survey c o n d u c t e d by Bassett et el. of the University of California in Los Angeles, and reported at the 1993 meeting of the Radiological Society of North America, found that 94% of patients strongly agreed that radiologists should inform patients about the normal m a m m o g r a p h i c results directly. Eighty-seven percent of the patients The courts do not accept surveyed strongly agreed they w a n t e d to hear the from radiologists, even if the results were radiologists' lack of knowledge of results abnormal. This survey found that most referring their responsibility or of the law physicians agreed with the patients. Eighty-five percent of the referring physicians strongly agreed as reason for failure to report that the normal results should be reported to the suspected child abuse. Ignorance patient by the radiologist, and 59% agreed that the abnormal results should be reported by the of the law is no excuse. radiologists. Many radiologists practicing m a m m o g r a p h y already directly c o m m u n i c a t e with their patients. In fact, direct communication is becoming a standard these penalties will always be subjected to the due in m a n y m a m m o g r a p h y practices. When is some process requirements of the Constitution. However, expert witness going to testify that this practice is the courts do not accept radiologists' lack of knowl- the standard of care? This standard m a y influence edge of their responsibility or of the law as reason ultimate litigation i n d e p e n d e n t of federal governfor failure to report suspected child abuse. Igno- m e n t rules. A likely possibility exists that a court rance of the law is no excuse. may agree with an expert's testimony that the standard of care is to have the radiologist directly comThe Radiologist's Physician-Patient Relationship municate with the patient about h e r m a m m o g r a m The second example of laws and rule making that results. If other courts subsequently agree with this affect the clinical practice of radiology relates to the finding, then judicial precedent at c o m m o n law recent concerns about the responsibility to com- would have been established. The attempt by the municate information to a patient. Who is respon- federal government to make federal rules on this issible for informing the patient about an abnormal sue may influence subsequent decisions of the radiographic finding? Generally, this obligation has courts regarding the appropriate standard of radiobeen the responsibility of the primary attending logic practice. physician. However, the radiologist may be held responsible w h e n a patient is not informed. This is a Mammography Quality Standards Act novel concept that clearly adds a duty to the radiRecently the Food and Drug Administration ologist in practicing diagnostic radiology. Federal (FDA) promulgated rules as interim regulations enrule making and c o m m o n law development in forcing the M a m m o g r a p h y Quality Standards Act.3

from legislatively enacted statutes. These childabuse statutes generally require a reasonable suspicion of child abuse. They also identify the categories of individuals w h o m u s t report their suspicions and to w h o m they m u s t be reported. Radiologists w h o interpret pediatric radiographs should be aware of their state law on child-abuse reporting in their jurisdiction. Frequently the individual with the greatest responsibility is the first person who discovers a suspected child-abuse case. Most of the laws define the timing and m e t h o d of reporting. They usually define w h e n the reporting is m a n d a tory and identify the penalties for failure to report. Finally, radiologists must be aware of the status of the immunity clause in their local child-abuse law. Radiologists w h o interpret pediatric films potentially leading to a claim of child abuse should obtain a copy of the child-abuse reporting laws in their state. A failure to do this has defined penalties enforceable by the state. The enforcement of

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These rules require radiologists to send the report of the m a m m o g r a p h i c findings to the referring physician and leave it up to the radiologists w h e t h e r to discuss the results directly with the patient. Previously, the Health Care Financing Administration (HCFA) policy required that radiologists provide the report to the patient and not just to the referring physician. Some physicians in other specialties perceive these legal rules requiring radiologists to c o m m u n i c a t e directly with patients as an infringement on their responsibilities to their patients. However, these initial administrative rules by the HCFA were built on the premise that instances have occurred in which the communication chain is insufficient to have the m a m m o g r a p h i c observations directly affect the patient. Quite simply, reports fell b e t w e e n the cracks. Patients d e m a n d e d a greater opportunity to be m a d e aware of their m a m m o graphic findings. On October 1, 1994, the M a m m o g r a p h y Quality Standards Act took effect. Administrative rule makers seeking to enforce this Act-have had a difference of opinion concerning the most appropriate response to the Act's requirement that patients ultimately receive the benefit from their mammograms. This difference has resulted in one initial rule prop o s e d by the HCFA and a second less stringent enforcement advocated by the FDA, w h o presently have the responsibility for the enforcement of the M a m m o g r a p h y Quality Standards Act. An appreciation for the source of these rules can aid in understanding h o w these rules may change and what is currently required in the practice of radiology. Clearly any efforts to improve communication with patients will be seen in a preferred light by patients, referring physicians, and the federal government. Under the most recent FDA requirements, radiologists are not required to provide a written report to every patient. The initial rules made to enforce the M a m m o g r a p h y Quality Standards Act require that radiologists send reports to the patient's primary physician, even if that physician did not refer the patient for mammography. Federal administrators working for the FDA write these rules. They use the advice of experts from the radiology profession as well as other medical disciplines to decide h o w best to enforce the laws Congress enacts. The M a m m o g r a p h y Quality Standards Act, which Congress p a s s e d and the President signed, does not include detail as to h o w to enforce the Act. A major concern a d d r e s s e d in the Act is the need for adequate c o m m u n i c a t i o n , of m a m m o graphic results. Enacted laws can go into this detaft, but usually they do not. The details of enforcement are left to federal administrators. These details m a y be extremely important to the practice Curt Probl Diagn Radiol, July/AuguSt 1995

of radiology and to the legal liabilities of practicing radiologists. These rules do not emanate from t o m m o n law nor are they specified in the code enacted by the Congress. They nevertheless have the same legal force as rules derived from other sources. The federal administrator may change them through the same process of federal rule making that established the rules in the first place.

Current Developments The case of Daly v the United States is another development directly affecting the responsibility of radiologists for patients u n d e r their care. This case addresses the physician-patient relationship role of radiology. It is worth examining in considerable detail. In Daly, the Ninth Circuit Court held that u n d e r Washington state law, an examining physician has a duty to inform those examined of an abnormal test result, even though a physician-patient relationship did not exist. The court also found that an original examining physician is liable for the negligence of a s u b s e q u e n t examining physician only w h e n the s u b s e q u e n t physician acted to decrease the harm caused by the original examining physician. These findings may have widespread implications to the practice of radiology. In Daly, the radiologist found an abnormality on a chest radiograph and suggested the diagnosis of tuberculosis. The patient had a negative tuberculin test result. The radiologist did not inform the patient of the abnormality found; rather, he dictated a standard report and sent it to the referring physician. The district court awarded the patient a judgment of nearly a half million dollars. They found that the defendant radiologist had a duty to inform the plaintiff of the abnormality. The breach of that duty allowed the disease to progress, causing disability. The defendant was held liable for all resulting damages, irrespective of w h e t h e r there was intervening negligence by a private physician. In this case the private physician did not follow-up on the radiograph report of possible tuberculosis. The court found that the harm was caused by the radiologist. The court held that disclosure of the abnormality falls within the scope of duty o w e d by a radiologist to a plaintiff. This ruling went against prior precedent. Previously, a physician-patient relationship was required before a d u t y was o w e d to a patient. The federal court in the Daly case found that liability can arise b e y o n d the context of a physician-patient relationship. Clarifying their ruling, the court stated that an original physician may ' be held liable for the malpractice of the second physician only w h e n the s e c o n d physician's treat151

m e n t is designed to decrease the harm caused by the original physician's negligence. Here, the original examining radiologist f o u n d an abnormality, and the subsequent treating physician did nothing in response to the radiologist's finding. The radiologist was held liable because *most patients examined by a physician expected that the physician will disclose all relevant information." This holding requires that physicians meet patients' reasonable expectations of care. The court believed that patients reasonably expect radiologists who find an abnormality to ensure that the finding eventually benefits the patient. Although this is an u n u s u a l case, m a n y radiology practices have developed an increasingly closer relationship to patients. The courts and federal regulators are beginning to find that radiologists owe a direct responsibility (duty) to the patients

The basic premise in a medical rrialpractice cause of action is that the physician has breached a duty owed to an injured party. The elements o f duty, breach, and injury are essential elements of actionable negligence. coming to them for radiologic services. This responsibility seems to be going beyond the requirem e n t that the abnormalities be c o m m u n i c a t e d only to the referring physician. If the HCFA rules prevail or if the Daly ruling is accepted as precedent, radiologists will be legally required to communicate their findings directly to the patients they serve. Accordingly, some radiologists are becoming more involved in their extension of primary care. These radiologists are positioned as the initial patient encounter after primary care. This closer link between radiologists and primary care physicians may result in radiologists becoming more closely involved in the primary care of patients. If that trend becomes established, the legal duty of the radiologists to communicate their findings directly to the patients will be even more obvious. THE SOURCE OF LEGAL DUTY

The fact that a person has been injured is not in itself actionable. The basic premise in a medical 1~2

malpractice cause of action is that the physician has breached a d u t y owed to an injured party. The elements of duty, breach, and injury are essential elements of actionable negligence. "It is essential to liability for negligence that the parties shall have sustained a relationship recognized by law as the foundation of a d u t y of care, some relationship shall exist between the one inflicting the injury and the person injured, by which the former owes some duty to the latter. "4 The relationships that are recognized by law not only include the traditional c o m m o n law relationships but may also be created by the following: statute, administrative regulation, ordinances, and societal needs. Statute

The legislative intent in the passing of a statute designed to define a certain condition or activity that is held to be unacceptable u n d e r the law gives rise to an action for negligence. If an individual violates a statutory provision, a plaintiff m a y recover damages regardless of actual negligence, as that term is used in the sense of a breach of the d u t y to exercise due care to avoid injuring another. Jurisdictions differ in defining the c o n d u c t that violates the statutes and may subject the violator to absolute liability without the affirmative defenses of assumption of risk or contributory negligence. A d m i n i s t r a t i v e Regulation

Rules and regulations that are constitutionally valid may have the same force a n d effect as the law. In the jurisdictions that hold that rules a n d regulations have the same force and effect as the law, a violation of the rules may constitute negligence per se. The underlying principle that m u s t be present to constitute negligence per se is w h e t h e r the application is necessary to effectuate the legislative purpose. 5 One Illinois court f o u n d that the violation of an administrative rule that was designed to protect h u m a n life was prima facie evidence of negligence .6 Ordinances

An ordinance, provided it is within its proper scope, will have the same force a n d effect as the law. Some jurisdictions have held that the violation of the ordinance constitutes a breach of d u t y toward the person injured by the violation.~ The jurisdictions are divided concerning the effect of the violation of an ordinance. Some jurisdictions consider the violation to be "evidence of negligence/8 and others consider the violation to be "negligence per se, "9 whereas other jurisdictions have found that a valid ordinance that imposes a d u t y of care constitutes a rebuttable evidence of negligence. 1° Curr Probl Diabm Radiol, July/August1_995

Societal Needs Societal needs are the sine que non of negligence law in that people in a society will conform to a set standard of acceptable conduct. This requirem e n t or "duty" is imposed on all members of society. Whoever breaks the d u t y is held liable for the injury caused. 11 In the law of negligence, the question of d u t y is simply the problem of the degree to which one's uncontrolled a n d undisciplined activities will be curtailed by the courts in recognition of the needs of organized society. THE RELATION OF LAW AND MEDICINE

One way to appreciate the differences between the practice of medicine and the practice of law is to identify the purpose of each profession. Some people say that the purpose of medicine is to diminish that c o m p o n e n t of h u m a n misery caused by disease. Reflections by legal philosophers infer similarly that the purpose of law is to decrease that c o m p o n e n t of h u m a n misery caused by conflict. Lawyers, theoretically, play a role in society of diminishing conflict normally occurring w h e n any two individuals or groups of individuals disagree. The disagreement may be about w h e t h e r people abided by their promises in contract or w h e t h e r one person was injured by another. In some cultures, w h e n one person injured another the law required an eye for an eye. Other cultures sought to resolve group conflict through wars or individual differences through duels. Western society developed a judicial system that allows for the resolution of conflict in an arena perhaps only slightly more h u m a n e , than that in which duels were fought. That arena is a court of law. LEGAL EDUCATION

