Foundations’ doctors can be sued for malpractice, Virginia court rules

By Nancy Young, The Virginian-Pilot – March 1, 2008

Doctors affiliated with charitable foundations are not immune from malpractice suits, the Virginia Supreme Court ruled Friday.

The cases involved the University of Virginia Health Services Foundation, whose lawyers had argued that because its physicians were working for a nonprofit organization they should be immune from malpractice suits.

The state’s highest court found that while the foundation’s physicians conducted “commendable” charity care for indigent patients, the bulk of its services were not charitable in nature. It sent three malpractice cases back to lower courts to be decided on their merits.

“HSF operates like a profitable commercial business with extensive revenue and assets,” the court’s opinion said. Therefore it is “not immune from tort liability under the doctrine of charitable immunity.”

If the court had ruled that UVA foundation doctors were entitled to charitable immunity, it could potentially have meant “no more medical malpractice litigation in Virginia,” said L. Steven Emmert, an appellate lawyer in Virginia Beach who argued before the court on behalf of one of the patients. Such a ruling would have opened the door to doctors and other professionals to escape liability by working under a nominally nonprofit structure, he said.

Eastern Virginia Medical School has an affiliated nonprofit physicians’ foundation group similar to UVA’s and has claimed charitable immunity for its physicians facing malpractice suits, said Glen Huff, a Virginia Beach lawyer who represents the EVMS Academic and Physicians and Surgeons Health Services Foundation.

While the EVMS group has cases pending before the state Supreme Court, Huff said that there are variations in structure versus the UVA group that could lead to a different outcome.

“We’re greatly disappointed with the opinion,” Huff said. “But it’s not necessarily a death knell for us.”

In July, the medical malpractice cap in Virginia will reach $2 million, according to The Medical Society of Virginia.