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October 15th, 2015
On September 29, 2015, the New Jersey Supreme Court held that a physician’s failure to disclose to a patient that the physician does not maintain statutorily required medical malpractice insurance coverage does not give rise to a claim for the physician’s failure to secure the patient’s informed consent prior to performing a medical procedure which results in injury to the patient. In Jarrell v. Kaul, the New Jersey Supreme Court was presented with a situation where an anesthesiologist, Richard A. Kaul, M.D., performed a spinal fusion surgery on James Jarrell in October 2005 in an attempt to alleviate Mr. Jarrell’s chronic back pain. At the time of the October 2005 surgery, Dr. Kaul’s medical malpractice insurance policy expressly excluded coverage for spinal surgical procedures. Not only did the October 2005 surgery not alleviate Mr. Jarrell’s pain, his pain increased and he began to experience drop foot. After examination by a board certified neurologist revealed that improperly placed screws from the October 2005 surgery were pinching a nerve, the neurologist performed a second surgical procedure on Mr. Jarrell in January 2006 to remove and replace the fixation devices implanted by Dr. Kaul.
Mr. Jarrell and his wife filed suit against Dr. Kaul and the surgical center where the October 2005 procedure was performed asserting medical malpractice/negligence claims and several claims stemming from Dr. Kaul’s failure to possess the statutorily required medical malpractice insurance coverage, including a claim for failure to obtain informed consent and for the surgical center’s permitting Dr. Kaul to perform the procedure at the facility. New Jersey, like Pennsylvania [40 P.S.§1303.711], requires physicians to provide proof of medical malpractice insurance or an approved self-funded alternative plan to compensate victims of medical malpractice in order to obtain and maintain a license to practice medicine in the state. The trial court refused to recognize any claim relating to Dr. Kaul’s failure to comply with financial responsibility statutes or his failure to disclose to Mr. Jarrell that he did not possess the statutorily required insurance and dismissed all claims, with the exception of the pure medical negligence claim, prior to trial. After the jury found Dr. Kaul negligent and awarded $500,000 in damages to Mr. Jarrell for his pain, suffering, and disability, and $250,000 to his wife for loss of consortium, the Jarrells appealed the pretrial dismissal of their remaining claims.
In a partial victory for victims of malpractice, the New Jersey Supreme Court did unanimously reinstated the Jarrells’ claims against the surgical center finding the surgical center had a continuing duty to ensure that any physician granted privileges to surgical procedures at its facility maintained the required insurance and to withhold privileges to any physician who does not. The court declined to adopt a strict liability standard for such claims; instead holding that an injured patient is required to prove the facility was negligent in verifying the physician’s continuing compliance with statutory licensing requirements such as maintenance of insurance. This partial victory was tempered, however, by a 5-2 majority of the court’s refusal to recognize that a patient has a right to know that a physician does not maintain medical malpractice liability insurance prior to consenting to treatment by the physician, particularly where the failure to maintain such insurance violates licensing laws!
A physician is legally required to explain the risks and benefits of proposed treatment options and obtain the patient’s informed consent to a course of action before proceeding. Ordinarily, this requires a disclosure of the risks associated with the recommended procedure and alternative procedures or therapies. Most people would agree that a physician’s ability to compensate a patient in the event of injury caused by the physician’s negligence is a material information impacting the patient’s decision to allow the physician to proceed in executing the treatment plan. Indeed, an Ohio statute requires physicians practicing medicine not otherwise immune from civil liability to provide written notice to patients that the physician is uninsured prior to performing nonemergency services. O.R.C §4731.143. Five of the seven New Jersey Supreme Court Justices in Jarrell, however, disagree that a patient has the right to know his physician is uninsured for the treatment being provided to the patient.
The majority in Jarrell found that a physician’s financial responsibility and compliance with licensing laws are not material facts impacting a patient’s ability to provide informed consent to a treatment plan, including surgery. Upholding the dismissal of the Jarrells’ informed consent claim and finding it non-viable under New Jersey law, the majority callously stated “To be sure, a patient who has been injured due to negligent care by an uninsured physician has sustained a financial loss, but such a loss is not the injury that the informed consent doctrine ever contemplated.” The absurdity of the majority decision is made readily apparent by the dissenters’ synopsis of the case: “The facts here present the quintessential case of lack of informed consent. Dr. Kaul did not have the medical malpractice insurance required by law to perform the invasive surgical procedure on his patient, plaintiff James Jarrell. Performing the procedure without the requisite insurance constituted professional misconduct. Yet, Dr. Kaul never explained any of this to his patient, presumably because plaintiff never would have agreed to the procedure had he been fully informed. Dr. Kaul failed to disclose material facts to his patient. He denied plaintiff the right to decide whether a financially incompetent—or worse yet, a professionally incompetent—physician should perform invasive surgery on him.”
The tort reform assault of the last decade or two has resulted in far too many restrictions on a person’s ability to be compensated for injuries caused by the negligence of another, particularly in the area of medical malpractice. At times, “compromises” were made which, in exchange for restrictions on a patient’s ability to recover for injuries caused by medical malpractice, requirements were imposed upon physicians to maintain a certain level of medical malpractice liability insurance. For example, In West Virginia, a physician must provide proof of a malpractice insurance or a self-funded plan in order to obtain the protections of statutory damages caps. W.Va. Code §55-7B-2(j); W. Va. Code § 55-7B-8. As claims accruing after enactment of statutory restrictions on medical malpractice claims continue to mature, Jarrell’s informed consent issue is likely to be addressed in other jurisdictions, including West Virginia and Pennsylvania. Hopefully, when the informed consent issue is addressed in other jurisdictions, the courts will follow the lead of the Jarrell dissent and recognize that “a physician cannot hide material facts and that the patient has a right to make critical choices concerning his health”, choices which include refusing to permit uninsured physician to perform surgery on the patient.
