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1 IN THE SUPREME COURT OF FLORIDA FLORIDA SOCIETY OF PATHOLOGISTS ) on behalf of its members, AMERIPATH ) FLORIDA, INC., and RUFFOLO, HOOPER ) & ASSOCIATES, M.D., P.A. ) ) CASE SC02- Plaintiffs/Petitioners, ) 5th DCA CASE ) v. ) ) CENTRAL STATES, SOUTHEAST AND ) SOUTHWEST AREAS HEALTH AND ) WELFARE FUND, ) ) Defendant/Respondent. ) ) PETITIONERS JURISDICTIONAL BRIEF On Review From The Fifth District Court of Appeal Sylvia H. Walbolt Jack R. Bierig Florida Bar No Richard D. Raskin Joseph H. Lang, Jr. SIDLEY AUSTIN BROWN & WOOD Florida Bar No Bank One Plaza CARLTON FIELDS, P.A. Chicago, Illinois One Progress Plaza (312) (phone) Suite 2300 (312) (telecopier) St. Petersburg, FL (727) (phone) (727) (telecopier) Attorneys For FLORIDA SOCIETY OF PATHOLOGISTS, on behalf of its members, AMERIPATH FLORIDA, INC., and RUFFOLO, HOOPER, & ASSOCIATES, M.D., P.A.
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3 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF ARGUMENT... 3 ARGUMENT... 4 CONCLUSION... 9 CERTIFICATE OF SERVICE AND COMPLIANCE APPENDIX Central States, Southeast & Southwest v. Florida Society of Pathologists, 824 So. 2d 935 (Fla. 5th DCA 2002)... A1 i
4 TABLE OF AUTHORITIES Case Under Review Central States, Southeast & Southwest v. Florida Society of Pathologists, 824 So. 2d 935 (Fla. 5th DCA 2002)... passim Conflict Case American Medical International, Inc. v. Scheller, 590 So. 2d 947 (Fla. 4th DCA 1991)... passim Other Case Central States v. Pathology Laboratories of Arkansas, 71 F.3d 1251 (7th Cir. 1995) , 8 Statutes (3), Fla. Stat.... 2, (4), Fla. Stat.... 2, 7 ii
5 STATEMENT OF THE CASE AND FACTS This case presents a direct and express conflict between the Fourth and the Fifth District Courts of Appeal regarding the propriety of the practice of billing patients for the professional component of clinical pathology services, i.e. the services of pathologists in directing medical laboratories to assure the timeliness and clinical reliability of each test result for each patient. In American Medical International, Inc. v. Scheller, 590 So. 2d 947 (Fla. 4th DCA 1991), the Fourth District viewed professional component billing of patients as a legitimate practice and upheld an award of both compensatory and punitive damages for tortious interference with the right of a pathologist to engage in this practice. By contrast, in the decision below, the Fifth District viewed professional component billing of patients as an inappropriate practice and reversed an injunction against tortious interference with the right of pathologists to engage in the practice. A. Professional Component Services As the Fourth District has noted, billing privately-insured patients for the professional component of clinical pathology procedures is the established billing practice of pathologists in Florida. Scheller, 590 So. 2d at 949. Such billing reflects the services of pathologists in setting up test protocols, calibrating the equipment and supervising the testing, and, if necessary, interpreting the results and consulting with treating physicians. See Central States v. Pathology 1
6 Laboratories of Arkansas, 71 F.3d 1251, 1252 (7th Cir. 1995). The practice of professional component billing spreads the costs of pathologist direction of a laboratory across all patients whose specimens are tested in the laboratory and requires the pathologist to charge each patient the same amount for the same test, regardless of how much time he had to spend on it. Scheller, 590 So. 2d at 949. In fact, the Florida Legislature has included, in the context of HMOs, professional clinical pathology laboratory services within the definition of "[c]omprehensive health care services," see (4), Fla. Stat., and has stated that "[c]linical laboratory examination[s]" include the oversight of laboratory services. See (3), Fla. Stat. B. This Case This case arises out of statements by defendant Central States, Southeast and Southwest Areas Health and Welfare Fund to its insureds that billing patients for professional component services is improper and fraudulent. Relying on Scheller, the Circuit Court found that these statements violated the Florida Deceptive and Unfair Trade Practices Act ( et seq., Fla. Stat.) and constituted tortious interference in violation of Florida common law. The Fifth District reversed. It stated that patients are not legally obliged to pay for professional component services, 824 So. 2d at 940, and that efforts to interfere with the practice of billing for such services are not tortious. Id. 2
7 3
