Indiana Supreme Court to examine reach of med mal statute

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The Indiana Supreme Court has granted transfer to a dispute between health care providers, tackling the question of whether the state’s Medical Malpractice Act extends beyond claims brought by injured patients.

The med mal dispute began when the hospital Franciscan Alliance sued the radiology group Lake Imaging for indemnification of a $187,001 malpractice settlement it reached with a deceased patient’s relatives. The Johnson Superior Court agreed with Lake Imaging that Franciscan’s claim was one of medical malpractice and subsequently dismissed it because the hospital did not obtain an opinion from the medical review panel before filing suit, as required by the MMA.

The Indiana Court of Appeals affirmed in Lake Imaging, LLC v. Franciscan Alliance, Inc., f/d/b/a/ Saint Margaret Mercy Health Centers, and ProAssurance Indemnity Company, Inc., 20A-CT-1490. The panel pointed to provisions in the MMA referencing a “claimant” rather than “patient.”

“These provisions leave us convinced the legislature did not intend to limit the MMA’s coverage to the ‘typical’ medical-malpractice action — one brought by an injured patient or the representative of an injured patient,” Judge Nancy Vaidik wrote for the Court of Appeals in May. “Rather, the language of these statutes is broad enough to include an indemnification claim by one healthcare provider against another healthcare provider, if the claim is based on the alleged medical negligence of the latter.”

In its petition for transfer, Franciscan argued the appellate court’s ruling could require health care providers to sue other health care providers for contractual indemnification before any loss has actually been suffered.

“The Court of Appeals’ opinion promotes the premature and unnecessary filing of claims against health care providers for fear that contractual rights to indemnification will be lost before they are even triggered,” Franciscan argued in its petition. “This will expose health care providers to more lawsuits and upend health care contracting in Indiana.”

Lake Imaging countered Franciscan’s contention that this is a case of first impression. The radiologists highlighted Cutchin v. Beard, 2021 Ind. LEXIS 442, 2021 WL 3204490 (Ind. June 30, 2021).

“Franciscan shifted the focus of its Petition to Transfer from the issue it raised in the Court of Appeals of third parties as statutory patients to the applicable statue of limitations and the parties’ freedom to contract,” Lake Imaging asserted in its response brief. “However, once Cutchin determined that third party claims based on an act of malpractice fell within the MMA, the Act’s statute of limitations applies.”

In all, the court denied 14 other petitions for transfer.

The justices concurred on all the denials except in an adoption case, J.J., et al. v. C.B., et al., 20A-AD-2102. Justice Steven David wrote a dissent, which Chief Justice Loretta Rush joined, arguing the case circumvented “the established CHINS procedures for terminating parental rights.”

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