To u n d e r s t a n d what lawyers are, it may be useful to review what lawyers learn. We therefore briefly review the core law school curriculum to appreciate what subjects law students study to become lawyers. The approach is akin to attempting to learn what doctors are by finding out what subjects they have to learn to become licensed as physicians. The basic approach to a legal education clearly differs from the medical school approach. One way to summarize the distinction is that whereas medical schools heavily devote time to learning a remarkable n u m b e r of scientific and clinical facts, law schools predominantly study process by analysis of prior legal cases. The core curriculum of every law school requires courses in crime, tort, contract, property, and procedure. Criminal law is a study of the relationship of the Curr Probl Diagn Radiol, July/August 1995

individual to the state. The state has a perceived right to adversely affect an individual w h o - g o e s against established rules or laws. Criminal law reviews these rules and h o w they protect the society as a whole. Tort is derived from the Latin word tortun, which means to twist. A course in tort law covers wrongful acts causing injury. These acts. are done either willfully, negligently, or in circumstances involving strict liability but not involving a breach of contract. For example, in medical malpractice, w h e n someone feels injured by an act of a physician practicing medicine, he or she can seek an action in tort law. Most radiologic involvement in medical malpractice is an issue of tort law. Contract law derives from the law of promise. Essentially, a contract is a promise to do something for which one receives consideration. The idea of consideration is broad, as m a n y things may be adequate consideration that requires a promisor to

Western society developed a judicial system that allows f o r the resolution o f conflict in an arena perhaps only slightly m o r e humane than that in which duels were fought. That arena is a court o f law. keep his or her promise. Essentially the law of contract is about the obligations due w h e n one h u m a n being promises something to another. Contract law essentially requires that a promisor abide by a promise or pay the penalties that ensue from the damages caused by the promise not being kept. Property law is the legal subject that deals with the rights a n d obligations of individuals or groups toward real property or chattel. Chattel is an article of personal or movable property. One definition of the property right is the right to exclude others from use. Indeed, most property law can be red u c e d in simplistic terms to the implication of the rights to exclude others from use. Finally, law schools usually require courses in civil and criminal procedure. Years ago, the major concept lawyers knew that the average layman did not know was procedure. Using the knowledge of. writs a n d legal procedure was the major portion of a lawyer's daily activity. Procedure entails the study lff~

of the processes established for people to ensure that all have a fair opportunity at the time of conflict. Procedural rules are created to assure that even those people not involved in the conflict agree that the conflict was resolved in a fair and equitable manner. The laws of procedure involve a wide variety of technical aspects of litigation, ranging from the rules of evidence (e.g., hearsay) to the rules involving the statute of limitations in the medical malpractice case. Proper application of these rules is extremely important in the practice of law. An aspect of procedural law not u n d e r s t o o d by m a n y physicians relates to issues of standing and jurisdiction. For any litigation to occur, the court hearing the litigation must have jurisdiction over the case. Additionally, the individual bringing suit must have "standing ~ to bring the suit. Third parties may not bring suits if they are not affected by the adverse act' that resulted in conflict. The State brings litigation largely through its attorney general or prosecuting attorneys, who represent the interest of the public at large. OnCe interesting variation on standing applies to cases in which a physician is suspected of acts that

If someone defrauds the federal goverr ment, triple damages are the rule. defraud the federal government. This may become more an issue as the federal government becomes increasingly involved in payments for physicians' services. An old rule termed q u e t a m allows for "private~ individuals to take action on behalf of the state w h e n the state has been defrauded. In recent years, que tam has been applied to areas of fraudulent government purchases, especially in defense contracting. The concept essentially says that an individual m a y bring action to help the attorney general because individuals may have more knowledge of the fraud than does the attorney general. In addition, the application of que tam increases the probability that an individual who defrauded the government is brought to justice. Therefore persons who are aware of other individuals defrauding the United States federal government may achieve standing to litigate on behalf of the federal government. This concept has been used largely against defense contractors who were accused of defrauding of the federal government. Recently this approach has been applied to Medicaid a n d Medicare fraud. 1~4

Under Medicare, the federal government has a contract with an individual physician to reimburse for patient care. If the physician is paid by the federal government for care that was inappropriate or not performed, then the physician may be found guilty of Medicaid fraud. Under que tam, any citizen w h o has knowledge of this act has the opportunity to bring suit against the physician. Quite possibly, disgruntled employees or even patients w h o are disaffected with their medical care and become aware of inappropriate billing and collection from the federal government may initiate litigation on behalf of the government. There is even more incentive for such litigation in the distribution of the monies recovered u n d e r such litigation. Citizens who bring successful que tam litigation against a federal gove r n m e n t contractor can share in the monies ret u r n e d to the federal government. If someone defrauds the federal government, triple damages are the rule. Three times the a m o u n t of m o n e y lost by the federal government m u s t be paid to the federal government, of wh[ch one third goes to the individual bringing forward litigation u n d e r que tam. If this became widely known and applied, there may be a large n u m b e r of fraud claims brought against physicians and other federal government contractors. T H E B U S I N E S S OF R A D I O L O G Y THE RADIOLOGY GROUP

In planning to join or form a practice group, the radiologist m u s t choose the most appropriate form of legal entity to provide radiology services. Considerations, such as preferences in governance and management, organizational structure, liability exposure of the entity and its controlling persons, investor liability, a n d tax liability must be evaluated in making the choice of entity. Because of the liability protection and certain tax advantages of a corporation, most radiologists provide their services as employees of a professional service corporation. This section discusses the formation, structure, and principal attributes of perhaps the most c o m m o n entity, the professional service corporation. We also discuss an emerging business entity that radiologists may be using to obtain certain tax and liability advantages, the limited liability company. HISTORY

At c o m m o n law, the practice of a profession, such as medicine, was not a permissible purpose for forming a corporation. This restriction was embodied in the Corporate Practice of Medicine DocCurr Probl Diagn Radioi, July/August 1995

trine. The theoretical rational for this doctrine is that, because only a "real" person can undergo the training, examination, and character screening that are prerequisites to professional licensure, a corporation, or Uartificial person," cannot be licensed and, therefore, cannot practice the profession of medicine. Rules were developed against the corporate practice of medicine to prevent commercial exploitation of the health care field by organizations motivated more by a desire for profit than by a c o m m i t m e n t to patients' well-being and quality of care. az This s o m e w h a t obscure doctrine, although largely ignored, is still important because it can have devastating effects if it is found applicable to a particular arrangement, a3 Possible legal risks include the refusal to enforce contracts for medical services and injunctions or even criminal sanctions against illegal business arrangements. For instance, in the South Dakota case of St. Paul Ramsey Medical Center v Codington County, a4 a c o u n t y was allowed to refuse p a y m e n t to ~ physician clinic under a contract it h a d negotiated for indigent care service, even though the service h a d already been rendered over a 3-year period. In Flynn Brothers, Inc. v First Medical Associates, TM a Texas court held that a m a n a g e m e n t contract and a partnership agreement between a physician and a medical service contractor were illegal. The court said that an arrangement giving a nonphysician partner 66.6% of profits, rights to trade and commercialize on a medical license, a n d rights to select medical staff to work in the hospitals u n d e r contract violated the state's medical practice act. Today, almost all states permit the organization of corporations that are formed to practice a profession, such as medicine. Practice formats such as that invalidated in Bartron, involving exclusive physician ownership of a group practice, are n o w perm i r e d by professional corporation laws. In the 1960s laws authorizing professional corporations were passed by all states to enable physicians and other professionals to incorporate and obtain tax and pension benefits that previously had been available to owners a n d employees of corporations. The impetus for the change came w h e n shareholders of closed corporations were in a more favorable position with regard to the establishment of pension a n d profit-sharing plans than were the owners of proprietorships and members of partnerships )6 THE CORPORATION IN GENERAL

A corporation is a legal entity formed u n d e r the enabling statute of a state. It can be public or priCurt Probl Diagn Radiol, July/AusXlst1995

vate, profit or nonprofit, publicly held or closely held. Whatever its form, the corporations' distinguishing feature is that it is a separate legal entity, distinct from its owners. 17 As a separate entity, the corporation can own property and incur debts. It has the right to enter into contracts, may sue or be sued in its own name, and must pay taxes, except to the extent it is entitled to exemption. TM The separate legal existence of a corporation has advantages and disadvantages. One advantage is perpetual life. Unlike a sole proprietorship or a partnership, a corporation does not automatically terminate on the death of one or all of the owners.a9 Another advantage is limited liability. Whereas sole proprietors and general partners remain completely liable for all the acts and debts of their respective businesses, the investors in a corporation (with certain exceptions relevant to the professional corporations discussed subsequently) have limited personal liability. Whereas the corporation follows the corporate formalities required by state law and by its own articles of incorporation and bylaws, the investor's personal liability for corporate debts or acts is generally limited to their investment equity and distributions m a d e to them in certain circumstances. The corporation itself is liable to the full extent of its resources, but the personal assets of its investors cannot be reached, except in u n u s u a l circumstances, z° The investors in a corporation may be exposed to unlimited personal liability for the debts and acts of the corporation if they use the corporation to further their own ends rather than those of the corporation, or ff they disregard corporate formalities and commingle their assets with those of the corporation so that the corporation is merely the alter ego of the investors. In such cases, courts may hold the investors individually liable for corporate debts and acts, using a doctrine c o m m o n l y known as Upiercing the corporate veil. "z~ Incorporation also does not protect investors from personal tort liability, even if committed in furtherance of the corporation's activities. A major disadvantage of a corporation's existence as a separate legal entity is double taxation. Unless the corporation has been granted exemption from federal and state income taxes because of its charitable purposes or has m a d e certain elections under the Internal Revenue Code, it m u s t pay taxes on all of its income a n d has fewer allowable deductions. The after-tax income of a for-profit corporation may be distributed to its investors (i.e., shareholders), usually in the form of dividends. The shareholders are then taxed on that dividend in-' c o m e .22 One consequence of the statutory genus of cor155

potations is that, unlike natural persons, they have only those powers granted by the state or corporate charter a n d bylaws. Under the doctrine of ultra vires, corporations are prevented from engaging in any actions or activities beyond those powers. Nevertheless, considering the broad powers typically granted to corporations, including those necessarily implied for carrying out their stated purposes, the restrictive effect of the ultra vires doctrine is minimized. Today the doctrine is particularly important to nonprofit corporations 2a and to governmental z4 and quasi-governmental institutions.ZS THE PROFESSIONAL CORPORATION

approval of PCs by the IRS has considerably weakened the appeal of such associations, especially because for corporate tax purposes, professional associations are subject to stricter scrutiny by the IRS than are PCs. In a PC only licensed practitioners in the field can be shareholders. In most states the shareholders in a medical PC m u s t also be active in the firms' practice. This eliminates the lay influence concern and ameliorates to some extent the divided loyalty and commercialization concerns. PCs are governed by three sets of laws and regulations. The first is the set of laws authorizing the formation of PC, such as the Illinois Medical Corporation Act. al The second set of statutes and regulations is those governing the individual professions. The incorporation of a certain professional is controlled by statute, and the licensing boards and agencies governing particular professions sometimes promulgate miles regulating the corporate name, articles of incorporation, or other aspects of the practice of the professions in corporate form. Third, to the extent that they do not conflict with the PC laws, the general business corporation laws of the state govern PCs.

