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Physician-owned partnerships created to provide gynecological testing or other pathology services qualify for protection under the state’s health care liability law, the 5th Court of Appeals held on April 26. That means plaintiffs who sue such entities must comply with the expert report requirements imposed under the Texas Legislature’s 2003 tort reforms. A three-judge panel of the Dallas appeals court dismissed claims that a husband and wife filed against three physician-owned pathology laboratories, alleging the labs misread the wife’s Pap smears. The 5th Court dismissed the claims in Pro Path Services LLP, et al. v. Koch, because plaintiffs Rebecca and Paul Koch did not submit expert reports required under Texas Civil Practices & Remedies Code �74.351. [ See the court's opinion.] Three of the defendants in the suit � Pro Path Services LLP, ProPath Women’s Services Ltd. and ProPath Women’s Services LLP (the Pro Path defendants) � filed an interlocutory appeal, after the 134th District Court in Dallas denied their motion to dismiss the Koches’ causes of action against them. The 5th Court dismissed the claims with prejudice and remanded the cause to the trial court for determination of the Pro Path defendants’ attorneys’ fees and court costs. “It’s a wake-up call,” Tommy Jacks, an Austin attorney, says of the 5th Court’s decision in Koch. Jacks, who represents plaintiffs in medical-malpractice cases but was not involved in Koch, says the case shows how broadly the Legislature wrote the statute and what a court can do with the definitions and applications in Chapter 74 to “sweep into coverage” a party who formerly would not have been covered. That means practitioners have to take a different approach when filing suits involving health liability claims. “When in doubt � or even if you think you’re not in doubt � file a report,” says Jacks, the principal in the Jacks Law Firm. In 2003, the Texas Legislature rewrote health care liability laws as part of the tort overhaul in H.B. 4, enacting Chapter 74 to replace Article 4590i. Ed Quillin is lead counsel for the Pro Path defendants. He says the 5th Court’s opinion � while it might expand the statutory list of health care providers � is consistent with what the Legislature intended when it enacted Chapter 74. “The Legislature changed the definition [of a physician] a tad,” says Quillin, principal in the Quillin Law Firm in Dallas. Physician-owned business associations or partnerships that are involved in the physicians’ medical practice are “physicians” under Chapter 74.
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Ralph D. Huston, attorney for the Koches and principal in the Huston Law Firm in Houston, did not return a telephone call seeking comment by presstime on May 4. According to the 5th Court’s opinion, the Koches filed suit against the Pro Path defendants in November 2004, alleging that they were negligent in failing to interpret accurately Rebecca Koch’s Pap smears, in failing to have the smears redone to obtain adequate samples and in failing to refer her for further diagnostic testing. Rebecca Koch now has “severe” cervical cancer despite her diligence in obtaining regular examinations and Pap smears, the Koches alleged in their brief to the 5th Court. As noted in the 5th Court’s opinion, the laboratories employed “cytotechs,” who performed the lab work but who were not physicians, not nurses and not licensed by the state of Texas. Justice Kerry FitzGerald, author of the opinion, wrote that a physician who was a partner in the laboratories would examine the results, if the testing indicated an abnormality, but the two reports of Rebecca Koch’s Pap smears show there was no physician involvement. After filing the suit, the Koches did not file an expert report stating the standard of care applicable to the laboratories, how the laboratories failed to meet that standard and the causal relationship between the failure and the harm to Rebecca Koch. Under �74.351, a plaintiff has 120 days after filing a health care liability claim to provide an expert report to each defendant named in a health care liability claim. The Koches argued in their brief to the 5th Court that Chapter 74 does not apply to the Pro Path defendants, because they are pathology laboratories, and pathology laboratories are not defined as “health care providers” under the statute. The Pro Path defendants asserted in their motion for dismissal filed with the 134th District Court that the Koches’ suit is a health care liability claim and that the expert-report requirements apply. The defendants argued that they fall under the Chapter 74 definition of physician, because they are limited partnerships owned by physicians. Definitions The 5th Court panel concluded that the “laundry list” of health care providers that the Legislature provided in Chapter 74 is not an exclusive list. In defining “health care provider,” the Legislature used the word “including,” which makes the list nonexclusive, FitzGerald wrote. Because the definition of health care provider doesn’t exclude pathology laboratories, the Legislature has not expressed an intent that those entities cannot fall under Chapter 74, according to the opinion. “Thus the application of the protections of Chapter 74 to a pathology laboratory that qualifies as a “physician’ does not create a conflict,” FitzGerald wrote. The panel also concluded that a “physician” need not be a “health care provider” to be entitled to the protections of Chapter 74. “To meet the definition of “physician,’ an individual must be licensed to practice medicine, and “physician’ entities must consist of individuals licensed to practice medicine,” FitzGerald wrote in the opinion. Justices Joseph Morris and Jim Moseley joined FitzGerald in the decision. “It’s wrongly decided,” Dallas plaintiffs attorney Paula Sweeney says of Koch. Sweeney, a partner in Howie & Sweeney, says an equally valid way to construe the word “including” in Chapter 74 is to construe it narrowly, as the courts construed Article 4590i. The Legislature passed Chapter 74 to protect health care providers who had been unable to obtain medical liability insurance, but the effect of the statute is to deprive citizens of their constitutional rights of access to the courts, Sweeney says. In that context, she says, courts should not extend what the Legislature has done any further than lawmakers specifically did. But Mike Pennick, an adjunct professor who teaches medical negligence law at Southern Methodist University Dedman School of Law, believes the 5th Court’s interpretation of Chapter 74 is correct. Pennick, a mediator of medical negligence claims, says it appears to him that the Legislature intended the statute to cover any group of physicians practicing together. “It’s clear that the court doesn’t think it matters that the work was done by cytotechs,” Pennick says. “There is no question that the group of physicians will be responsible for the cytotechs if they are negligent.” Referring to the Chapter 74 reforms, Pennick says, “Supposedly this was not supposed to be a trap for plaintiffs, but it is a trap. People who have meritorious claims are getting bounced because of these technicalities.”

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