February 26, 2022

In its opinion dated February 24, 2022, the Supreme Court of California (“California Supreme Court”) held that California’s $250,000 cap on noneconomic damages in medical malpractice cases “applies to a physician assistant who has a legally enforceable agency relationship with a supervising physician and provides services within the scope of that agency relationship, even if the physician violates his or her obligation to provide adequate supervision.”

The California Supreme Court therefore reduced the $4.25 million in noneconomic damages awarded in a medical malpractice case to $250,000 pursuant to MICRA’s cap on noneconomic damages.

MICRA

Under § 3333.2, subd. (c)(2) of the Medical Injury Compensation Reform Act (MICRA), damages for noneconomic losses shall not exceed $250,000 in “any action for injury against a health care provider based on professional negligence.” (Civ. Code, § 3333.2, subds. (a), (b)). An action is based on “professional negligence” and thereby subject to section 3333.2’s cap on noneconomic damages only if a health care provider’s services are “within the scope of services for which the provider is licensed” and “are not within any restriction imposed by the licensing agency or licensed hospital.”

In the case the California Supreme Court was deciding, the issue was whether section 3333.2 applies to actions against physician assistants who are nominally supervised by a doctor but receive minimal or no actual supervision when performing medical services. The plaintiff alleged that the physician assistant in a dermatology practice misdiagnosed a dark spot on an eight-month-old infant’s scalp that developed into a bump that was diagnosed more than two years later as metastatic malignant melanoma. The child died less than one year after diagnosis.

The California Supreme Court stated the relevant facts: Dr. Glenn Ledesma, a dermatologist, owned and operated a dermatology clinic in Southern California. Dr. Bernard Koire, a plastic surgeon, contracted with the clinic to provide physician services, physician assistant supervisor services, and consulting services. Suzanne Freesemann and Brian Hughes worked as physician assistants at the clinic.

In 2009, Freesemann and Dr. Ledesma signed a DSA designating Dr. Ledesma as Freesemann’s supervising physician. According to the trial court, “Neither party formally revoked the DSA and it was thus nominally . . . in effect” at the time of the events giving rise to this case. Hughes and Dr. Koire signed a DSA designating Dr. Koire as Hughes’s supervising physician. Although the DSA between Hughes and Dr. Koire was undated, the trial court found that it established a supervising physician-physician assistant relationship.

At the time of Freesemann’s clinical encounters with the infant, Dr. Ledesma was no longer fulfilling any of his supervisory obligations under the 2009 DSA. According to the trial court, Dr. Ledesma was “involved in operating the clinic facilities in a business sense,” but “he was no longer in active practice as a physician.” During Hughes’s clinical encounters with the infant, “Dr. Koire was not available in person or by electronic communications at all times.” Dr. Koire also “was no longer engaged in active practice.”

The California Supreme Court stated that section 3333.2 applies only to actions “based on professional negligence.” The definition of “professional negligence” in section 3333.2 has four elements: (1) “a negligent act or omission to act by a health care provider in the rendering of professional services,” (2) “which act or omission is the proximate cause of a personal injury or wrongful death,” (3) “provided that such services are within the scope of services for which the provider is licensed,” and (4) “which are not within any restriction imposed by the licensing agency or licensed hospital.” The parties did not dispute that the first two elements were satisfied. The question was whether a physician assistant who receives negligible supervision from his or her supervising physician provides services outside “the scope of services for which the provider is licensed” or “within [a] restriction imposed by the licensing agency or licensed hospital.”

Because a physician assistant is only authorized to perform services “when the services are rendered under the supervision of a licensed physician and surgeon,” the issue is a question of what it means for a physician assistant to be “under the supervision” of a licensed physician.

The California Supreme Court stated that the statutory language “suggests that a physician “supervis[es]” a physician assistant when the physician undertakes legal responsibility for the physician assistant’s conduct. While that provision has recently been amended to additionally specify that supervision requires “[a]dherence to adequate supervision as agreed to in the practice agreement,” the amended law is not before us today. (Bus. & Prof. Code, § 3501, subd. (f)(1)(A).)”

“An interpretation of the “scope of services” proviso based on adequacy of supervision “would threaten not only this goal but also the broader purpose of MICRA” … Permitting an unlimited award of noneconomic damages against the physician assistant and only a limited award against the supervising physician based upon the same harm would be both irrational and inconsistent with MICRA’s goal of predictability in damage awards.”

“Second, the regulations governing physician assistants place most of the onus of ensuring compliance with day-to-day supervisory obligations on the supervising physician, not the physician assistant … As a practical matter, a physician assistant may have little ability to monitor or control whether a supervising physician complies with his or her supervisory obligations, such as the obligation to be available at all times.”

“An interpretation of the “scope of services” proviso based on the legal agency relationship between the supervising physician and physician assistant avoids the unpredictability discussed above. Under this interpretation, a physician assistant acts within the scope of his or her license as long as he or she acts under an established agency relationship with a licensed physician, provides the type of medical services he or she is authorized to provide as the physician’s agent, and does not engage in an area of practice prohibited by the PAPA.”

The California Supreme Court concluded: “We hold that a physician assistant practices within the scope of his or her license for purposes of MICRA’s cap on noneconomic damages when the physician assistant acts as the agent of a licensed physician, performs the type of services authorized by that agency relationship, and does not engage in an area of practice prohibited by the PAPA. (Bus. & Prof. Code, former § 3502, subd. (d).)”

The California Supreme Court further concluded: “We hold that a physician assistant does not render services “within [a] restriction imposed by the licensing agency” (§ 3333.2, subd. (c)(2)) simply by engaging in unprofessional conduct, such as the noncompliance with supervisory regulations at issue in this case.”

The California Supreme Court stated: “the $250,000 cap is an “attempt to control and reduce medical malpractice insurance costs.” (Ibid.) The damages cap inherently concerns health care providers alleged or proven to have engaged in negligent conduct; it is not designed to reward or protect health care providers who, acting within the scope of their education and training, adhere to professional standards while exempting those who do not … MICRA may apply to the misconduct of a health care provider even if the misconduct could serve as the basis for professional discipline … the possibility that criminal liability could attach to a health care provider’s conduct does not necessarily render MICRA inapplicable … the fact that Freesemann’s and Hughes’s conduct could give rise to professional discipline or criminal liability does not render MICRA inapplicable.”

Source Lopez v. Ledesma, S262487.

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