A professional corporation (PC), although similar to a business corporation, is a distinctly different entity. It is restricted to no more than one profession using the same PC, unless all shareholders are similarly licensed, a n d the existence of the PC does not abolish or restrict personal liability for a radiologist's own negligence or the negligence of those u n d e r the physician's direct supervision and control.26 The PC is useful to ensure the continuity of a professional firm in the event of the death or resignation of a shareholder a n d to repurchase the shares of deceased shareholders from their estates. The PC laws are designed to permit professional THE LIMITED LIABILITY COMPANY practitioners who otherwise would practice in the traditional proprietorship or partnership forms to Limited Liability C o m p a n y (LLC) is a n o t h e r busibecome employees of their own corporations and ness entity growing in popularity. An LLC is a nonthus attain the federal income tax benefits available corporate business that provides its members with to corporate employees generally,z~ Under the In- limited liability and allows them to participate acternal Revenue Code, corporations and their share- tively in the entity's management. This structure holders are treated as separate entities for tax pur- has two important aspects. First, LLCs generally are poses, whereas partnerships and their owners are not subject to restrictions as to finance a n d mannot. Shareholders of corporations are taxed only on agement that historically have b o u n d corporations. income they receive from the corporation in the Second, LLCs are designated to avoid two-tier corform of dividends or salary. In a partnership, each porate tax treatment. Because LLCs always contain partner is taxed on his share of the business in- the corporate characteristic of limited liability, it come, w h e t h e r this income was distributed to him follows that LLCs m u s t avoid at least two of the or not. za Corporations can deduct p r e m i u m pay- other three characteristics that distinguish corpoments for an employee's medical, life, accident, and rations and partnerships for tax purposes: free health insurance plans from the corporation's transferability of ownership interests, continuity of gross income, and the payments are not included life, a n d centralized management. in the employee's gross income. 29 These income tax In 1977 Wyoming enacted the first domestic LLC advantages include group term insurance, medical, statute, a2 Based on the Wyoming Statute, the IRS health, a n d accident plans, and disability income decided w h e t h e r the LLC was an association or plans.a° partnership for taxation purposes. 3a The IRS conBefore PCs were treated for tax purposes as cor- sidered the characteristics of a corporation u n d e r porations by the Internal Revenue Service (IRS), the tax law a n d applied them to the Wyoming LLC. some benefits of incorporation were attained in If the entity fulfilled most of the characteristics of a m a n y states by professional association laws or corporation, it would be taxed as such. However, partnership association laws. Although these laws the IRS concluded that an LLC's limited liability are still in effect, the adoption of PC laws and the provisions alone did not meet the requisite char146

Curr Probl Diagn Radiol, July/August 1995

acteristics of a corporation; therefore the Wyoming LLC was taxed as a partnership. The LLC business form is now available in several states, including Colorado, Florida, Kansas, Michigan, Nevada, Texas, Utah, Virginia, and Wyoming. However, no uniform statute sets the norm for this form of business entity. Each state has created specific n u a n c e s for the creation of an LLC, a n d each state statute must be carefully reviewed before setting up this business form. Still, a few generalities applicable to most LLCs m a y be made. An LLC is o w n e d by ~members" instead of shareholders or partners. It is created by filing with a central state authority "articles of organization/ which resemble a certificate of limited partnership. The operation of an LLC is governed by an "operating agreement" that resembles a partnership agreement a n d corporate bylaws. An LLC is managed by designated managers (who need not be members) or by the members of the LLC who reserve the right to manage. Members who actively manage the organization do so without undertaking the risk of personal liability for the company's debts. An LLC is similar to a partnership in that a member is entitled to receive distributions from the c o m p a n y before the member's withdrawal a n d before dissolution. The member, subject to any restrictions in the company's operating agreement and other limitations in the LLC, may receive his or her draw or share. The individual members are separate a n d distinct from the LLC similar to a partner in a partnership. One of the primary functions of the LLC is to provide an alternative to the corporate form in obtaining limited liability. Whereas in partnerships, partners are generally liable for the debts of the partnership, the LLC limits the liability of members and managers. It also follows that LLCs inherently limit the protection afforded to creditors. To ensure that creditors are afforded the protection of disclosure, distributions, a n d dissolution information, m a n y states have specifically stated that LLC members may not agree to waive these rules. Most LLC statutes provide for m a n a g e m e n t directly by members, although some statutes allow the parties to provide, by agreement, for centralized management. LLCs differ from limited partnerships in the important respect that LLC members do not lose their limited liability by participating in the LLC management. An important development (not directly addressed by the earliest LLC statutes) is the practice of a profession through an LLC form. An LLC may limit the liability for the negligence of others in the Curt Prob! Diagn Badioi, July/August1995

same practice group, while avoiding the tax disadvantages of operating in a corporate form. Utah and Kansas have provisions in their LLC statutes specifically allowing professionals to practice as LLCs,34'35 whereas Virginia expressly prohibits such practice. 3s Therefore it is critical to check the state statute where the radiologist may seek to set up such a business form. Additionally, the mere enactment of a statute allowing professionals to practice as LLCs would not be sufficient without approval of the agency regulating that profession. This process may become more complex if Congress and federal regulatory agencies continue trying to ensure accountability of professionals. Thus for professionals appropriately to use this form of business entity, the profession's regulators must approve this form of entity. Recently m a n y professionals have chosen to set up LLCs to c o n d u c t their business affairs. An LLC is appealing because its main purpose is to guarantee that its members and those running the

One of the primary functions o f the LLC is to provide an alternative to the corporate form in obtaining limited liability. business are not personally liable for the company's obligations, while securing the same federal tax treatment as partnerships. The LLC allows its members flexibility in designing the company's internal organization and procedures so that the c o m p a n y will not be treated as a corporation for tax purposes. If properly structured, an LLC will be treated as a pass-through entity for federal income tax purposes, s7 Pass-through entities are not subject to federal income tax at the entity level, unlike a corporation. Many more states will adopt LLC statues. Tax regulation probably will continue to favor the LLC because there does not appear to be any powerful interest group injured by this regulation. 38 The combinations of limited liability with partnership tax treatment provide sufficient pressure on legislators to continue to pass statutes allowing such entities. These entities are quite attractive to radiologists, especially if the feature of limited liability is extended to protect against the negligence of other physicians in the practice group. Accordingly, the radiologist s h o u l d seriously consider this 1~7

form of business w h e n establishing his or her practice group.

BUSINESS PRACTICES OF RADIOLOGISTS

The law affects the practice of radiology in ways that influence most business decisions radiologists make. Those that most often result in litigation relate to e m p l o y m e n t as a radiologist, hospital privileges, and p a y m e n t for services. Recent developments in health care, ranging from brokered radiology services a n d teleradiology to m a n a g e d care, mergers, acquisitions, a n d a changing practice environment, require radiologists to become familiar with aspects of the law that substantially modify the freedom of choice in business decisions. We attempt to discuss some of the relevant laws involved, with the caveat that if a radiologist envisions a problem in this sphere, he or she should consult with personal legal counsel. Due ]~rocess in E m p l o y m e n t The due process concept derives from the Fifth and the Fourteenth A m e n d m e n t s of the Constitution. The Fifth A m e n d m e n t states "no person shall . . . be derived of life, liberty or property without due p r o c e s s of law . . . . ~ The Fourteenth A m e n d m e n t states, "all persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or arr/enities of citizens of the United States; nor shall any state deprive any person of life, liberty or property, without due process of law; nor d e n y any person within its jurisdiction the equal protection of the laws." The d u e process is a guarantee of "a fair trial." That is the most important facet of the overall concept. The essence of due process has been interpreted to be that any individual that has been adversely affected by enforcement of rules or laws has the right to be notified before the action is taken a n d have his or her positions heard before conclusion of the proceedings. A classic example of the due process enforcement, relevant to employment, is the case of The Board o f Regents v Raw. aa In this a case, a university faculty m e m b e r h a d been hired for an academic year, but he had no tenure rights to continue employment. He was, in fact, not retained. He challenged that his nonretention, without notice of hearing, violated his procedural due process rights. He stated that the actual reason for not being rehired involved a violation of its First A m e n d m e n t right of free expression. The university took the position that not retaining

158

a n o n t e n u r e d faculty member, after expiration of his contract terms of employment, was an "unfettered discretion" of university officials. The court noted at the onset that ~the only question presented to us at this stage . . . is w h e t h e r the res p o n d e n t h a d a constitutional right to a statement of reasons a n d a hearing on the university's decision not to rehire him for a n o t h e r year." The court found in favor of the university, but specifically said "where a person's good name, reputation, h o n o r or integrity, is at stake because of what the governm e n t is doing to him, notice and opportunity to be heard are essential. ~ Due process issues are infrequently invoked by private citizens unless there is a state relationship. But the concept of being treated fairly a n d with an opportunity to express one's views is important to the enforcement of any rules and should be kept in m i n d w h e n a radiology group potentially disenfranchises one of its partners or employees. If one is in a group that has some state relationship, an individual who is adversely affected by the group decisions may have a due process challenge to the decision. This problem usually can be avoided by giving any employee who is to be adversely affected by a group decision the opportunity to be heard after being properly notified that an adverse decision is being contemplated. This law relates to the general society value requiring fair treatment of employees. T h e Right to Practice Radiology There are m a n y limitations on the right to practice radiology. The requirement of a valid medical license and, in m a n y instances, of a valid board certificate are well recognized by most radiologists. Limitations on pricing of services, h o w to practice, and where one m a y practice often are not appreciated or understood. Practice mergers and brokered services bring with them the obligations of the Clayton and Robinson-Patman Acts. These laws make certain forms of price discrimination illegal. Price discrimination is found w h e n a seller charges one purchaser a higher price for like goods than was charged one or more of the purchaser's competitors. This concept goes back to 1948 in the case of Federal Trade C o m m i s s i o n v M o r t o n Salt. 4° These laws may be applicable to differential pricing for radiologic services w h e n two companies compete for the radiologic services from e m p l o y m e n t benefit offices that maintain direct contracts. Section 3 of the Robinson-Patman Act makes it a crime to sell goods at unreasonably low prices for purpose of destroying competition or eliminating a competitor. 41 Section 2(a) of the Clayton Act, as a m e n d e d by the Robinson-Patman Act, forbids Curr Probl Diagn Radiol, July/August1995

price discrimination where the effect may be substantially to lessen competition or tend to create m o n o p o l y ~in any line of commerce." Predatory pricing b e c o m e s a concern for radiologists as external forces set charges below cost to eliminate competition. Hospital Privileges There has been m u c h litigation involving the hospital privileges of radiologists. Two legal issues dominate the recorded cases. These are based on the tort of unlawful interference with a business contract and the antitrust implications of anticompetitive behavior. The tort o f unlawful interference with a business contract occurs w h e n a third person interferes with a contract that a radiologist had with a hospital, resulting in the restriction or loss of privileges. The interference with physician relationship requires that it come from s o m e o n e other than the hospital itself.42.43 This law is a basis for restricting radiology services to a radiology group. In Blank v Palo Alto-Stanford Hospital, 44 plaintiff physicians failed to prove their relationship with the hospital was interfered with by defendant radiologists. The court agreed that the hospital decision to operate its radiology facility on a "closed staff" basis was made in the best interest of patient care. They found that the operation of the radiology facility w o u l d be more efficient if restricted to one certain group of radiologists. Antitrust Law An appreciation of antitrust law is becoming increasingly important to the business of medical practice. The United States Congress has passed several statutes to protect and foster the competitive process in the American economy. This began with the Sherman Act of 1890 and has subsequently been followed by a series of acts that increasingly apply more expansive implications to protect the competitive process. Whereas most other laws are of a narrow scope, antitrust law is similar to constitutional law in its broad scope. Antitrust law affects most economic activity in this country, which includes almost every transaction not specifically left out. Although only a limited n u m b e r of people do things that violate antitrust law, all people engage in economic transactions that are directly affected by the application of antitrust law. In 1955 the U.S. attorney general defined the o~jectives of antitrust law as the promotion of competition in open markets. The attorney general stated, "Most Americans have long recognized that opportunity for market access and fostering of market rivalry are Curr Probl Diasn Badiol, July/August 1995

basic tenets of o u r faith in competition as a form of economic organization." Antitrust law has two practical objectives: (1) to eliminate noncompeting c o n d u c t and (2) to prevent market structures that unduly restrict competition. Furthermore, there is a widely held belief of judges and legal scholars that additional antitrust statutes have been passed for the p u r p o s e of controlling the concentration of economic p o w e r as a political or social goal. These opinions have been shared in U.S. Supreme Court interpretation in a n u m b e r of cases, the most notable being Northern Pacific Railway v U.S. (1958), and Brown Shoe v U.S. (1962). 3 In those instances, Justice Black in Northern Pacific and Chief Justice Warren in Brown Shoe viewed the antitrust laws as designed to preserve and enhance the position of smaller competitors and thereby sanctioned the application of antitrust law to mergers or vertical agreement situations to preserve the existence of freedom of action to smaller firms. On September 15, 1993, the Department of Justice and the Federal Trade Commission published six statements of their antitrust enforcement policies

An appreciation of antitrust law is becoming increasingly important to the business of medical practice. regarding mergers and various joint activities in the health care area. Four of those statements are applicable to the practice of radiology. They include Statement 2, "Hospital joint ventures involving hightechnology or other expensive medical equipment; physicians' provision of information to purchasers of health care services"; Statement 3, "Physicians' provision of information to purchasers of health care services"; Statement 4, UHospital participation in exchanges of price and cost information"; and Statement 5, "Joint purchasing arrangements among health care p r o v i d e r s ; . . , physician network joint ventures." The U.S. Attorney General stated these policy statements are designed to provide education and instruction to the health care community in a time o f tremendous change, and to resolve, as completely as possible, the problem o f antitrust uncertainty that s o m e have said may deter mergers or joint ventures that would lower health care. The Agencies have never challenged a joint venture among hospitals to purchase, operate and market hightechnology or other expensive medical equipment. Agencies 1~9

will not challenge any joint venture if the joint venture includes only the number of hospitals whose participation is needed to support the equipment, absent extraordinary circumstances.