8 SUMMARY OF ARGUMENT This Court has jurisdiction to review the decision below. Art. V, 3(b)(3), Fla. Const. That decision expressly and directly conflicts with the decision of the Fourth District in American Medical International, Inc. v. Scheller, 590 So. 2d 947 (Fla. 4th DCA 1991) on the validity under Florida law of the practice of pathologists to bill patients for professional component services for those patients. The Fourth District viewed professional component billing of patients as a legitimate practice and upheld an award of both compensatory and punitive damages for tortious interference with the right of a pathologist to engage in this practice. By contrast, the Fifth District viewed professional component billing of patients as an inappropriate practice and reversed an injunction against tortious interference with the right of pathologists to engage in the practice. This Court should exercise its discretion to review this case. The decision below has disrupted settled expectations regarding the established billing practice by pathologists in Florida for their services to patients. In addition, the decision casts doubt on the ability of patients to hold pathologists legally responsible for injuries resulting from erroneous reporting of lab test results. If pathologists who direct laboratories have no professional relationship with patients whose specimens are analyzed in those laboratories, 824 So. 2d at 939, then the existence of a physician-patient relationship that is necessary to support a malpractice action 4
9 against the pathologist who supervises the laboratory technicians is questionable at best. ARGUMENT I. The Court Has Jurisdiction To Review This Case The decision of the Fifth District in this case expressly and directly conflicts with the decision of the Fourth District in Scheller. In Scheller, the Fourth District recognized that professional component services are a medical service for patients. 590 So. 2d at 950 (... Dr. Scheller was the one rendering the medical service ). In this case, by contrast, the Fifth District characterized professional component services as pathologists overhead. 824 So. 2d at 939 ( Certainly, we see nothing that obliges a patient to pay for what might be characterized as the pathologists overhead... ). The Fourth and Fifth Districts have taken diametrically opposed positions on professional component billing. Approving this practice, the Fourth District noted: If a test result was normal, the pathologist might never even see it. An abnormal test result might take hours or days of the pathologist s time. However, the pathologist was required to charge each patient the same amount for the same test, regardless of how much time he had to spend on it. In this way, the cost of the professional services for abnormal tests was spread over all the pathology tests performed on the patients.... Scheller, 590 So. 2d at 949. Disapproving the practice, the Fifth District noted that pathologists who are responsible for timely and accurate test results for patients 5
10 are not in the process of offering pathology services to those patients. 824 So. 2d at 940. The Fourth District noted that pathologists were allowed to bill for a professional component on clinical tests performed on their patients, even if the pathologist did not review the test. 590 So. 2d at 949. It upheld an award of both compensatory and punitive damages to Dr. Scheller based on his loss of income from bills to patients for such services. In contrast, the court below stated that where a pathologist does not personally review a laboratory test, the patient is not legally obliged to pay for professional component services. 824 So. 2d at 940. Under this decision, the award of damages in Scheller simply cannot be justified. If the patient is not legally obliged to pay bills for professional component services, such bills cannot be the basis for an award of damages to a pathologist. Thus, the conflict between the two decisions is direct and express. Nevertheless, the Fifth District sought to distinguish the two cases. Scheller is distinguished from the instant case because the payors there insurers and Medicare did not object to paying the professional component. Scheller did not deal with the question here: whether a patient who has received no direct, hands-on services from the pathologist legally is obliged to pay a bill for the professional component. 824 So. 2d at 939. Neither of these purported distinctions harmonizes the two decisions. First, the presence or absence of insuror objection does not speak to whether a patient is legally obliged to pay for professional component services. 6
