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While acknowledging that a majority of Pennsylvania common pleas court cases have disallowed corporate negligence claims against non-hospital physician groups, a common pleas court judge has concluded that such a limitation is not required by the law. “Even prior to the advent of corporate liability, Pennsylvania courts recognized that hospitals and professional corporations have a duty to monitor the competency of their health care professionals,” Lackawanna County Common Pleas Court Judge Terrence Nealon said in Oven v. Pascucci, PICS Case 00-1295 (C.P. Lackawanna June 9, 2000) Nealon, J. (17 pages). Nealon’s recent decision is contrary to that of many common pleas courts that have considered the issue. Without state appellate guidance, most trial courts have concluded that the corporate negligence doctrine is limited to hospitals and HMOs because such entities play a central role in the total health care of their patients. But Nealon rejected those cases, following the minority of courts that have decided to extend corporate negligence liability. LASIK SURGERY According to the opinion, Kathryn Oven was treating with optometrist Dr. Joseph Cimochowski, an employee of Northeastern Eye Institute. Cimochowski referred Oven to Dr. Stephen Pascucci, a fellow NEI employee, to undergo LASIK, or vision correction, surgery. Oven claims that when Pascucci performed the surgery, he made an improper shallow and thin cut, which caused blurred vision in Oven’s right eye. Pascucci attempted remedial surgery about two months later, and, according to Oven, during a post-operative visit, Cimochowski negligently removed the bandage lens after four unsuccessful attempts. Oven claims that she has experienced double and sometimes triple vision as a result of the improper removal of her lens bandage and has been required to undergo additional surgeries in an effort to correct her vision problems. Oven filed a claim for medical malpractice against Pascucci and Cimochowski and a corporate negligence claim against NEI. Specifically, she claims NEI failed to provide adequately trained personnel to care for its patients; failed to provide adequate and required equipment and medical devices for the safe performance of the LASIK surgical procedure; failed to provide adequate supervision of its employees and agents; and failed to have policies and protocols in place controlling and governing the performance and timing of LASIK and other surgical procedures and the proper removal of bandage lenses. NEI filed preliminary objections seeking the dismissal of the corporate negligence claim against NEI, claiming Pennsylvania law does not recognize a cause of action of independent negligence against a physician-owned and operated entity. After a review of the current law on the issue, Nealon concluded the cause of action could go forward against NEI. STATE OF THE LAW A hospital’s liability for corporate negligence was established by the Pennsylvania Supreme Court in the case of Thompson v. Nason, 591 A.2d 703 (Pa. 1991). Under Thompson, a hospital is liable if it fails to “uphold the proper standard of care owed to the patient, which is to ensure the patient’s safety and well-being while at the hospital.” The Thompson court articulated four non-delegable duties that the hospital owes directly to a patient: * The duty to use reasonable care and maintenance of safe and adequate facilities and equipment. * The duty to select and retain only competent physicians. * The duty to oversee the patient care by all persons who practice medicine within its walls. * The duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for patients. The state Supreme Court has not spoken on the reach of the corporate negligence doctrine since Thompson. But in Shannon v. McNulty, the Superior Court extended the Thompson decision to apply the corporate negligence doctrine to health maintenance organizations. The intermediate appeals court based its decision in Shannon on the reasoning that HMOs can be providers of healthcare services and not just payers for services. “In adopting the doctrine of corporate liability the [Supreme] Court recognized ‘the corporate hospital’s role in the total health care of its patients,’” Judge Joan Orie Melvin wrote. “Likewise, we recognize the central role played by HMOs in the total health care of [their] subscribers.” But less than two weeks after the Superior Court handed down Shannon, the U.S. District Court for the Eastern District of Pennsylvania declined to apply the doctrine to an optometrist’s office. Senior Judge Louis H. Pollak said in Milan v. American Vision Center that the corporate negligence doctrine had thus far been limited to hospitals and HMOs because of their unique “gatekeeping” roles in the total health care of their patients. “Optometrists’ offices play no such role in patients’ lives,” Pollak wrote. “Like doctors’ offices in general, a patient entering an optometrists’ office does not forfeit – legally or practically – the ability to turn elsewhere for medical care.” COMMON PLEAS CASES As Nealon acknowledged, by and large, Pennsylvania trial courts confronted with the issue have likewise limited the application of the corporate negligence doctrine to hospitals. * In Dowhouer v. Judson, a three-judge panel of the Dauphin County Common Pleas Court refused to extend Thompson liability to the Cardiovascular Surgical Institute – a medical group which treated the plaintiff on a referral from her family physician for diagnosis and treatment of peripheral vascular disease in her legs. Similar to the circumstances in Milan, “the facts in the instant case do not indicate that plaintiff was required to commit to a single health care provider for treatment of her heart or the circulation in her legs,” Judge Richard A. Lewis wrote. “… Additionally, CSI did not play the central role in the total health care of plaintiff.” * In Brewer v. Geisinger Clinic Inc., PICS Case No. 00-0686 (C.P. Lackawanna March 31, 2000) Cottone, S.J. (10 pages), Lackawanna County Judge John S. Cottone declined to extend corporate negligence liability to the Geisinger Clinic. Cottone noted that his colleague on the Lackawanna County bench, Judge Carmen Minora, in Dibble v. Penn State Geisinger Clinic Inc., PICS Case No. 99-1509 (C.P. Lackawanna June 27, 1999) Minora, J. (30 pages), “was confronted with the same issue.” “After examination of the appellate courts’ rationale for applying corporate liability to hospitals and