A joint venture that includes additional hospitals will not be challenged ff the additional hospitals could not s u p p o r t the equipment on their own or through the formation of a competing joint venture, absent extraordinary circumstances. If the same two hospitals entered a joint venture with a third hospital that independently could have purchased, operated, and marketed magnetic resonance imaging (MRI) e q u i p m e n t in a financially viable manner, the joint venture w o u l d not be in this antitrust safety zone. However, if none of the three hospitals could have s u p p o r t e d an MRI by itself, the agencies w o u l d not challenge the joint venture. The agencies will apply a Urule of reason" analysis in their antitrust review of such joint ventures. This statement assumes that the joint venture is not likely merely to restrict competition and decrease output. For example, two hospitals that ind e p e n d e n t l y operate profitable MRI s e ~ i c e s could not avoid charges of price fixing by labeling as a joint venture their plan to obtain higher prices through joint marketing of their existing MRI services. The objective of this analysis is to determine w h e t h e r the joint venture may reduce competition substantially, and if it might, w h e t h e r it is likely to p r o d u c e procompetitive efficiencies that outweigh its anticompetitive potential.

Certificate o f Need.--Boulware v Nevada Departm e n ( o f Human Resources 45 discussed the use of UCertificate of Need" litigation as an anticompetitive device. In Boulware, the plaintiff alleged that the defendants' suit was Uundertaken solely to interfere with free competition and without the legitimate expectation that such efforts (would) in fact induce lawful government action. ~ However, the NoerrPennington Doctrine exempts ~private efforts to influence governmental bodies or courts, even for anticompetitive purposes. ~ To win his claim, the plaintiff had to s h o w that the defendants' state court action was a s h a m - - t h a t the litigation was an attempt to use government processes ~as opp o s e d to the o u t c o m e of that process, as an anticompetitive weapon." The defendants argued that their initial success in the trial court was irrefutable evidence of the validity of their claim. Defendants could have plausibly argued that construction of Ua $1,500,000 piece of experimental equipment . . . in an adjacent, specially designed building' w o u l d arguably make the plaintiffs office more than just a physician's office. The court found no 160

evidence that the defendants intended to prevent the plaintiff from competing against them by the mere maintenance of a lawsuit. The Ninth Circuit held that a hospital bringing unsuccessful state court action to enforce Certificate of Need regulations was protected from antitrust liability. This decision may allow large, economically powerful health care providers to use unsuccessful, albeit not unfounded, lawsuits against smaller professionais to diminish competition by forcing the competitor into bankruptcy.

Physician Networks and Joint Ventures.--Another issue n o w affecting radiologic practice is the increase in physician networks and joint ventures. The U.S. Attorney General's September 15, 1994, statement clarifies the limits of legality to the formation of physician networks and joint ventures. Examples of physician network joint ventures that the agencies w o u l d not challenge include (1) physician network joint venture comprising more than 20% of physicians with active staff privileges at a hospital, and (2) physician network joint venture with a large market share in a relatively small community. UThe creation of provider networks poses not only price-fixing risks, but also antitrust risks associated with decisions to include or exclude providers from the network. On the other hand, excluding providers from the network can give rise to a group-boycott claims." Under certain circumstances, an overinclusive provider network may prevent the formation of a competing alternative delivery system. The courts have generally found no antitrust violation w h e r e there are legitimate reasons for exclusions. 4e For example, in Capital Imaging Associates, PC, v Mohawk Valley Medical Associates, 47 the refusal of an i n d e p e n d e n t physicians association and health-maintenance organization (HMO) to contract with a radiology group was not an illegal group boycott. The Second Circuit found no illegal group boycott u n d e r the rule of reason because the HMO, which enrolled only 2.3% of all HMO enrollees and which contracted with only 6.75% of all physicians in the market, had no /narket p o w e r and therefore no capacity to harm competition. Price Fixing.--Independent of h o w the network is structured, and w h e t h e r or not it has legitimate objectives, participating providers m a y expose themselves to antitrust liability ff they engage in price fixing or other arrangements relating to matters b e y o n d the scope of the network's limited operations. To minimize the risk of price fixing outCurt Probl Diagn Radiol, July/AuS~st 1995

side the limited context of the network, care should be taken to ensure that the exchange of sensitive pricing and market share information is limited to the extent possible. There is an antitrust safety zone in which a network comprises 20% or fewer of the physicians in each specialty area with active hospital staff privileges who practice in the relevant geographic market, ff the physicians share substantial financial risk. The guidelines indicate that, w h e n there is an agreement to provide services to a health-insurance plan at a "capitated" rate, the arrangement likely will be found to involve "substantial risk sharing." When the network provides financial incentives for its m e m b e r to achieve cost-containment goals, such as withholding at least 20% of the compensation due to members, with distribution of that a m o u n t only if the cost-containment goals are met, the arrangement will be found to involve "substantial risk sharing." If a network wishes to establisl~ its own physician fee schedule, it must employ a n u m b e r of safeguards. It has been suggested that any survey of physicians used to develop the fee schedule should be c o n d u c t e d on a confidential basis by an indep e n d e n t consulting or accounting firm, and the results of this survey should not be shared with the physicians. The fee schedule itself should be developed by an i n d e p e n d e n t consultant, a n d any input from physicians b e y o n d the survey should be obtained from n o n c o m p e t i n g specialists. One must be especially concerned about the prospects for spillover collusion. All members of the network must u n d e r s t a n d that informal or oral agreements are sufficient grbunds to establish an antitrust violation. Agreement by competing providers on prices to be charged payers or patients that are not covered by the network contract m a y be found to constitute illegal price fixing. Agreements by competing providers not to deal with specific payors can expose the providers to boycott claims. Agreements not to compete in specific services or in specific geographic areas can expose physicians to marketdivision claims. Finally, "since federal a n d state authorities are devoting considerable resources to enforcement of antitrust violations in the healthcare areas, the risks involved in such activities are likely to keep pace with the market pressure to engage in them." One recent case warrants consideration because it represents the u n u s u a l situation in which a radiologist was successful in litigation against a hospital that removed his privileges. In a recent Georgia Superior Court case, a radiologist was awarded

CurrProblDiagnRadiol,July/August1995

$12.7 million in a suit against the hospital that terminated his privileges. Most litigation involving a denial of hospital privileges has not been decided in favor of the plaintiffs. In this case the radiologist, who h a d been the chairman of the department, began having problems with the hospital w h e n a group of four neurologists asked for privileges to interpret scans done in the n e w MRI scanner purchased by the hospital. Hospital officials sought to grant those privileges. The radiologist found that

If a network wishes to establish its own physican fee schedule, it m u s t employ a n u m b e r o f safeguards. was "self-referral, resulting in overutilization and decreased quality of care, and was in violation of the medical staff bylaws that said to have privileges in a radiology d e p m i m e n t you h a d to be a radiologist? The radiology chairman refused to grant the privileges, a n d the hospital filed a suit asking the court for permission to get rid of the radiologist and his three associates without due process. Without getting a decision from the court, the hospital terminated his privileges 21 m o n t h s later. The radiologist's lawsuit claimed that the hospital h a d violated its medical staff bylaws in terminating its privileges. He argued that u n d e r Georgia law, the hospital must give the physician notice, a hearing, and an appeal before he is terminated, "because w h e n y o u terminate a doctor's privileges y o u ruin him." This radiologist had practiced at that hospital for more than 22 years. Many of these factors may have gone into finding on behalf of the radiologist in this case. Because it is a very recent case, it suggests that there may be some opportunity for radiologists to seek redress w h e n they are so adversely affected.

The Liability o f Limiting Diagnostic Procedures in Managed Care Plans In Elsesser v Hospital of the Philadelphia College of Osteopathic Medicine, 4~ the court found both the physician a n d the HMO liable for malpractice based on the physician's compliance with the HMO's utilization decision. In this case the physician ordered a Holter monitor tracing, but the HMO informed the physician the tests would not be covered, a n d the tracing was discontinued. The patient 161

did have a myocardial infarction. The court found the physician negligent for not providing the necessary care. In an examl;$1e published in Medical Legal Lessons, April 1994, a c o m p u t e d tomography (CT) scan was ordered by the referring physician but was refused twice by the committee. The patient later was found to have a low-grade malignancy necessitating resection. The opinion is that if the patient sues, the physician and the HMO will be liable. 49 Patient-Care Guidelines Obviously, radiologists may have an increasing responsibility to ensure the p r o p e r p r o c e d u r e is performed as the courts redefine the radiologist's d u t y to the patient. Some jurisdictions protect physicians from liability in formulating guidelines for managed care. Radiologists should be involved in establishing the standards for diagnostic algorithms involving radiologic procedures, but prudent radiologists will be aware of the legal implications of their involvement in this process. An argum e n t supporting using patient-care guidelines established by input from knowledgeable experts relates to the implications of gatekeeping m a n a g e d care without established guidelines. Some managed-care programs emphasize cost containm e n t by gatekeepers without such guidelines for care. If gatekeepers share the risk, they m a y increase income by doing fewer procedures. Their best protection against legal liability emanating from efforts to control the use of procedures may be adherence to guidelines established by experts seeking the interest of the patient. Prospective development of guidelines for care seems preferable to what appear to be more arbitrary decisions made in an effort to contain cost after the patient is seen with a potentially cosily problem. A June 1994 American Medical Association (AMA) meeting dealt with insurance companies in Illinois that recently informed physicians to either abide by guidelines or be d r o p p e d by the Blue Shield plan. The AMA established as policy that "ff third party payors require physicians to follow specific practice guidelines as a condition of participation in their plans, they should accept the liability." An additional report from the AMA Council on Medical Services observed that the Illinois Blues and other insurers have "reviewed, modified and implem e n t e d practice parameters without inputs from the affected physicians or relevant physicians organizations." This occurred despite research findings that clinician involvement is the key to successful guideline implementation. The AMA and others are manifesting concern about payors' at162

tempts to install guideline programs without physician involvement and endorsement. It is important that radiologists actively participate during guideline development. A second issue related to guideline use has been observed in Maine, w h e r e there is an e n h a n c e d immunity for malpractice litigation as long as physicians use established guidelines. The Maine guidelines are established by physicians before the patient e n c o u n t e r and set the standard for what physicians believe is appropriate care. This is preferable to having the standard of care set by a jury through a contest of expert testimony in litigation. Thus the Maine legislature has provided some immunity for physicians w h o practice according to the established guidelines. So long as the guidelines are followed, it is p r e s u m e d that the physician is practicing to the standard of care set by the physicians in the community. Quality Assurance, Communications, a n d Teleradiology In legal terms, anyone w h o offers for sale the service of diagnostic radiology enters the stream of commerce. As is anyone else in commerce, radiologists are obliged to p r o d u c e a p r o d u c t of sufficient quality to accomplish the p u r p o s e for which the p r o d u c t is intended. The p r o d u c t p r o d u c e d by radiologists is information. This information should have the capacity to benefit a patient. In diagnostic radiology this information is usually derived from an image. Historically, most quality assurance in radiology was directed at producing an adequate image. There is no question that the lack of a quality image has often been the subject of litigation. However, the responsibility of radiologists does not end with the production of an image. The image must be interpreted. Observations must be made. Judgments about the significance of the findings are the responsibility of radiologists. Quality assurance programs in radiology are adding observerperformance studies to the traditional physical m e a s u r e m e n t s of machine performance and image quality. Many radiology practices are analyzing receiving operating characteristic (ROC) curve data about the performance of their radiologists. Some radiologists interpret films conservatively, whereas others m a y miss more lesions. The more conservative radiologists m a y overcall to the extent of finding suspicion of an abnormality where none exists. All such judgments are prone to error. ROC curves reveal w h e t h e r the individual radiologist is prone to type I or type II errors. Type I errors occur w h e n a lesion is missed. Type II errors occur w h e n a lesion is found w h e r e none exists. Most radiologists Curr Probl Diagn Pmdiol,July/August1995

have a dominant m o d e of practice, which, if known, m a y be modified toward the optimal. Thus the use of ROC analysis in radiology quality assurance programs may improve the quality of radiologic services. The diagnostic radiologist does not have the d u t y to be error free in the interpretation of radiographs. It is an unrealistic expectation. Rather, the radiologist is held to a standard of practice akin to the standard practiced by a reasonably p r u d e n t and responsible radiologist practicing u n d e r the same or similar circumstances.

