Tennessee Supreme Court rules whether liens under the Hospital Lien Act attach to medical payment benefits paid pursuant to an insurance policy.

SHELBY COUNTY HEALTH CARE CORPORATION d/b/a REGIONAL MEDICAL CENTER v. NATIONWIDE MUTUAL INSURANCE COMPANY (Tenn. October 28, 2010)

Kevin L. Holt, injured in an automobile accident in Arkansas, was first taken by ambulance to an Arkansas hospital and then transported to the Regional Medical Center in Memphis, where he incurred $33,823.02 in expenses.

Shelby County Health Care Corporation, the operator of the Regional Medical Center, filed affidavits for a lien as prescribed by statute. Thereafter, Nationwide Mutual Insurance Company, which had medical coverage for Holt with limits of $5,000, paid $1,290 for ambulance services and $3,710 to the Arkansas hospital. Shelby County Health Care Corporation sued Nationwide for impairment of its lien, seeking as recovery the entire amount due for its medical services to Holt.

The trial court awarded $5,000 in damages. The Court of Appeals revised the amount of the judgment to $33,823.02. Because we have determined that liens under the Hospital Lien Act do not attach to medical payment benefits paid pursuant to an insurance policy, the judgment of the Court of Appeals is reversed and the cause is dismissed.

Opinion may be found at:
http://www.tba2.org/tba_files/TSC/2010/shelbycountyhccCORR_102810.pdf

TN Supreme Court reviews whether the lower courts properly dismissed vicarious liability claims against a hospital in a medical malpractice case.

JOANN ABSHURE ET AL. v. METHODIST HEALTHCARE-MEMPHIS HOSPITALS (Tenn. October 21, 2010)

This appeal involves a vicarious liability claim against a hospital based on the conduct of an emergency room physician. A patient and her husband filed a medical malpractice suit in the Circuit Court for Shelby County against a hospital and two physicians, one of whom had treated the patient in the hospital's emergency room. Among other things, the complaint broadly alleged that the hospital was vicariously liable for the conduct of its agents.

After the plaintiffs voluntarily dismissed their claims against both physicians for the second time, the hospital sought the dismissal of the vicarious liability claims on the ground that the plaintiffs' claims against its apparent agent, the emergency room physician, were barred by operation of law.

The trial court granted the hospital's motion, and the Court of Appeals affirmed the dismissal of the vicarious liability claims against the hospital. Abshure v. Upshaw, No. W2008-01486-COA-R3-CV, 2009 WL 690804, at *5 (Tenn. Ct. App. Mar. 17, 2009). We granted the Tenn. R. App. P. 11 application filed by the patient and her husband to determine whether their vicarious liability claims against the hospital should be dismissed under the facts of this case. We have determined that the lower courts erred by dismissing the vicarious liability claims against the hospital.

Opinion may be found at:
http://www.tba2.org/tba_files/TSC/2010/abshurej_COR_102110.pdf

Court reviews whether state or federal law protects hospital records from disclosure.

JOHN P. KONVALINKA v. CHATTANOOGA-HAMILTON COUNTY HOSPITAL AUTHORITY (Tenn. Ct. App. October 4, 2010)

This is the second time this case, filed by John P. Konvalinka ("the Petitioner") to force disclosure of public documents, has been before us. In the trial court's order that generated the first appeal, the court held that the records the Petitioner requested from Chattanooga-Hamilton County Hospital Authority ("the Hospital" or "Erlanger") were exempt from disclosure under state law, and pretermitted the question of whether they were exempt from disclosure under federal law.

On appeal, we held that the records were not protected from disclosure by state law and remanded for a determination of whether they were protected from disclosure by federal law. The Hospital attempted on remand to assert additional state law defenses to disclosure. The trial court held that the new state law defenses were outside the scope of the remand. It also held that federal law did not protect the documents at issue from disclosure. Accordingly, it ordered the Hospital to produce the documents. The Hospital appeals challenging both aspects of the trial court's judgment. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/konvalinkaj.pdf

Court reviews whether the exclusive remedy rule barred an employee's negligence suit

JAMES P. GRIFFITH, ET AL. v. JELLICO COMMUNITY HOSPITAL, INC. (Tenn. Ct. App. May 28, 2010)

Employee, whose employer provided services pursuant to a contract with hospital, sustained injuries from a fall while working on hospital’s premises. Employee subsequently filed a negligence action against hospital. The trial court permitted employer to intervene in the suit. Hospital filed a motion for summary judgment, and after an evidentiary hearing, the trial court found that hospital was the principal contractor pursuant to Tenn. Code Ann. section 50-6- 113 and the exclusive remedy rule barred employee's negligence suit. The trial court granted summary judgment in favor of hospital, and employee appealed. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/griffithj_052810.pdf