11 Indeed, if insuror objection were the touchstone, patients would not have to pay for a lot of services performed by physicians. Second, examination of the Scheller decision demonstrates that that decision was predicated on a legal right of a pathologist to be paid by patients for professional component services even if the pathologist did not review the test. 590 So. 2d at 949. Patients in Orlando and Daytona Beach are not legally obliged to pay for professional component services of pathologists who direct the laboratories in which their specimens are analyzed solely on the basis of the services performed by these pathologists. Patients in Ft. Lauderdale and Palm Beach, by contrast, are legally obliged to pay for these services. Yet, these patients have equally received the benefit of the clinical pathology services in question. This Court has jurisdiction under article V, section 3(b)(3) of the Florida Constitution to hear this case and resolve this conflict. II. The Court Should Exercise Its Jurisdiction To Review This Case The decision below raises issues of major consequence to pathologists and patients throughout Florida. That decision has severely undercut expectations of pathologists across this State with respect to billing and compensation for professional component services. The Fourth District observed in 1991 that such billing is the established billing practice by pathologists in Florida. Scheller, 590 So. 2d at 949. In 1997, the Florida Department of Insurance concluded that [t]he 7
12 courts have ruled that the services performed by the pathologists are of value to the patients and are reimbursable to the pathologists. R. 10 9/15/00 Opp. Tab. 6. In fact, the Florida Legislature has included, in the context of HMOs, professional clinical pathology laboratory services within the definition of "[c]omprehensive health care services," see (4), Fla. Stat., and has stated that "[c]linical laboratory examination[s]" include the oversight of laboratory services. See (3), Fla. Stat. Yet, the decision below has now cast significant doubt on the ability of pathologists to be paid for their services by patients. If pathologists are not adequately compensated for their services in directing the lab for the benefit of patients, it is unfair to expect them to continue to perform those services. The decision below is of major significance in yet another way. In particular, the Fifth District held that there is no professional relationship between a pathologist and a patient unless the pathologist personally reviews a test result for the patient. 824 So. 2d at 939. It asserted that pathologists who supervise laboratory technicians and who are, in this capacity, responsible for test results are not offering pathology services to patients. 824 So. 2d at 940. One predictable consequence of these conclusions is that a patient who is injured by virtue of an erroneously reported laboratory result will have no legal recourse against the pathologist who was responsible for the result because there is no 8
13 physician-patient relationship between them. Alternatively, an inequitable situation exists in which pathologists have no legal right to bill patients for laboratory tests but can nonetheless be held legally accountable to patients for those tests. Neither result is sound law. The correct approach was taken in Scheller and in Pathology Laboratories of Arkansas. In that case, the Seventh Circuit ruled that pathologists who direct medical laboratories provide services that are of value to all patients whose specimens are tested in the laboratory. 71 F.3d at It concluded that, because the patient receives the benefit of those services, the patient is obligated to pay for those services. Id. at This Court should review this case and resolve the conflict in a manner consistent with Scheller and Pathology Laboratories of Arkansas. 9
14 CONCLUSION For the reasons set forth above, this Court should review this case. Respectfully submitted, Sylvia H. Walbolt Florida Bar No Joseph H. Lang, Jr. Florida Bar No CARLTON FIELDS, P.A. One Progress Plaza, Suite 2300 Post Office Box 2861 St. Petersburg, Florida (727) (phone) (727) (telecopier) -and- Jack R. Bierig Richard D. Raskin SIDLEY AUSTIN BROWN & WOOD Bank One Plaza Chicago, Illinois (312) (phone) (312) (telecopier) Attorneys For FLORIDA SOCIETY OF PATHOLOGISTS, on behalf of its members, AMERIPATH FLORIDA, INC., and RUFFOLO, HOOPER, & ASSOCIATES, M.D., P.A. 10
15 CERTIFICATE OF SERVICE AND COMPLIANCE I HEREBY CERTIFY that a true and correct copy of the foregoing jurisdictional brief and the attached appendix have been furnished to Denis L. Durkin, BAKER & HOSTETLER, LLP, Post Office Box 112, Orlando, Florida , and to James P. Condon, Post Office Box 5123, Des Plaines, Illinois, , by United States Mail this Eleventh day of October, I also certify that the jurisdictional brief has been prepared using Times New Roman 14-point type, proportionally spaced. Joseph H. Lang, Jr.
16 APPENDIX Central States, Southeast & Southwest v. Florida Society of Pathologists, 824 So. 2d 935 (Fla. 5th DCA 2002)... A1
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