Quality Assurance Measures.-- Quality assurance measures are a standard of radiologic services. Most emphasis has been directed to image quality and studies on observer performance and interpretation. Recent litigation involving radiology practice often revolves about the quality of the information received by the attending physician. A written radiology report that appears designed to obfuscate is not an adequate defense to either a type I or a type II error. Clear, succinct radiologic reports are the best for patient care and are the best practice if the report is eventually to be read in court. Current quality assurance programs should monitor the quality of writing style and readability of the radiologic report. If necessary, radiologists should also be able to demonstrate in court a standard business practice that will reasonably ensure that the report will reach the physician for w h o m it is intended. A perceived deficiency in the chain of communication b e t w e e n radiologists and referring physicians has caused current efforts to change the duty of the radiologist regarding physician-patient relationship. This concern was also responsible for the recent preliminary HCFA rulings mandating that radiologists supply patients with m a m m o g r a m reports the patients can understand. Quality assurance programs should include assurances that the report generated will be available to benefit the patient. Legal

Implications

of

Telecommunications.

- - W i t h m o d e r n telecommunication tools, there are additional legal implications involved with the c o m m u n i c a t i o n of images and radiologic reporting systems. The medical-legal committee of the Radio° logical Society of North America presented a program on the legal aspects of telecommunication in radiology at their annual meeting in December 1993. We review some relevant issues that were raised and discussed. The American College of Radiology has drafted technical standards for teleradiology that will tell what type of e q u i p m e n t should be u s e d in different modalities and in certain conditions. Although Curr Probl Diagn Radiol, July/August 1995

standards may help, they will not be sufficient.to protect against legal liability ff the equipment does not p r o d u c e the p r o p e r image. The major concern of teleradiologists is supervision and quality assurance. It is up to the radiologists to make the interpretations to be sure that they have adequate information. One w a y to assess the safety of the equipment is for the radiologists to ask themselves w h e t h e r they can make the same diagnosis on the teleradiology system as they w o u l d in plain films. Radiologists n e e d to take great pains in communicating any

The radiologist is held to a standard o f practice akin to the standard practiced by a reasonably prudent and responsible radiologist practicing under the same or similar circumstances. uncertainty they have about the image because the process of communication with referring physicians is complicated by teleradiology.

Teleradiology lssues.--Other legal issues are raised by the advent of teleradiology. In those practices reading examinations done in different states, the issue of licensing b e c o m e s relevant. Where is the medical service delivered, in the state where the examination was taken or the state where it was read? By state law, radiologists interpreting images from California need to be licensed in that state. Many radiologists are licensed in every state where the films are taken, even though the radiologist reads the films only in his or her h o m e state. Indeed, one radiologist from California was quoted as stating he has a license in all 48 contiguous states because he does teleradiology across the country. The legal requirements on this issue have not been addressed in all jurisdictions. Kansas recently became the first state to require all radiologists reading films from that state to be licensed in Kansas, no matter w h e r e the films are read. The American College of Radiology's draft guidelines suggest teleradiologists obtain staff privileges at all the hospitals where the films are made. However, the problems with hospital bylaws requiring 163

attendance at meetings and so on should be addressed if the radiologist responsible for the film interpretation resides a long distance from where the films were taken. Special considerations should be made. Finally, the issue of malpractice brought in one state may not cover teleradiologic services performed on images from other states. This area of law remains to be developed. This development will take the form of statutes p a s s e d in some states, such as Kansas, and in other states, it may be left to the court to resolve the conflicts that will inevitably develop. If radiologists have a concern about the prospective legal problems with teleradiology, they should proactively influence legislation to address the issues. MEDICAL MALPRACTICE LAW F O R RADIOLOGISTS: RADIOLOGY MALPRACTICE AND THE LAW BACKGROUND PERSPECTIVE

Every radiologist, no matter h o w careful and conservative he or she might be, or w h e t h e r he or she has done anything wrong, may easily b e c o m e involved in a medical malpractice lawsuit. Each radiograph that is read and interpreted may be the subject of a different interpretation or "second guessir)g." Failure to ~see" what is later determined to be a suspicious area, failure to view the UcoI'recC area, or failure to use the "proper" technique or equipment are all possible subjects for a lawsuit. Indeed, failure to inform the patient about what was found on a chest radiograph has resulted in successful litigation against a radiologist. Even the actions of a technician or other support person over w h o m the radiologist has only limited, if any, control may involve him or her in litigation. Moreover, the increasing use of interventional procedures is causing radiologists to b e c o m e embroiled in malpractice claims with even greater frequency. This is especially true in angiography. Although the development of less invasive imaging techniques, such as MR angiography, have r e d u c e d the amount of diagnostic angiography, radiologists are increasingly being called on to b e c o m e involved in therapeutic modalities. Percutaneous angioplasty to dilate arterial stenosis, procedures for transhepatic c o m m o n duct stone removal, angiography to evaluate different types of stenotic blood vessel lesions, and internal and external drainage and dilatation of stenoses in the biliary and urinary tract strictures, as well as angiography in the thrombosis and thrombolysis of arteries, are among the m a n y procedures that today take radiologists 164

out from behind what has been the partially protective curtain of noninterventional distance found in the traditional radiologist-patient relationship. High-tech tools and rapidly developing procedures give them a more active "surgical" role. They are no longer just the "eyes with which to see"; they have n o w b e c o m e the "hands with which to fix." With this a d d e d dimension comes exposure to types of claims from which they have historically been shielded. The magnitude of the malpractice problem for radiologists may be appreciated from the Physicians Insurance Association data of 102,000 claims. All malpractice claims begin with a patient w h o perceives an injury. Once an injury is perceived, the patient seeks legal advice, and it is important to appreciate that most cases do not result in ultimate litigation. Indeed, Huycke and Huycke s° studied patients, calling plaintiffs attorneys by doing telep h o n e interviews to six law offices in five states (Table 1). This increased exposure to potential malpractice claims makes it important for radiologists to become more informed about the legal risks involved in their practice so that they will be better able to implement procedures to minimize them. W H A T IS MEDICAL MALPRACTICE?

Medical malpractice law is a system for ascribing responsibility to health-care providers for injuries caused to patients by medical professionals. It requires that for a physician to be found liable to a patient for malpractice, the actions of the physician must fit within one of the following theories of liability: (1) breach of contract, (2) negligence, (3) informed consent, or (4) vicarious liability. Although the vast majority of malpractice cases against radiologists are brought u n d e r negligence and informed-consent theories of tort law, each of these types of liability is discussed below. BREACH OF CONTRACT

Under a breach of contract theory of liability, the physician must enter into an implied or explicit contract with the patient w h e r e b y he promises to do something more than the law generally requires, which is to exercise the requisite degree of care in treatment of the patient. He m u s t agree to p r o d u c e a specific therapeutic result, employ a specific technique, perform specific services for the patient, and so on. Obviously, most physicians n o w know they should never guarantee specific results and w o u l d seldom get themselves into a situation in Curr Probi Diagn Radiol, July/August 1995

which this could be claimed. Moreover, the court., (and m a n y legislatures) have given the physician additional protection from the patient fraudulently claiming that the physician m a d e such a promise, by requiring that any such agreement be in writing. However, if the physician does make a promise, the physician's responsibility is extended to include the specific performance of that promise. This often results in a situation in which the timeh o n o r e d maxim (that liability cannot be based solely on the fact that the treatment was unsuccessful) will not prevent him from being held responsible for any injury or damage the patient might sustain, despite any fault on the part of the physician. For instance, if the physician promises a specific therapeutic result, the physician may be required to achieve that result, notwithstanding the uncertainties that attend the practice of medicine.

NEGLIGENCE Instead of defining the physician-patient relationship on the more narrow basis of a contract or agreement b e t w e e n the parties, this theory (which is the p r e d o m i n a n t one used in most malpractice actions today) grounds that relationship on the broad undertaking by the health care provider to perform medical services (i.e., the physician may be held liable for his actions merely b e c a u s e he undertakes to treat the patient). To recover damages u n d e r this theory, four basic elements must be established: (1) that the physician o w e d a duty of care to the patient, (2) that the physician violated or breached the standard of care or practice, (3) that the patient was damaged, and (4) that the damage was caused by the physician's breach of the standard of care. DUTY OF CARE: THE C O N C E P T OF

LEGAL DUTY A radiologist's legal duties are being constantly refined. The major application of the concept of legal duty occurs in the tort of medical malpractice. Courts continuously refine the definition of duty, and as may be seen in the Daly case, they occasionally find n e w duties in response to what they see as a change in society's view or social values. Duty has been defined: UDuty is a question of w h e t h e r the relationship b e t w e e n the actor and the injured person gives rise to any legal obligation on the actor's part for the benefit of the injured person. "51 In addition, for a duty to occur the injury must be foreseeable by the defendant. 5z For the defendant Curr Probi Diagn Radiol, July/August 1995

to have a legally enforceable duty, the plaintiff must s h o w (1) that a dangerous condition existed, (2) that the defendant created or was responsible for that condition, and (3) that the defendant either actually or constructively knew of the dangerous condition. The court establishes law w h e n it interprets codified statutes. For example, an issue recently arose regarding an interpretation of the statute controlling Michigan law on the statute of limitations in medical malpractice cases. In 1988, while pursuing a workers' compensation claim, the plaintiffs attorney discovered an incident in hospital records, dating back to 1963, which caused the plaintiff to lose one eye. s3 The lower courts granted the defendant hospital s u m m a r y deposition 7 because of the statute of limitations. The Michigan Supreme Court stated: the statute of limitations furthers the sound public policy of establishing a time frame beyond which the defendants would not be forced to defend. However, in our quest to fulfill this purpose, we will not allow questionable acts, of which patients are unaware and which are followed by silence, to combine with the passage o f time to bar suit. Our sense o f fair play in providing plaint(ff with a reasonable opportunity to bring suit, along with our conclusion regarding the additional policies underlying the statue o f limitations, compels the holding that the discovery rules govern the accrual date for negligence claims, pursued against hospitals and their agents, which are similar to malpractice.

This discovery rule may b e c o m e a special issue in radiology if old films are frequently available and the plaintiff may have had no opportunity to see them at an earlier date. The clock for the statue of limitations begins running w h e n the plaintiff was or should have been aware of an act of negligence, not w h e n the act itself occurred. These are but a few of the m a n y examples in which decisions in the courts refine and clarify the law that controls the practice of radiology. These types of decisions are being m a d e every day; thus it is necessary for practicing radiologists to employ expert help in keeping up with the changes in the rules and laws that affect the practice of radiology. In using these examples, we are attempting to point out sources of these laws or rules. Radiologists traditionally have h a d little direct, personal contact with patients. Nevertheless, they have been held to owe a duty of care to a patient whenever they undertake to perform radiologic services on behalf of that patient. Radiologists may, therefore, be held ind e p e n d e n t l y responsible for negligent acts, even w h e n there is no direct relationship with the patient. However, liability, in great measure, has been

1~

very limited in scope b e c a u s e radiologists have been able to assert effectively that their role was restricted to the "behind the scenes" reading and interpreting of films. This meant, in most cases, that they could be held accountable only for (1) misreading or misinterpreting films, (2) failure to properly c o m m u n i c a t e findings to the referring physician or patient, (3) failure to perform the appropriate examinations or tests b e c a u s e of an inadequate history obtained from the referring physician or patient, (4) inadequate radiograms because of imp r o p e r technique or malfunctioning or inadequate equipment, and (5) failure of office or hospital systems. Typical examples of fact situations, drawn from actual experiences, which have given rise to these types of claims, follow.

