High court takes up key issue
Its ruling is expected to affect medical malpractice cases

By Bill McKelway, Richmond Times-Dispatch – January 10, 2008

The state Supreme Court heard arguments yesterday that pitted the rights of patients injured by negligence against the medical community’s need to preserve its financial well-being in the face of growing indigent-care demands.

Lawyers on both sides of the issue have described it as the most significant matter taken up by the court regarding medical malpractice since 1990, when the Virginia Supreme Court upheld the state’s limit on malpractice awards.

If successful, tax-exempt physician foundations in Virginia employing about 1,200 doctors and supporting the state’s three medical schools could win immunity from malpractice suits because of the charitable care they provide the poor.

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

Lawyers representing three plaintiffs in malpractice suits told the high court yesterday that the so-called charitable immunity doctrine is being misapplied and disguises multimillion-dollar business models whose primary focus is profit.

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

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

The role of the physician at the university has not appreciably changed since Thomas Jefferson recruited the school’s first teaching doctor in 1824, Murray said.

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

Donald Morin, representing the foundations, said the bonuses are necessary to attract the best doctors, to remain competitive and to bolster teaching. Preserving charitable care, he argued, is elemental to preserving the foundations’ mission and promise to provide medical care “to anyone who walks in the door.”

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

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

But plaintiff lawyer L. Steven Emmert argued that if the charitable-immunity doctrine is upheld in medical malpractice cases, it could be applied to myriad physician groups, as well as architects, engineers and other professions.

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

Applying the doctrine of charitable immunity to physician negligence has received divergent opinions from state circuit judges. Grounds for the immunity stem from a 2005 case in which the state Supreme Court ruled that a YMCA was immune from suit filed by a youth who was attacked within a YMCA facility.

A decision in the case is expected this spring.