HEALTH INDUSTRY ONLINE - Henderson v. Medical Center Enterprise: Admissibility of CMS Investigation Materials in Private EMTALA Causes of Action

Under the Emergency Medical Treatment and Active Labor Act (EMTALA), Medicare-participating hospitals must provide a medical screening exam to any individual who presents to the emergency department requesting examination or treatment for a medical condition. The hospital is obligated to stabilize the condition or provide for an appropriate transfer regardless of the individual's ability to pay or Medicare/insurance status. EMTALA statutes apply to everyone seeking an emergency screening exam, and the main impact is on uninsured or underinsured patients who would be otherwise unable to afford medical care.

Congress created two separate enforcement mechanisms for EMTALA: (1) government enforcement by the Department of Health and Human Services (DHHS) and (2) the right to file private lawsuits by the affected patient. Although the Office of the Inspector General has the authority to fine the offending hospital or physician up to $50,000 per violation, more importantly from the hospital's perspective, the Centers for Medicare and Medicaid Services (CMS) may terminate the agreement that allows a hospital to receive Medicare and Medicaid funds if a violation has occurred and the hospital has not made sufficient changes such that CMS is assured that a similar violation will not occur in the future.

Where an EMTALA violation is suspected to have occurred, the regional office of the CMS conducts an investigation and survey of the hospital in an effort to fully determine the circumstances comprising and surrounding the alleged violation. If the investigation concludes that there was, in fact, a violation, the hospital is given the opportunity to address the issue, though a failure to do so can result in the loss of federal funding noted above.

In August of 2006, the United States District Court for the Middle District of Alabama's Southern Division released a Memorandum Opinion and Order in the matter of Henderson v. Medical Center Enterprise, Cause No. 1:05-cv-823-MEF. This was a private cause of action involving allegations made by Plaintiff Ginger Henderson against Medical Center Enterprise (MCE), a 131-bed acute care hospital in Enterprise, Alabama. Henderson, 38 weeks pregnant at the time, claimed that she presented to MCE's ER following a motor vehicle accident and that the nurse on duty told her that the on-call obstetrician would decide whether or not she would be seen, but that she would need to wait while the doctor was called. Henderson elected to leave MCE and went to a nearby hospital. She later filed suit against MCE, alleging violations of EMTALA. Independent of her claim, CMS conducted an investigation into the matter and concluded that MCE had violated a number of regulations and concluded that its Medicare certification would be terminated unless these were remedied. Ultimately, the hospital did address the deficiencies, and CMS withdrew its recommendation in light of these corrections.

In Henderson's suit, the hospital moved for summary judgment on her claims; in opposition to that motion, Henderson submitted materials consisting of the CMS investigation, which the hospital argued were inadmissible for a number of reasons: that the documents (1) were hearsay, (2) lacked trustworthiness, (3) contained legal conclusions, (4) offered expert opinions from non-designated individuals, (5) had not been authenticated, (6) comprised inadmissible subsequent remedial measures, (7) contained privileged peer review information, (8) contained prejudicial material that outweighed the documents' probative value, and (9) indicated that the recommendation of the hospital's termination from the Medicare program was withdrawn.

Despite these attempts by the hospital to keep the CMS investigation materials out of evidence, the Court concluded that the materials were, in fact, admissible and would be considered by the Court with regard to the Motion for Summary Judgment - except for those portions that contained legal conclusions and subsequent remedial measures, which would be disregarded and not made a basis for the decision. Otherwise, the Court ordered that the documents were admissible.

Among other things, the hospital argued that the materials lacked trustworthiness, due to the fact that CMS' recommendation to terminate MCE's Medicare certification was later withdrawn. However, the Court noted that the withdrawal was due only to the fact that the hospital had corrected the deficiencies cited and that it had made sufficient changes to its procedures such that CMS had "reasonable assurances that a similar violation [would] not recur." As such, the withdrawal did not indicate that the deficiencies originally noted were not accurate or valid, but rather that they had simply been addressed.

As to the claims of peer review privilege, the Court noted that the Federal Rules of Evidence established the boundaries of evidentiary privileges, and that the peer review privilege relied upon by MCE was contained in Alabama state laws, not Federal statutes or case law. The Court further noted that although the Federal Rules gave Courts the right to recognize new privileges, the majority of federal courts in other jurisdictions had declined to apply state-created peer review privileges in federal lawsuits - a trend that the Henderson Court was loath to reverse. As such, the peer review privilege would not apply to prevent the CMS materials from being admitted in Henderson.

This precedent represents a potentially troubling reality for hospitals that have dealt with a CMS investigation along with a private cause of action for an alleged EMTALA violation. Even where a reasonably minor deficiency is cited and quickly corrected - with no further consequences arising from the investigation - the plaintiff may be able to admit such investigative materials into evidence and allow the jury to consider them during its deliberations.

On the other hand, based on the reasoning of the Henderson court, where a CMS investigation was conducted and resulted in no deficiencies or problems, the hospital may be able to introduce those conclusions into evidence, which would support the defense experts' opinions that no violation ever occurred. Properly presented by defense counsel, the findings of CMS - the Federal agency charged with enforcement of the EMTALA statutes - that indicate that no violations had occurred could be persuasive evidence in such a case.