Proceed with Caution: Applicability of Indiana Medical Malpractice Act Must Be Raised Early to Avoid Post-Panel Estoppel

What is required of plaintiffs to protect their right to challenge the applicability of the Indiana Medical Malpractice Act when there exists a question as to whether a claim arises from medical malpractice or ordinary negligence? The Indiana Court of Appeals answered this question in Cmty. Hosps. of Indiana, Inc. v. Aspen Ins. UK Ltd., a case in which two insurance companies paid damages to persons injured in a trucking collision and then sought to recover those damages from a medical provider who had cleared the at-fault truck driver to drive a commercial motor vehicle.

The insurance companies contemporaneously filed a proposed complaint for damages with the Indiana Department of Insurance (IDOI) and an anonymous state-court complaint for damages against Community Hospitals of Indiana, Inc. (Community). Community employed a nurse practitioner who performed a physical examination of the negligent truck driver prior to the collision pursuant to a contract between Community and the truck driver’s company that required qualified Community employees to conduct physical examinations based on Department of Transportation (DOT) requirements. The insurance companies alleged that Community was negligent in not notifying the truck driver’s company of a medical condition that would have precluded the truck driver’s ability to drive a commercial motor vehicle under Federal Motor Carrier Safety Administration (FMCSA) regulations, thus preventing the trucking accident.

Medical malpractice claims are subject to the Indiana Medical Malpractice Act (IMMA), which, among other things, caps damages, maintains the doctrine of contributory negligence, and requires that claims be submitted to medical review panels prior to being presented to a jury. However, the IMMA does not apply to all cases involving healthcare providers. If a healthcare provider’s negligence is unrelated to the promotion of a patient’s health or the exercise of professional expertise, skill or judgment, then it does not constitute medical negligence, but rather ordinary negligence, falling outside the scope of the IMMA. Indiana courts have noted that a case falls under ordinary negligence when the factual issues can be resolved by a jury without regard to the applicable standard of care. Alternatively, a case sounds in medical negligence when there is a causal connection between the conduct complained of and the nature of the patient-healthcare provider relationship.

In this case, the insurance companies prosecuted their claims before the IDOI and presented their claims to a medical review panel. The medical review panel found that Community failed to comply with the appropriate standard of care with respect to the receipt and/or review of relevant healthcare information, but that the conduct complained of was not a factor in the resultant damages, which the insurance companies alleged amounted to approximately $3,000,000.00.

After the medical review panel proceedings were concluded, Community raised numerous affirmative defenses in its answer to the insurance companies’ complaint, including a defense based upon the doctrine of estoppel, claiming that the insurance companies were estopped from denying that the limitations of the IMMA, including the monetary cap on damages, applied. The insurance companies filed a motion for summary judgment asking the trial court to find that Community’s affirmative defenses as to the applicability of the IMMA were unavailable. After the trial court entered summary judgment for the insurance companies, Community appealed.

The Indiana Court of Appeals held that the trial court erred when it granted summary judgment in favor of the insurance companies. Citing the Indiana Supreme Court decision in Manley v. Sherer, 992 N.E.2d 670 (Ind. 2013), the Court stated that the insurance companies cannot prosecute their case as if the IMMA applies and then raise the issue of its applicability after an unfavorable decision from the medical review panel.  Instead, the Court noted the companies had plenty of time to raise the issue of the applicability of the IMMA by filing a motion for declaratory judgment early in the proceedings.

This case serves as a caution that plaintiffs should promptly raise the issue of the applicability of the IMMA when there is a question as to whether the case falls under the IMMA and promptly seek declaratory relief from the Court.