Supreme Court reviews whether records made in the ordinary course of a hospital's business are covered by the peer review privilege

KIMBERLY POWELL v. COMMUNITY HEALTH SYSTEMS, INC. ET AL. (Tenn. May 24, 2010)

This appeal involves the evidentiary privilege in the Tennessee Peer Review Law of 1967 [Tenn. Code Ann. section 63-6-219 (Supp. 2009)]. A former hospital employee filed suit in the Chancery Court for Bradley County against the hospital and an orthopaedic surgeon on the hospital's medical staff. During discovery, the former employee sought to depose the hospital's infection control director regarding the details of an investigation into postoperative nosocomial infections and her knowledge of whether the defendant surgeon had tested positive for infectious diseases. The hospital moved for a protective order on the ground that the requested information was privileged under Tenn. Code Ann. section 63-6-219(e).

The trial court declined to issue a protective order after determining that the information sought by the former employee was not privileged because it had been created in the regular course of the hospital's business and because the infection control director was the "original source" of the information. After granting the hospital an interlocutory appeal, a divided panel of the Court of Appeals affirmed the trial court. Powell v. Cmty. Health Sys., Inc., No. E2008-00535-COA-R9-CV, 2009 WL 17850 (Tenn. Ct. App. Jan. 2, 2009).

We granted the hospital's Tenn. R. App. P. 11 application for permission to appeal. We have determined that records received or made in the ordinary course of a hospital's business apart from the operation of a peer review committee are not protected by the peer review privilege in Tenn. Code Ann. section 63-6-219. We have also determined that documents prepared by or at the request of a peer review committee exercising its peer review function and documents prepared by third parties as part of the work of a peer review committee performing its peer review function are privileged. Finally, we have determined that the hospital did not waive its right to invoke the privilege in Tenn. Code Ann. section 63-6-219(e) with regard to the work performed by its infection control director in the context of a peer review proceeding.

Opinion may be found at:
http://www.tba2.org/tba_files/TSC/2010/powellk_052410.pdf

WADE concurring
http://www.tba2.org/tba_files/TSC/2010/powellk_CON_052410.pdf

TN Supreme Court reviews the Peer Review Law in a case involving services provided by various hospitals

LEE MEDICAL, INC. v. PAULA BEECHER ET AL. (Tenn. May 24, 2010)

This appeal involves the application of the Tennessee Peer Review Law of 1967 [Tenn. Code Ann. section 63-6-219 (Supp. 2009)] to a hospital system's business decision regarding the provision of vascular access services to patients in its member hospitals. The hospital system had customarily outsourced these services at several of its hospitals, but, following an audit, it decided to discontinue outsourcing the services and to begin providing them using nurses employed by its own hospitals.

After several of the system's hospitals cancelled their vascular access services contracts, the vendor that had been providing the services filed two suits in the Circuit Court for Sumner County against the manufacturer of the catheters used to provide the services and one of its employees, a staffing affiliate of the hospital system and two of its employees, and the chief nursing officer at one of the system's hospitals.

These suits, which were eventually transferred to the Circuit Court for Williamson County and consolidated, sought damages under numerous theories based on the vendor's allegations that the defendants, all of whom had played a role in the audit, had disparaged the manner in which it had been providing the vascular access services and had improperly interfered with its contracts. During discovery, the vendor sought copies of various records relating to the audit of its services. The defendants claimed that these records were covered by the privilege in Tenn. Code Ann. section 63-6-219(e). After reviewing the disputed records in chambers, the trial court determined that most of the requested records were covered by the privilege. The trial court also granted the vendor permission to pursue an interlocutory appeal to the Court of Appeals; however, the Court of Appeals declined to accept the appeal.

We granted the vendor's Tenn. R. App. P. 11 application to address the trial court's interpretation and application of Tenn. Code Ann. section 63-6-219(e). We have determined that the trial court interpreted the privilege in Tenn. Code Ann. section 63-6-219(e) too broadly. Therefore, we vacate the portions of the trial court's discovery orders applying the privilege in Tenn. Code Ann. section 63-6-219(e) and remand the case to the trial court for further proceedings.

Opinion may be found at:
http://www.tba2.org/tba_files/TSC/2010/leemedical_052410.pdf

WADE dissenting
http://www.tba2.org/tba_files/TSC/2010/leemedical_DIS_052410.pdf