Appeals Court Upholds Medical Malpractice Law Changes

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On July 21, a state appeals court in Tallahass2 Indest-2009-1ee upheld the constitutionality of a controversial change in Florida’s medical malpractice law. It ruled that some privacy rights are waived when patients pursue medical malpractice lawsuits. A federal appeals court last year also upheld the change in Florida’s law.

The decision by a three-judge panel of the First District Court of Appeal resulted from a 2013 change in the medical malpractice law. The Republican-controlled Florida Legislature passed the amendments to the laws after a lobbying dispute between groups like doctors and plaintiffs’ attorneys.

Ex Parte Communications Play a Major Role.

The disputes in whether the changes were constitutionally valid centered around what is known as “ex parte communications.” The amended statute allowed doctors being sued for malpractice (or their attorneys) to speak with the patients’ other physicians, whether the patient consents or not. The new law also requires patients to sign forms authorizing the release of medical information before filing malpractice claims.

Ex parte communications allow a patient’s personal health information be obtained and used in a case. Other doctors who have treated the patient could provide the information. Additionally, without the patient’s knowledge or the patient’s attorney present, a disclosure of medical information could occur.

This Ruling Stemmed From a 2013 Case in Escambia County.

In 2013, Emma Gayle Weaver of Escambia County, Florida wanted to file a medical-malpractice lawsuit against a physician. According to court documents, her concern was about the constitutionality of the ex parte provision of the law. She challenged having to disclose her medical information to the other physician she was suing in order to bring her case.

The challenge raised legal questions about privacy rights given to all citizens by the Florida Constitution. But the panel of appeal judges disagreed that the ex parte provision violates her privacy rights.

The appeal decision, written by Judge James Wolf, stated: “It is well-established in Florida and across the country that any privacy rights that might attach to a claimant’s medical information are waived once that information is placed at issue by filing a medical malpractice claim. Thus, by filing the medical malpractice lawsuit, the decedent’s medical condition is at issue.”

To read more about the Weaver v. Myers decision, click here.

Another Issue Was Addressed.

Another issue questioned whether the ex parte change violated the constitutional separation of powers. The contention dealt with whether the Legislature overstepped the role of the Florida Supreme Court. But the appeals court ruled that the change was not procedural but rather was “integral to the substantive pre-suit notice” requirements that are in the law and mandated before the filing of a medical malpractice case.

The Federal Appeals Court Also Said the Law Doesn’t Violate HIPAA.

Last year, the 11th U.S. Circuit Court of Appeals upheld the ex parte change in a ruling that focused on whether the 2013 law violates the federal Health Insurance Portability and Accountability Act (HIPAA), which prevents disclose of personal medical information. The federal appeals court said the law did not violate HIPAA, a decision also cited in the First District Court of Appeal’s decision.


Do you agree the court’s ruling? Do you think this provision violates privacy rights? Please leave any thoughtful comments below.

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The attorneys of The Health Law Firm provide legal representation to physicians, nurses, nurse practitioners, CRNAs, dentists, pharmacists, psychologists and other health providers in academic disputes, contract negotiations, license applications, board certification applications and hearings, credential hearings and civil and administrative litigations.

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Saunders, Jim. “Appeals court upholds waiver of privacy rights in malpractice cases.” (July 22, 2015). Palm Beach Post. From:

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area.  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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2010 District Ruling for $44.9 Million in Tuomey Overturned by U.S. Appeals Court

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Tuomey Reversed

The 4th U.S. Circuit Court of Appeals overturned a federal district judge’s 2010 decision for Tuomey Healthcare System on March 30, 2012. (U.S. ex rel. Drakeford v. Tuomey Health. Sys., Inc., 4th Cir., No. 10-1819 (Mar. 30, 2012)) The lower court’s decision ordered Toumey Healthcare System to pay $44.9 million for allegedly violating the Stark Law. (42 U.S.C. § 1395nn) The appeals court decided that the 2010 district ruling denied Tuomey its Seventh Amendment right to a jury trial. 

A physician initiated a qui tam or whistle-blower suit against Toumey under the False Claims Act in 2005. The suit was later picked up and prosecuted by the U.S. Department of Justice. In the False Claims Act complaints filed in the U.S. District Court in Columbia, S.C., the whistle-blower and the U.S. Department of Justice (DOJ) alleged that Tuomey had contracts with physicians that were illegally overpaid by Tuomey. This was alleged to be in exchange for their exclusively referring patients to Tuomey’s hospital, thus violating the Stark Law. Billings for referrals from those physicians allegedly constituted false claims as a result of this.

Novel Theory Used to Obtain Large Recovery

This was a novel theory to pursue in a qui tam or whistle-blower case because it was not based directly on submission of false claims. Instead it put forth the theory that the claims were false because they violated the anti-referral provisions of the Stark Act.