This discovery rule m a y b e c o m e a pecial issue in radiology if old films are frequently available and the plaintiff m a y have had no opportunity to see them at an earlier date. MISREADING OR MISINTERPRETING FILMS Case "History 1

Plaintiff was 15 weeks pregnant w h e n she experienced an episode of vaginal bleeding. After examination in the emergency room, a sonogram was performed, the results of which the defendant radiologist interpreted as normal. At 34 weeks, a second. sonogram was performed, and it revealed that the fetus had hydrocephalus. The baby boy was born with no brain in one hemisphere of the skull and an abnormal brain in the other hemisphere. The plaintiff c o n t e n d e d that the defendant radiologist was negligent in failing to detect the existence of the hydrocephalus in his reading of the first sonogram. She argued that if he had done so and had a follow-up sonogram been ordered before the 26-week cut-off, there could have been a legal abortion. Case History 2

Plaintiff, a 68-year-old woman, alleged that the defendant negligently interpreted her m a m m o grams as being negative for disease. In fact, they s h o w e d the presence of a mass in the plaintiffs 166

right breast, which was ultimately determined to be cancerous. The plaintiff u n d e r w e n t a right modified radical m a s t e c t o m y for infiltrating ductal carcinoma, and 2 of 17 lymph nodes were positive for metastatic disease. The plaintiffs expert testified that if a p r o p e r and timely diagnosis had been made, this cancer w o u l d have been stage I cancer and detection at that time w o u l d have meant a virtual complete recovery and no involvement of the lymph nodes. Case History 3

Plaintiff discovered a hard nonpainful lump in her right breast. She contacted her family physician, w h o noted two l u m p s and referred her to a general surgeon for aspiration of the lumps. The surgeon attempted aspiration and was u n s u c c e s s o rid. He ordered a mammogram, which was read by the defendant radiologist, w h o also examined the areas by ultrasound and improperly c o n c l u d e d that the areas represented benign cysts. The plaintiff later returned to the clinic and again saw the surgeon w h o again noted the lumps, repeated the ultrasound, aspirated the lumps, and obtained no fluid. An excision was performed, which revealed poorly differentiated infiltrating ductal carcinoma. The plaintiff, aged 48, claimed that a biopsy should have been performed earlier and that the radiologist negligently interpreted the ultrasound, which allowed the cancer to progress from stage I to stage III. Case History 4

The plaintiff, aged 53, went to defendant's office for a mammogram. The m a m m o g r a m was allegedly misread, which led to a delay in the diagnosis of breast cancer. The cancer had metastasized at the time of diagnosis, requiring more extensive treatment, including radiation, chemotherapy, and the surgical procedures of a right partial mastectomy and axillary dissection. This treatment was alleged to have been more than w o u l d have been required with an earlier diagnosis. Case History 5

The plaintiff had a chest radiograph that was read as showing normal conditions. Four years later, his cancer was diagnosed. He c o n t e n d e d that t h e beginning of his cancer could be seen on the s u p p o s e d l y normal-appearing radiograph and that if the suspicious lesion had b e e n reported at that time, he w o u l d have had an 85% chance of being cured. At the time of trial, he had 6 months to live. Curr Probl Diagn Radiol, July/August1995

Case History 6 Decedent, a cigarette smoker, began to experience pain in the right side of his chest. Several m o n t h s later, he was no longer able to continue his work as a pipefitter a n d plumber. Chest radiographs were taken a n d forwarded to defendant radiologist, w h o d e t e r m i n e d that there was no abnormality. Radiographs taken a year later revealed a cancerous t u m o r that h a d grown 400%. Size prevented surgical intervention, a n d radiation therapy was only s o m e w h a t successful. The patient died of lung cancer within 6 months. Evidence presented at trial led the court to conclude that h a d the condition been diagnosed a y e a r earlier, the patient might have h a d a 30% chance to live 5 years as o p p o s e d to the 8% chance that he h a d at the time the diagnosis was made. Case History 7 Plaintiff, aged 58, h a d three m a m m o g r a m s performed by defendant radiologists. Thereafter, a cancerous t u m o r became evident during a physical examination. The plaintiff u n d e r w e n t a mastectomy and subsequent chemotherapy. She alleged that defendants did not properly interpret the m a m m o grams and failed to get a second opinion or take additional views. Case History 8 A 57-year-old m a n w h o h a d smoked for 40 years began coughing up blood. A chest radiograph and b r o n c h o s c o p y were both negative. Symptoms progressed, a n d 9 m o n t h s later, a n o t h e r chest radiograph was read as being negative. Terminal adenocarcinoma of the lung was eventually diagnosed, of which he died. The plaintiff c o n t e n d e d that misreading of the second radiograph permitted the cancer to progress from stage I (70% cure rate) to stage IV (incurable). As can be seen from the examples in these cases, a failure to diagnose cancer of the lung or breast is a frequent issue in malpractice litigation involving radiologists. These two problem areas have recently been discussed in the radiologic literature. 54-5s Mitnick et al.57 recently reported on experience in m a m m o g r a p h i c malpractice in the state of New York. They found that most cases of failure to diagnose breast cancer are brought against gynecologists by w o m e n aged 40 to 49. The average age of w o m e n bringing the complaints was 432, years; 75% of the cases occurred in patients y o u n g e r than 50 years. The most c o m m o n suits are by y o u n g w o m e n w h o palpate a lesion. They believe that their gynecologist has the primary responsibility for failure to diagnose breast cancer. These w o m e n Curr Probl Diagn PadioL July/Au~q~st 1995

may have dense breasts on the mammogram, a n d the gynecologist m a y assume that because these w o m e n are young, there is no problem. Women with normal m a m m o g r a m s a n d newly palpable lesions require further evaluation, either fine-needle aspiration, ultrasound, or surgical biopsy. In the s t u d y of Mitnick et al., claims involving m a m m o g r a p h y were the most expensive in terms of awards. Of the 328 closed claims involving mammography, 135 have been paid, and in one claim of failure to c o m m u n i c a t e with a patient, the award paid was $1.6 million. Nearly 50% of all closed claims resulted in i n d e m n i t y payments. The average indemnity paid for the 106 claims in this category was $180,771. Of 34 cases litigated, 32 (94%) were based on the p r e s u m e d delay in diagnosis. Palpable findings were present in 93.7% of the cases. Mammograms either were not obtained (in 16 of the 32, 50%) or were interpreted as negative (in 12 of 32, 37%) for patients with claims of delayed diagnosis. The awards greater than $1 million were limited to patients y o u n g e r than 50 years with proven distant or

In the study of Mitnick et al., claims involving mammography were the most expensive in terms of awards. nodal metastasis. Fibrocystic disease was the most c o m m o n l y cited diagnosis of palpable lesions that t u r n e d out to be cancer. The delay in diagnosis averaged 11.6 months. A recent case in Michigan is an excellent example of the plaintiff prevailing in a malpractice suit for failure to diagnose lung cancer. Most of these cases are w o n by the defendant. The wife of a patient who died after failure in the timely diagnoses of lung cancer was awarded $570,000. The patient was referred to a Veterans Administration hospital in 1986 because of headaches. A routine chest radiograph at that time revealed an abnormality in the right lung. The radiologist r e c o m m e n d e d a comparison with earlier chest radiographs taken in 1981. A follow-up film was done in the next month, and the radiologist again observed a suspicious lesion and r e c o m m e n d e d further examination, but no follow-up was performed. The patient was apparently not informed of these abnormalities or the 167

n e e d for urgent follow-up. Two years later, the patient again sought treatment for headaches and received another routine chest radiograph, from which the cancer was definitively diagnosed. In this case, at trial, the defense argued that the patient ultimately would have died from the cancer w h e t h e r or not s o m e o n e h a d acted on the initial radiologic findings. However, the plaintiffs expert witness said that h a d the hospital followed through with the radiologist's recommendations, the plaintiff w o u l d have h a d a 51% to 69% chance of living a normal life span. How an expert could claim that these are correct estimates is not obvious. However, this fact was found by the court, a n d the plaintiff was awarded $570,000. 58

FAILURE TO COMMUNICATE FINDINGS PROPERLY TO THE REFERRING PHYSICIAN OR PATIENT Case History 1 Pla~tiff applied for a job a n d u n d e r w e n t a preemployment physical examination that included a chest radiograph. Defendant radiologist reported an irregular aggregate density in the left lung apex but did not inform the patient. Nine m o n t h s later, physicians at another hospital informed the plaintiff that he h a d a cancerous tumor. Plaintiff claimed that earlieff treatment w o u l d have substantially altered his prognosis. Case History 2 The 'plaintiff was a w o m a n with a strong family history of cancer. She h a d what she believed was a breast infection and visited defendant radiologist on the advice of her family physician. Defendant interpreted plaintiffs m a m m o g r a m as showing a group of microcalcifications in the right breast, indicative of early stages of breast cancer. The plaintiff claimed she was told that her m a m m o g r a m was within normal limits. About a year later, the w o m a n noticed a lump in her right breast. A biopsy resulted in a diagnosis of advanced ductal carcinoma. The plaintiff u n d e r w e n t a radical mastectomy and sued the radiologist, claiming that he should not have told her that her m a m m o g r a m s were normal. Case History 3 Mammograms taken by defendant radiologist disclosed a suspicious lesion. Although the defendant r e c o m m e n d e d repeat studies in his report, neither the plaintiff nor her attending gynecologist was directly contacted. An annual m a m m o g r a m a year later revealed that the lesion h a d grown and was diagnosed as cancer. An immediate mastec168

tomy was performed, a n d 40 of 40 axillary nodes sampled tested positive for cancer. The plaintiff claimed that the defendant was negligent in failing to report the results of the m a m m o g r a m to her or her gynecologist. Obviously, c o m m u n i c a t i o n of the results is an extremely important issue. FAILURE TO PERFORM THE APPROPRIATE EXAMINATIONS OR TESTS BECAUSE OF A N INADEQUATE HISTORY OBTAINED FROM THE REFERRING PHYSICIAN OR PATIENT Case History 1 Decedent went to her family physician with various complaints, including an area of induration in her left breast near the sternum. She was referred to the defendant radiologist for a m a m m o g r a m that revealed a normal left breast and a fibrocystic right breast. She later returned to her family physician, who diagnosed a discernible mass in the left breast. A repeat m a m m o g r a m was performed a n d confirmed a mass in the left breast. An excisional biopsy established that the mass was cancerous, a n d a m a s t e c t o m y was performed. The d e c e d e n t received cancer treatment but died shortly after that. The plaintiffs c o n t e n d e d that the m a m m o g r a m of the decedent's left breast omitted the area of cancer a n d was therefore substandard. Additionally, the plaintiffs argued that the radiologist was negligent in f~iling to order further studies in spite of the negative m a m m o g r a m because of the palpated area of induration he knew or should have known to be present. Case History 2 Defendant pulmonologist performed a complete examination of the d e c e d e n t a n d diagnosed asthmatic bronchitis. Several m o n t h s later, d e c e d e n t ret u r n e d with complaints of chest pain. Defendant radiologist interpreted a chest radiograph as showing abnormal fullness or density in the right hilar area of the lung a n d performed a linear tomogram that f o u n d a normal right hilum but discovered a 12 m m coin lesion in the right u p p e r lobe. Six lesions were found, although only tissue fragments from the largest lesion were subjected to a pathological examination, which s h o w e d interstitial fibrosis. Defendant pulmonologist c o n c l u d e d that the lesions were scars because the d e c e d e n t h a d a history of smoking. Both doctors agreed to follow-up the d e c e d e n t conservatively with serial chest radiographs. Inoperable lung cancer was later diagnosed. The plaintiffs c o n t e n d e d that defendant radiologist m a d e a n u m b e r of errors. These alleged errors included (1) the defendant radiologist should have u s e d more sophisticated radioCurt l~obl Diagn Radiol, July/,dml~t 1995

