Calif. Supreme: Malpractice Damage Cap Protects Unsupervised Physician Assistants

California’s $250,000 cap on non-economic damages in medical malpractice lawsuits applies to actions by physician assistants even if they are not properly supervised by a licensed physician, the California Supreme Court ruled.

In a decision Thursday, the high court rejected a plaintiff’s argument that the cap on damages adopted by the state legislature in 1975 did not apply to her case because the physician assistants were not acting within the scope of practice allowed by state law. Professionals who perform procedures outside their scope of practice are exempt from the protections afforded by the Medical Injury Compensation Reform Act.

The Supreme Court said the two accused physician assistants are still protected by MICRA because they had valid delegation of service agreements in place, even if the physicians who delegated those services didn’t actually perform any supervision.

“To be sure, there are reasonable policy arguments for excluding physician assistants who perform medical services without actual supervision from a cap on non-economic damages, and the Legislature is well equipped to weigh and reweigh the competing policy considerations,” the opinion says. “But our role is confined to interpreting the statute before us in the manner that comports most closely with the Legislature’s purpose in enacting MICRA.”

Marisol Lopez filed a wrongful death lawsuit against Drs. Glenn Ledesma and Bernard Koire and physician assistants Suzanne Freesemann and Brian Hughes after her daughter was diagnosed with skin cancer. Ledesma had signed a delegation of services agreement with Feesemann. Koire had signed a DSA with Hughes.

Lopez brought her daughter, Olivia Sarinana, to one of Ledesma’s California Dermatology clinics in the Los Angeles area in 2010, after she noticed a dark spot on the eight-month-old girl’s scalp. Hughes performed a biopsy and determined the lesion was “benign.”

Lopez brought Olivia back to the clinic again in June 2011 after the lesion grew back. Freeseman diagnosed the blemish as a “wart” and recommended that liquid nitrogen be used to remove the growth. Dr. Koire, a plastic surgeon, concurred. A general surgeon removed the legion in December 2011.

In early 2013, Lopez found a growth on her daughter’s neck. Another doctor diagnosed the mass as “metastatic malignant melanoma.” Olivia died in February 2014.

Lopez filed a malpractice suit against the doctors, their physician assistants and others in 2013, before her daughter died. She later amended the action to allege wrongful death.

The Los Angeles County Superior Court found the doctors and their physician assistants were liable for their negligence in diagnosing Olivia and awarded $11,200 in economic damages. The trial court found the Lopez’s non-economic damages were $4.25 million, but reduced the amount awarded to $250,000 because of the MICRA cap.

Lopez appealed, arguing that Freeseman and Hughes were not protected by the cap because they were operating outside the scope of practice allowed by their medical licenses, which require that they be supervised by a physician. The trial court refused to waive the cap even though it had concluded in its findings that Ledesma and Koire did not actually provide any supervision at the dermatology practice.

“They were functioning autonomously and knew it,” Lopez’s attorney said in a petition for appellate court review. “Neither of the allegedly supervising physicians were actively practicing medicine. Both of the alleged supervising-physicians were disabled.”

The panel of the 2nd District Court of Appeal affirmed the trial court’s decision in a split decision. On appeal to the Supreme Court, the California Medical Association and other groups representing medical providers filed an amicus brief arguing that the trial court ruling should be upheld.

“Exempting such a broad group of cases would contravene the Legislature’s intent in enacting MICRA: to reduce health care providers’ liability for noneconomic damages, thereby reducing medical malpractice insurance costs and increasing access to health care,” the brief states.

During oral arguments before the Supreme Court, attorney Stuart Esner said that physician assistants who treat patients without supervision by licensed doctors are clearly acting outside the scope of their practices.

“A physician assistant who practices autonomously is, one, practicing medicine without a license, and two, is guilty of a crime,” Esner said. “Why is that? Because the legislature has determined that physician assistants do not have the training or qualifications to safely treat and examine patients absent physician supervision.”

Associate Justice Goodwin Liu interrupted Esner to ask whether his argument would result in an “odd result.” Damages caused by physicians would be capped, but there would be no cap on damages caused by physician assistants.

The Supreme Court returned to that theme in its opinion, which was written by Liu.

“Such an exemption would expose physician assistants and, through vicarious liability, their supervising physicians, to unlimited liability for noneconomic damages in personal injury and wrongful death cases across the board—an outcome at odds with the central policy underlying the legislative program,” the opinion says.

Los Angeles malpractice attorney Steven B. Stevens filed an amicus brief on behalf of the Consumer Attorneys of California urging the Supreme Court to find the physician assistants were exempt from the damages cap. Stevens said in an email Friday that “neither physician was exercising any supervision, review, or control over the care and treatment that the assistants were delivering to patients.”

“Once more, the Medical Injury Compensation Reform Act, enacted almost a half-century ago, has failed to protect and compensate patients,” Stevens said. “This case is another example of the urgent need to fix and reform laws that protect negligent health care providers instead of patients.”

Attorneys for Freesemann and Hughes could not be reached for comment.

California voters may have a chance to change the law. A ballot initiative that would increase the non-economic damages cap to account for inflation since 1975 has qualified for the Nov. 8 ballot, according to the California Secretary of State’s Office. The initiative would also allow judges and juries to waive the cap entirely for cases involving death and permanent disability. The state’s legislative analyst estimates that the initiative, if passed, would increase state and local government health care costs from the “low tens of millions of dollars to the high hundreds of millions of dollars annually.”

Ledesma and Koire are no longer practicing medicine. Koire is now deceased, according to California Medical Board records.

The Medical Board revoked Ledesma’s medical license in 2015 for fraudulently billing insurers for services that were never performed. He also defrauded disability insurers by filing claims stating that he was unable to work even while managing several medical clinics scattered around the Los Angeles area, the board’s findings state.

Investigators for the California Department of Insurance arrested Ledesma on insurance fraud charges in March 2015, according to a report by the California Statewide Association of Criminal Investigators. The department said from 2008 to 2013, Ledesma treated more than 2,900 patients while simultaneously collecting $1,605,464 in disability benefits.