In March 2010, a jury found that Tuomey had not violated the False Claims Act but did find Tuomey guilty of committing Stark Law violations. (Note: The Stark Act does not establish a private cause of action for plaintiff to recover civil damages.) This jury verdict was set aside by the judge and a new trial regarding the False Claims Act allegations was granted. Under the lower court’s decision, Tuomey was still required to repay the government $44.9 million in Medicare payments that were allegedly received through physician contracts that violated the Stark Law.  This was the part of the verdict that was not set aside by the trial court.

However, according to the opinion of the appeals court, when the district court set aside the jury’s verdict, it specifically ordered that the new trial would encompass the whole False Claims Act matter, including whether Tuomey had violated the Stark Law. This nullified the jury’s interrogatory answer (part of the verdict it returned) regarding the Stark Law. Thus, when the district court ordered Tuomey to repay the government for violating the Stark Law, it denied Tuomey of its right to a jury trial.

Two Major Stark Issues Discussed

The appeals court also addressed two major Stark Law issues that were raised on appeal and are likely to recur on remand. The first issue is whether the facility component of the services performed by the physicians, for which Tuomey billed a facility fee to Medicare, constituted a “referral” within the meaning of the Stark Law. The court used the Health Care Financing Administration’s (now the Centers for Medicare and Medicaid Services) final rule on referrals (66 Fed. Reg. 856, 941, Jan. 4, 2001) to conclude that the facility/technical component of the physician’s personally performed services does constitute a referral.

The second issue was the correct standard to use. Having decided that the physicians were making referrals to Tuomey, the appeals court then examined if an arrangement that takes into account anticipated referrals violate the Stark Act’s “volume or value standards.” The “volume or value standards” require that compensation must be calculated in a way that does not take into account the volume or value of referrals between the parties.

Fair Market Value Standard

Additionally, Stark Act requires that whatever financial relationship exists reflects “fair market value.” Stark defines “fair market value” as compensation that “has not been determined in any manner that takes into account the volume or value of anticipated or actual referrals”(42 C.F.R. § 411.351). Thus, the court concluded that compensation based on the volume or value of anticipated referrals does implicate the volume or value standard. The court left it to the jury to decide if Tuomey’s contracts violated the fair market value standard.

$50 Million May be Returned to Tuomey

The government has 45 days from the date of the decision to request a rehearing. If it doesn’t, the matter goes back to the South Carolina federal district court where it was originally decided. Tuomey can then request the money that it had set aside to pay the government back, $50 million according to it, to be released to the health system.

Tuomey Issues Press Release

In a press release dated March 31, 2012 (Press Release), signed by Jay Cox, its President and Chief Executive Officer (CEO), Tuomey Healthcare System stated:

The 4th Circuit has issued an opinion in favor of Tuomey on our appeal. We are pleased that the 4th Circuit Court has decided that the District Court’s judgment violated Tuomey’s Seventh Amendment right to a jury trial, and vacated (reversed) the $50 million judgment against Tuomey Healthcare System.

*          *          *

As the Court of Appeals said in the opinion: “The whole case, including the issues of fact at the former trial is open for hearing and determination.” This includes the incorrect finding by the first jury that Tuomey violated the Stark Law. Again, we are pleased with this news and we will keep you posted as we learn more.

Setback to Plaintiff’s Qui Tam Bar?

The original decision in Tuomey had encouraged plaintiff’s attorneys who take whistle-blower cases in health care matters and had alarmed health care systems across the country.  Although this does not eliminate the ability to use Stark Act violations as the basis for False Claims Act recoveries, it does indicate that the courts will require strict pleading, proof and procedural rules before it does allow this.

Sources Include:

Blesch, Gregg, “Appeals Court Overturns Order for S.C. Hospital to Pay $45 Million in Stark Case,” Modern Healthcare (Apr. 1, 2012). From:

Cheung, Karen M., “Federal Appeals Court Overturns $45M Stark Ruling,” FierceHealthcare (Apr. 2, 2012). From:

Cox, Jay, “Federal Case Update,” Tuomey Healthcare System Press Release (Mar. 31, 2012).

Cox, Jay, “Federal Case Update,” Tuomey Healthcare System Press Release (Mar. 31, 2012). From:

Davis, Caralyn, “Stark Violations: Tuomey Healthcare in South Carolina Ordered to Pay $50 Million,” FierceHealthcare (June 9, 2012). From:

HHS, “Medicare and Medicaid Programs: Physicians’ Referrals to Health Care Entities With Which They Have Financial Relationships,” 66 Fed. Reg. 856, 941 (Jan. 4, 2001). From:

U.S. ex rel. Drakeford v. Tuomey Health.Sys., Inc., 4th Cir., No. 10-1819 (Mar. 30, 2012). From:

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

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