graphic techniques, such as CT, to carry out his studies; (2) he misinterpreted the studies, failing to detect obscuration of the right main-stem bronchus and the mass in that region; (3) he negligently performed a needle biopsy by obtaining tissue from only one lesion and obtaining nondiagnostic tissue; (4) he should have r e c o m m e n d e d a second biopsy or further radiological testing; and (5) he was negligent in agreeing with the defendant pulmonologist to follow-up the d e c e d e n t conservatively with serial chest radiographs, and that as a result, the decedent died prematurely. INADEQUATE RADIOGRAMS BECAUSE OF IMPROPER TECHNIQUE OR MALFUNCTIONING OR INADEQUATE EQUIPMENT Case History 1 The plaintiff discovered a lump in her breast and u n d e r w e n t a mammogram. The defendant radiologist examined the breast and interpreted the mammogram as negative. Another physician later diagn o s e d breast cancer, and thereafter, the plaintiff u n d e r w e n t a modified radical mastectomy, as well as c h e m o t h e r a p y and radiation treatments. At trial of this case, the plaintiff presented expert testimony that the film taken by defendant was "grossly technically inadequate and suboptimal for interpretation." Case History 2 A 12-year-old girl with an undisclosed prior history of tuberculosis complained of hip pain while participating in gymnastics. Her pediatrician referred her to the defendant radiologist, w h o took radiographs and read them as normal. After 11 m o n t h s of continued pain and limping, the radiographs were brought to an orthopedic surgeon, w h o also read them as normal. However, he then took his o w n films, which s h o w e d an abnormality. Plaintiff c o n t e n d e d that the radiographs taken by defendant were inadequate and suboptimal. FAILURE OF HOSPITAL OR OFFICE SYSTEMS Case History 1 A 62oyear-old w o m a n went to the defendant genera] practitioner for flank pain. He ordered tests and radiographs, which were performed at the defendant hospital and interpreted by a radiologist w h o was an employee of the defendant, radiology group. A diagnosis of colon cancer was m a d e from a barium e n e m a radiograph. The defendant general practitioner assisted the defendant surgeon in a resection of the colon, b u t no cancer was found durCurr Probl Diagn KadioL July/August 1995

ing the surgery. As it turned out, the radiograph report had the wrong patient's name on it. These types of cases have, until recently, m a d e up the bulk of claims against radiologists. With the advent of interventional radiology, however, the radiologist's responsibility has been b r o a d e n e d considerably, and n e w theories are constantly being advanced. The following case histories illustrate this trend. Case History 2 Plaintiff, a 75-year-old woman, entered the hospital for angioplasty after an acute infarction. Noted in the records was the fact that she developed acute renal failure because of contrast nephropathy. Plaintiff alleged liability for improper hydration, improper dose of contrast during preoperative examinations, and inadequate monitoring to avoid toxicity to the kidneys. Note that these are allegations of negligent performance of the angioplasty itself. Such allegations are c o m m o n l y m a d e w h e n a bad result occurs. They differ considerably from the more' passive allegations of failure to read or interpret films. Case History 3 Plaintiff went to defendant hospital for a CT scan ordered by his physician. The p r o c e d u r e included the injection of a contrast material. Before the test, he was given no information concerning attendant risks, although there was a question on a questionnaire relative to w h e t h e r the plaintiff had ever suffered an adverse reaction to contrast materials. The plaintiff subsequently developed thrombophlebitis at the site of the injection and c o n t e n d e d he should have been w a r n e d of this risk. Case History 4 A 23-year-old man sustained a head injury in an auto accident. At the hospital, a CT scan was ordered, and a paralyzing drug was administered to prevent the patient from moving during the procedure. A ventilator was hooked u p to keep him oxygenated during the period of paralysis. It was later discovered that the ventilator tube was disconnected during the 15-minute CT scan, and the patient went into a persistent vegetative state. Plaintiff c o n t e n d e d that, had the ventilator-tube mishap not occurred, the patient w o u l d in all likelihood have recovered and b e c o m e a productive m e m b e r of society. Case History 5 Plaintiff, in her 40s, h a d progressively worsening weakness and tiredness in her legs and feet and 169

went to the defendants for diagnosis. They att e m p t e d a myelogram, which was unsuccessful, and then tried again. The successful myelogram caused her severe pain and discomfort. A diagnosis of possible multiple sclerosis was made. After the myelogram, she was never able to walk u n a i d e d again. The plaintiff c o n t e n d e d that the myelogram accelerated her disease a n d disability and that the defendants h a d failed to inform her in advance that a myelogram could worsen her condition. Case History 6

Plaintiff, aged 27, developed pain in his left leg and groin and was hospitalized. A vascular surgeon ordered a CT scan with contrast of his abdomen and pelvis. The plaintiff signed a consent form without conversing with any doctor regarding the risks of the CT scan procedure. The patient was not given a choice bf the type of contrast material used. The defendant physician introduced the IV lines into the backs of the plaintiffs feet. On the introduction of the contrast agent into the plaintiffs feet, the 151aintiffcomplained of pain, and the defendant stopped the injection on discovering an infiltration. The defendant clamped off the infiltrated IV and completed the study using the other foot. The infiltrated foot was injected with lidocaine, and warm compresses were applied. The plaintiff was taken to his room, and other physicians took over his care. Over h period of several days, the plaintiff developed a third-degree ulcer on the d o r s u m of his right foot. A plastic surgeon was called in to perform a skin graft. The plaintiff c o n t e n d e d that the defenclant physician failed to obtain informed consent from the plaintiff regarding the type of contrast material and the risk to his foot, that the procedure was negligently done, that the postinfiltration care was negligent, and that as a result, he h a d to undergo additional surgery. B R E A C H O F T H E S T A N D A H D O F CAHE

The fact that a claim is made, w h e t h e r for a noninterventional or an interventional radiologic procedure, does not automatically m e a n that the radiologist assumes responsibility. Any health care provider who undertakes the d u t y to care for the patient is required to perform services only in accordance with a legally defined standard of care (i.e., a uniform m o d e of conduct, behavior, or practice, based on which the medical care professional's action is evaluated). As long as a radiologist meets this standard, he cannot be held liable for a patient's claim of malpractice. A breach of the standard of care occurs w h e n a 170

physician fails to do or not do something that a physician of ordinary learning, judgment, or skill would have done or not done u n d e r like or similar circumstances. If the physician is a specialist (such as a radiologist), the ~ordinary learning, judgment, or skill" means that learning, judgment, a n d skill ordinarily possessed by other persons who specialize in the same field of medicine. To put it another way, the physician's c o n d u c t m u s t not fall below Uthe standard established by law for the protection of others against unreasonable risk of harm. ~Sa The appropriate standard of care is established through the testimony of experts who give their opinions regarding the professional c o n d u c t of the physician in a given fact situation that has given rise to the lawsuit. This requirement of expert testimony derives from the fact that lay jurors do not normally have the requisite knowledge and experience to evaluate the quality of medical care rendered by a medical care professional. Thus there is no absolute standard of care the jury or a judge will be called on to apply to a given fact situation. It is up to the trier of fact to decide the applicable standard by evaluating conflicting expert testimony in the crucible of courtroom debate. DAMAGES

To recover for malpractice, a patient must show some actual damage. Proof of a breach of the standard of care, devoid of actual harm, is never sufficient to support recovery. PROXIMATE CAUSE

Proximate cause refers to the cause-and-effect relationship between the alleged violation of the standard of care and the damages. In any given case, there could be a n u m b e r of acts that could be claimed to Ufall below the standard of care." This does not necessarily m e a n that these alleged violations caused harm to the patient. The b u r d e n is on the patient to prove that the injuries were caused by the alleged violation (most often through the testimony of an expert). If the plaintiff cannot, these violations cannot be used as proof of malpractice. VICARIOUS LIABILITY

Radiologists can be held liable not just for their own acts but also for the acts of others who aid them in some way, such as radiologic technicians and other nonphysicians. Thus the radiologist is responsible for the performance of a radiologic procedure by a nonphysician and also for the training, Curr Probl Diagn Radiol, July/August1995

supervision, established procedures (or lack thereof), a n d periodic review of the nonphysician's competence. Some examples of this follow. Case History 1 Plaintiff, a 49-year-old woman, saw defendant radiologist on referral from her family practitioner for a barium e n e m a scan, after long-standing complaints of intestinal problems. Radiographic technicians performed a barium e n e m a scan. Defendant reported negative findings despite the presence of a large a m o u n t of fecal contamination of the c e c u m and right colon present on the film. The plaintiff alleged liability against defendant, not only for failure to diagnose colon cancer by misreading the films a n d not ordering repeat studies, but specifically for the improper performance of the barium e n e m a procedure by the technicians. The technicians failed to ensure that the patient was properly prepared through colonic cleansing. In addition, the defendant was charged with not establishing procedures to ensure that the technicians properly prepared patients and with not properly training the technicians. Case History 2 The plaintiff, aged 45, suffered from preexisting back, neck, and psychiatric problems. She alleged that the defendant's m a m m o g r a p h y technician used excessive force during a mammogram, causing a scar tissue capsule to tear and the plaintiffs right breast implant to shift. The plaintiff, who had swelling in her u p p e r breast, alleged she was assured by the technician that she would stop compressing the plaintiffs breast if the plaintiff said it hurt. The plaintiff alleged that she kept telling the technician that her breast hurt, but the technician did not stop. The plaintiff alleged that she was left with chronic breast pain, deformed breasts, loss of sexual drive, and depression. INFORMED CONSENT Except in an emergency situation, a patient should be given the opportunity to determine w h e t h e r he or she wants to undergo a given medical procedure. However, it is not sufficient for the patient merely to give permission. The patient must be fully informed of the risks and alternatives to the procedure so that a knowledgeable decision may be made. Physicians may be sued for malpractice if they do not disseminate sufficient information on which the patient can base such a decision. The informed consent doctrine is g r o u n d e d in society's belief that a patient has a right to selfCurt Probl Diagn Radiol, July/August1995

determination in his or her medical care. The imp o r t a n c e of informed consent has grown over the last few years because of the consumerism movement, which dictates that the c o n s u m e r should have the right and opportunity to make an informed choice regarding the goods and sewices he or she purchases. It has been fueled, by a public perception that m a n y members of the medical profession are paternalistic and insensitive to the desires of their patients. Patients often believe that doctors withhold information, having rationalized that they would not be knowledgeable or capable enough to u n d e r s t a n d the information, or that it is in their best interest not to know. Who Must Obtain Informed Consent f r o m the Patient? Without the direct, personal relationship with the patient that the referring physician ordinarily has, there is often a great reluctance by the radiologist to be the one to tell the patient w h y a certain procedure is n e e d e d or to describe the risks associated with it. It is often a s s u m e d that t h e referring physician has already done this, and the radiologist does not want to ~step on the toes" of or place himself in possible conflict with the referring physician. However, is it sufficient to rely on the fact that the referring physician should have informed the patient of the risks and benefits of an interventional procedure? Probably not. Several courts have held that the responsibility to obtain the consent lies with the physician who is performing the procedure. In Halley v Birbiglia, 6° a neurologist, who merely acted as a consultant, was not held liable for failure to obtain informed consent, even though the neurologist r e c o m m e n d e d that the child plaintiff in the case undergo an arteriogram, and the neurologist had failed to inform of the inherent risks. The court held that the d u t y to inform belonged with the radiologist who actually performed the arteriogram and not the consultant who recomm e n d e d the procedure. What Constitutes Sufficient Disclosure? The debate as to what constitutes sufficient disclosure to a patient has centered on whether, given the complexity of medical practice, the physician should determine w h e n disclosure has been sufficient, or w h e t h e r it should be determined by what a reasonable patient would do u n d e r like or similar circumstances. It would appear that the latter position is the only safe course to take today and that it is extremely dangerous for a physician not to disclose all material risks. Of course, the question then becomes, what risks are material? 171

In 1972, the court in C a n t e r b u r y v S p e n c e sl held that informed consent required disclosure of all material risks. Material risks were identified as those dangers that a reasonable person would deem significant in making a determination w h e t h e r to undergo a particular medical procedure. This standard of disclosure was based on a reasonable lay person's perception of what constituted material risks as opposed to a professional's opinion. The court was concerned that limiting the standard of disclosure to a professional's judgment abrogated the patient's right to self-determination. The court viewed nonmedical judgment sufficient to determine what constitutes material risks. The Supreme Court of California held that a physician's duty to obtain a patient's informed consent does not require disclosing statistical life expectancy inforrr~ation.6z The court reasoned that, rather than m a n d a t e the disclosure of specific information as a matter of law, the better rule is to instruct the jury that a physician is u n d e r a legal duty to disclose to the patient all the material information n e e d e d to make an informed decision