HMOs, Judge Minora concluded that despite a clinic’s involvement in the delivery of health care to a patient, it ‘cannot be considered a comprehensive health care center such as a hospital, nor can it be construed to play a central role in the total health care of its subscribers,’” Cottone said. Since a clinic is only a “primary care facility,” as opposed to a “comprehensive medical care facility,” Minora declined to extend corporate negligence to that entity. “This court, although not required, adopts our honorable colleague’s analysis of corporate liability as it relates to clinics,” Cottone concluded. * In Johnson v. Wiseman, PICS Case No. 99-0419 (C.P. Bradford Dec. 22, 1998) Mott, J. (12 pages), Bradford County Common Pleas Court Judge John C. Mott declined to extend the doctrine to a health clinic. * In Remshifski v. Kraus, PICS Case No. 95-4593 (C.P. Monroe Sept. 8, 1995) Miller, J. (7 pages), Monroe County Common Pleas Court Judge Linda Wallach Miller refused to extend the corporate liability theory to two non-hospital defendants, Coordinated Health Services and Monroe Emergency Physicians. LIABILITY EXTENDED Notwithstanding the cases holding to the contrary, Nealon said, along with the Superior Court’s decision in Shannon, there were other common pleas cases to support extending Thompson beyond hospitals. * In Risser v. Pepper, PICS Case No. 96-6383 (C.P. Dauphin March 29, 1996) Kleinfelter, J. (6 pages), a three-judge Dauphin County Common Pleas Court panel ruled that a woman could sue a dentist partnership under a corporate negligence theory because the partner who operated on her wasn’t certified to perform the surgery. Judge Joseph Kleinfelter wrote for the court that “it is apparent to all that in this day of rapid changes in the delivery of health care that many surgical procedures are being performed on an outpatient basis by various forms of medical ‘groups,’ ‘clinics,’ ‘associations’ and ‘partnerships.’” “We are not prepared today to say as a matter of law that plaintiffs are barred in a negligence claim against [Central Pennsylvania Oral Maxillofacial Surgeons] for liability for failing to hire or accept into partnership only those physicians who are competent either by board certification or experience.” * In Patel v. Himalayan International Institute of Yoga Science and Philosophy, CV-94-1118, Vanaskie, J. (M.D. Pa. Sept. 30, 1996), a participant in the holistic health program at the Himalayan Institute brought a Thompson claim against the institute and physicians affiliated with its “self-transformation program.” In denying the request to dismiss the corporate negligence claim, Chief U.S. District Court Judge Thomas I. Vanaskie said Thompson is not limited solely to hospitals and may extend to the institute which held itself out as providing health care services. * In Rivera v. Lawrence, PICS Case No. 98-2651 (C.P. Monroe Oct. 9, 1998) Cheslock, J. (18 pages), Monroe County Common Pleas County Judge Jerome P. Cheslock allowed a corporate liability claim against a physician-operated professional corporation. “Defendants created a professional corporation for the purpose [of] diagnosing and treating patients,” Cheslock wrote. “Plaintiffs may sustain a cause of action against defendants so long as they can show that defendants breached the duties enunciated in Thompson.” * And in Fox v. Horn, PICS Case No. 00-1480 (E.D. Pa. Jan. 21, 2000) Buckwalter, J. (9 pages), U.S. District Court Judge Ronald L. Buckwalter expanded Thompson liability to a medical professional corporation that had contracted to provide medical services at the State Correctional Institute at Graterford. An inmate at the prison sued Correction Physician Services Inc., challenging CPS’s absence of policies with regard to the medical treatment of inmates and the hiring of doctors. The U.S. District Court for the Eastern District predicted that the Pennsylvania Supreme Court would extend corporate liability to the medical group. THOMPSON APPLIED Nealon concluded that Oven’s allegations, if proved, could satisfy a corporate negligence claim under Thompson. First, Oven claimed the equipment used to perform the LASIK surgery at NEI’s site was not properly provided and maintained by NEI. “Based upon Oven’s allegations, it is conceivable that NEI violated the first duty articulated in Thompson by neglecting to properly calibrate and maintain the suction ring, microkeratome or excimer laser used during Oven’s LASIK procedure, as a result of which an improper ‘shallow and thin cut’ was made,” Nealon said. Oven also claimed NEI didn’t retain adequately trained personnel to perform the procedure and neglected to implement appropriate protocols for LASIK surgery and post-operative treatment, an alleged violation of the second Thompson duty. Even before Thompson, Nealon said, Pennsylvania courts recognized that professional corporations have a duty to monitor the competency of their health care professionals. Specifically, the court cited Kaskie v. Wright, 589 A.2d 213 (Pa. Super. 1991), in which the Superior Court dismissed a medical malpractice action against an alcoholic physician. The Kaskie court said, “Matters such as personal weaknesses and professional credentials of those who provide health care are the responsibility of … the professional corporations who offer their services.” “ Kaskie clearly states that if a professional corporation does not satisfy its duty to retain and offer only competent medical personnel, an injured patient may recover from that corporation for negligence,” Nealon wrote. Finally, Nealon said, Oven sufficiently alleged a breach of the fourth duty under Thompson, the duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for patients. “If the attending physicians merely followed NEI policies by the manner in which they operated on Oven and treated her post-operatively, liability could be imposed upon NEI,” the court said. VICARIOUS LIABILITY While Nealon went through a lengthy analysis in finding that corporate liability may extend to NEI, in the end, he said that wasn’t necessary. “Even if NEI cannot be held corporately negligent, its preliminary objections should be denied since NEI may nonetheless be vicariously liable for the actions of Dr. Pascucci and Dr. Cimochowski,” Nealon wrote. Since Oven claimed the two doctors were shareholders and agents of NEI, “NEI may be held accountable for their alleged negligence based upon the principle of respondeat superior,” he said.

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