How does the physician know when he has made sufficient ' ;) disclosure. How much information must be provided? regarding proposed treatment. This holding recognizes that in administering the doctrine of informed consent, the contexts and clinical settings in which physicians and patients interact are so varied that strict guidelines for disclosure cannot be drawn. Whether the circumstances unique to a given case supported a d u t y of disclosure was a matter for the jury to decide. The jury determines the adequacy of disclosures made by physician to patient. Thus expert testimony has a "limited and essentially subsidiary role" in informed consent litigation. But in a case in which the information at issue lies outside the significant risks associated with a given treatment, the question of disclosure turns on the standard of practice within the medical community, and expert testimony is permitted. In K D r m a n v M a l l i n , 6a the Supreme Court of Alaska a d o p t e d a patient-centered standard for informed consent. It held that physicians m u s t disclose those risks and benefits of a proposed procedure that a reasonable patient would need to know to make an informed and inte,lligent decision. In 172

this case a patient consulted a plastic surgeon about elective breast-reduction surgery. At the initial visit, the surgeon showed her two videotapes, which emphasized that plastic surgery results in p e r m a n e n t scars, and provided her with a pamphlet on breast reduction. The Alaska Supreme Court, however, stated that by merely identifying the risks, the doctor did not necessarily provide the patient with the necessary information. The physician must explain the likelihood of the occurrence of the risk in terms that are meaningful to the lay patient. This finding m a y have implications in the appropriate standards for radiologists in informing patients of their risks of a contrast reaction and the comparative risk of ionic a n d nonionic contrast materials. How does the physician know w h e n he has m a d e sufficient disclosure? How m u c h information must be provided? The answers to these questions will differ, depending on the specific circumstances. Because there are different types of contrast materials, some of which are more expensive but entail less risk for the patient, m u s t the physician also disclose this and obtain the patient's consent to use ionic contrast material? Many observers feel that the patient should be able to participate in the costbenefit analysis of his or her medical care and should have the economic option of reducing his or her risk. Which contrast material to use should not be a radiologist's decision alone. THE IMPORTANCE

OF CAUSATION

Failure to inform a patient completely of risks and alternatives becomes important only w h e n it can be s h o w n to be causally related to a bad resuit. It is insufficient for a patient to establish only that disclosure of information was omitted. The patient m u s t prove, as well, that h a d the disclosure been made, he or she w o u l d not have continued with the procedure, and his or her knowledge concerning a procedure m a d e a difference in the outcome. Courts have applied various standards to determine causation in this context. Some courts have applied an objective standard, requiring proof that a reasonable person w o u l d not have continued with a procedure h a d material information been disclosed. Other courts have simply allowed the patient to testify that, h a d he or she k n o w n of the information, he or she w o u l d not have permitted the procedure. This s t a n d a r d allows patients to "second guess" the result. Still other courts have allowed a combination of these standards. The causation issue arises frequently in failure to diagnose cases and, more recently, in angiography Curr Probl Diagn Radiol, July/August1995

cases in which damages from contrast media are alleged. For example, a patient undergoes a procedure with contrast m e d i u m that results in a severe reaction, of which risk he or she had been informed. However, the patient was not informed that diagnosis could probably have been m a d e by ultrasound, which would not have required the use of contrast. In this case, could the radiologist be held liable for failing to disclose a viable, noninvasive alternative, even though the patient was fully informed of the risks of the invasive procedure and knowingly consented to the procedure? The answer is, probably, yes. But what about the fact that the ultrasound may not be as diagnostic as the angiogram? Does the physician have to explain that to the patient and r e c o m m e n d the angiogram, if the physician thinks it appropriate? Again, the answer is, probably, yes. Fully disclosing the risks and alternatives, together with the r e c o m m e n d a t i o n of the .physician, leaves the choice to the patient and protects the physician. Some courts have indicated that the physician is obligated to inform the patient of the risks of refusing a r e c o m m e n d e d procedure, as well as the risks inherent in the performance. A 1980 California case, T r u m a n v T h o m a s , s4 concerning a w o m a n who refused a Pap smear for economic reasons, held that a physician owed a d u t y to the patient to inform, not only of the risks of the procedure, but also of the attendant risks of not following the physician's recommendation. The court stated that this duty applied to information not c o m m o n l y known to lay people. SUMMARY

Allegations of misconduct or malpractice on the part of a radiologist m u s t conform to certain legal standards. Plaintiffs m u s t show that the radiologist h a d a specific d u t y to the plaintiff, that he breached that d u t y by failing to live up to the standards of his profession, and that the plaintiff was injured as a direct result of the violation of the standard of care. These are not insignificant requirements, and a plaintiff's case can easily fail ff only one of these elements is not shown. The proliferation of invasive procedures in radiology and the inherent serious patient risks make attention to the issues of responsibility for the acts of personnel, informed consent, as well as negligence, increasingly urgent. Enlisting patients in the m a n a g e m e n t decisions of their medical care, by forging a partnership of shared knowledge a n d decision making, in m a n y ways can assist the radioloCurr Probi Diagn Badiol, July/August 1995

gist in proper a n d responsible performance of his or her duties.

RECOMMENDATIONS

As rapidly as the practice of radiology is progressing to meet the challenges a n d opportunities presented by medical advancements, so m u s t the radiologist progress in his or her m o d e and style of practice. The following are several easily adopted suggestions for the c o n d u c t of radiology practice that the progressive radiologist should consider: 1. Do not make any promises to y o u r patients as to expected outcome or results of a procedure. Ensure that y o u r patient u n d e r s t a n d s that no promises have been made. Include a statement indicating that no promises have been m a d e in a consent form to be signed by the patient or as a clear, dated, witnessed notation in the medical chart. 2. Enlist patients as partners in m a n a g e m e n t of their medical care. Take the time fully to discuss the risks and alternatives of r e c o m m e n d e d procedures. Good descriptions of what to expect, as well as of eventualities, reduce patients' fears and help to create a b o n d with the physician as well as underscore patients' rights of self-determination. Rem e m b e r that full disclosure of risks of a procedure includes disclosure of risks of refusing the procedure as well. If cost is a factor in making alternative choices, such as with contrast media, give the patient the choice of paying the extra cost. 3. Keep up to date with n e w techniques and trends in y o u r specialty through continuing medical education programs a n d professional journals. Do not attempt to perform interventional procedures without special training. You cannot simply rely on years of experience in traditional radiology. 4. Prepare a standardized system that governs the way y o u handle patients and procedures in y o u r office. Determine the specific tasks or functions necessary to perform the job. Determine h o w m u c h of what is currently being done can be improved on, standardized, and m a d e routine. Determine the adequacy of resources presently available to make desired changes and establish a schedule for obtaining missing components. Prepare forms, checklists, step-by-step procedures, and detailed, written instructions for the performance of every aspect of each job. Establish controls so that a breakdown in the system will be caught and can be corrected. Establish a procedure to change or modify the system, a n d train people to use the system. 17:]

UNRESOLVED I S S U E S

T h e a d v a n c e s in m e d i c a l t e c h n o l o g y a n d practice, as well as the d e v e l o p m e n t s of a m o r e legally m i n d e d a n d litigious society, are c a u s i n g m e d i c a l ethics a n d p h i l o s o p h y to merge, m o r e frequently, with legal issues. In this context, the legal p r i n c i p l e of i n f o r m e d c o n s e n t provokes d e b a t e in at least two areas: (1) public p o l i c y c o n s i d e r a t i o n s versus individual n e e d s , a n d (2) p h y s i c i a n d e t e r m i n a t i o n of p a t i e n t best interest versus p a t i e n t selfdetermination.

PUBLIC POLICY VERSUS INDIVIDUAL NEEDS

Do p u b l i c policy c o n s i d e r a t i o n s ever o u t w e i g h the rights a n d n e e d s of individuals? If society as a w h o l e is adversely affected, individuals are ultim a t e l y adversely affected. E c o n o m i c s is a public policy c o n s i d e r a t i o n that plays a large role in the delivery of m e d i c a l care. I n c r e a s e d costs to society u l t i m a t e l y cost the individual. Looking at the issue of i n f o r m e d c o n s e n t brings to m i n d two views w i t h e c o n o m i c u n d e r c u r r e n t s , s e e m i n g l y o p p o s i n g o n e a n o t h e r : On the o n e h a n d , individuals s h o u l d have the right to m a k e i n f o r m e d decisions. On the o t h e r h a n d , a physician c a n o n l y d e v o t e so m u c h time to the e d u c a tion of the patient. To s p e n d too m u c h time m e a n s that h e o r s h e is neglecting o t h e r patients. But if a full e x p l a n a t i o n is not p r o v i d e d a n d verifi,e d in s o m e m a n n e r , h o w d o e s the p h y s i c i a n p r o t e c t h i m s e l f o r h e r s e l f f r o m a lawsuit? Moreover, h o w d o e s the p h y s i c i a n d e t e r m i n e h o w m u c h k n o w l e d g e is sufficient, s h o r t of a c o u r t determination? How does a physician determine that the p a t i e n t fully u n d e r s t a n d s ? H o w d o e s the p h y s i c i a n d e t e r m i n e that the p a t i e n t is cap a b l e of digesting the n e c e s s a r y i n f o r m a t i o n ? What s h o u l d t h e p h y s i c i a n d o if, in his o r h e r j u d g m e n t , the p a t i e n t d o e s n o t have the requisite e d u c a t i o n a l b a c k g r o u n d to evaluate the choices? T h e time that it m a y r e q u i r e to p r o v i d e sufficient i n f o r m a t i o n to p a t i e n t s a n d a n s w e r s o m e of t h e s e q u e s t i o n s n o t o n l y c a n d i m i n i s h the p e r s o n a l fin a n c e s of the physician, b u t also the i n c r e a s e d time n e c e s s a r y to d e v o t e to giving individual p a t i e n t s g r e a t e r u n d e r s t a n d i n g c a n d i m i n i s h the m e d i c a l c o m m u n i t y ' s ability to care for society as a w h o l e . W h e n d o e s the cost of t r a n s m i t t i n g i n f o r m a t i o n to p a t i e n t s o u t w e i g h the n e e d s of p a t i e n t s to k n o w ? Can o u r h e a l t h s y s t e m really afford b e t t e r i n f o r m e d p a t i e n t s ? Can o u r h e a l t h s y s t e m really not afford better informed patients? 174

PHYSICIAN D E T E R M I N A T I O N OF P A T I E N T B E S T I N T E R E S T VERSUS P A T I E N T SELF-DETERMINATION

H o w c a n a p h y s i c i a n serve the best interests of his or h e r p a t i e n t ? O u r society clearly rebels against p e r c e i v e d p a t e r n a l i s m o n the part of physicians. However, are t h e r e situations in w h i c h the physician is justified in w i t h h o l d i n g i n f o r m a t i o n f r o m the p a t i e n t ? If the p h y s i c i a n believes that the inform a t i o n c o u l d c a u s e the p a t i e n t to h a r m h i m s e l f or herself, s h o u l d the p h y s i c i a n be p e r m i t t e d , in spite of failure to obtain i n f o r m e d c o n s e n t , to refrain from d i s s e m i n a t i n g the i n f o r m a t i o n ? S h o u l d the c o n c e p t of "best interest of the patient" be allowed to abolish, or at least diminish, patients' rights to i n f o r m e d c o n s e n t , especially b e c a u s e this is, at best, often a subjective d e t e r m i n a t i o n ?

CONCLUSIONS

I n f o r m e d c o n s e n t is n o t a n e w c o n c e p t . In 1914, Justice C a r d o z o stated, "Every h u m a n being of adult y e a r s a n d s o u n d m i n d has a right to determ i n e w h a t shall be d o n e w i t h his o w n body; a n d a s u r g e o n w h o p e r f o r m s an o p e r a t i o n w i t h o u t the patient's c o n s e n t c o m m i t s an assault for w h i c h h e is liable in d a m a g e s . ~ However, its p a r a m e t e r s m u s t c o n s t a n t l y be r e s h a p e d in a c c o r d a n c e with societal a n d individual n e e d s . Solutions to the q u e s t i o n s involved in this res h a p i n g p r o c e s s can be f o u n d o n l y w h e n the p e o p l e i n v o l v e d - - d o c t o r s , lawyers, a n d patients, w h o are often b o u n d in adversarial r o l e s - - o p e n l y discuss t h e i r c o n c e r n s , n e e d s , a n d beliefs. As the exciting c h a n g e s in radiology require a review of traditional p h y s i c i a n - p a t i e n t relationships, so s h o u l d the m o r e basic medical-legal issues be rec o n s i d e r e d to p r o v i d e n e w a n d b e t t e r solutions in a c h a n g i n g society. HEFEEtENCES

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