State patient fund files claim against hospital


In a lawsuit that could have far-reaching implications, the state fund that provides umbrella coverage in medical malpractice cases has filed a counterclaim, saying that a hospital was negligent in training and supervision of its personnel, and hospital officials should be liable for some of the damages being sought by a man who suffered catastrophic injuries as a result of an erroneous procedure.

The case is so urgent and unusual that the Wisconsin Medical Society and the Wisconsin Hospital Association are weighing in before the case even goes to trial. The state organizations usually don’t file friends-of-the-court motions in such cases until a case reaches the state Supreme Court, said Ruth Heitz, general counsel for the medical society.

The Wisconsin Injured Patients and Families Fund was created by the Legislature some three decades ago. Hospitals in the state pay into the fund annually for malpractice damage coverage in cases that exceed $1 million.

In this case, the fund is contending that the hospital was negligent in training and supervising a medical resident and a technician who wrongly administered a spinal injection that caused catastrophic injuries, leaving the patient confined to a wheelchair and in need of around-the-clock care for the remainder of his life.

The medical bills of the patient, Larry A. Schultz, a former nuclear pharmacist, now 57, have already exceeded $2 million, and his future care could cost $6 million or more, according to court records. In addition, his injury occurred months before a $750,000 state-imposed cap on damages for pain and suffering went into effect, leaving open the door to a much larger jury award.

Anne Berleman Kearney, a lawyer for the state hospital association, filed a motion with the court asking that the fund’s claims against the hospital be dismissed from Schultz’s lawsuit. Under some circumstances, the fund can bring legal claims against hospitals, but malpractice is not one of them, she said in court documents. This one, she said, would “destabilize” the system the Legislature created to deal with malpractice.

If the fund prevails, it will cost hospitals and doctors more to operate, and they may not be able to get insurance to cover future cases, she said in court documents.

“The longer-term effect could very well diminish the quality of health care provided by physicians and hospitals in Wisconsin,” Kearney said, adding that that would undermine the intent of the Legislature when it created the fund 30 years ago.

Schultz had been diagnosed with gradual onset of multiple sclerosis in 1988 and had undergone several other therapies that did not provide sufficient relief before he came to St. Luke’s Medical Center on Feb. 20, 2006, for an injection of a drug to his spine to relieve the spasticity resulting from the disease.

Before the medical procedure, Schultz led a relatively active life and had driven himself to the hospital from his home in Mosinee.

A medical resident at the hospital gave Schultz a spinal injection of the drug Baclofen to treat the multiple sclerosis and an injection of Reno-60, a drug that was intended to trace the medication. The Reno-60 label said it was not to be used as an “intrathecal injection,” meaning it was not to be injected into the spine, according to court records. But it was injected into Schultz’s spine, and the result was severe spasticity, seizures and neurological damage. The damage included fractures of three vertebrae and his hips, an extremely painful condition that required further surgery and has resulted in him using a wheelchair.

Relatively soon after the incident, the hospital’s insurance carrier paid Schultz the maximum $1 million, according to the court file.

Because of the extent of Schultz’s injuries, his lawyer, Daniel Rottier, filed a lawsuit, which is being heard by Milwaukee County Circuit Judge David Hansher.
Not just malpractice

The fund filed documents with the court contending that the case is not just malpractice. The hospital, the fund maintains, was negligent in training and supervising those involved with the procedure and should be required to pay damages from its general liability insurance. David McFarlane, a lawyer representing the fund, declined to talk to a reporter about the case.

“(T)he basis for the fund’s claims does not arise out of rendering patient care,” according to a legal brief prepared by the fund. “Rather it arises out of Aurora’s policy, management and/or administrative decisions.”

Aurora Health Care Metro Inc. is the parent of St. Luke’s.

Heitz, speaking for the medical society, said supervising doctors may stop training residents if the fund prevails.

Earlier this year, Gov. Jim Doyle took $200 million from the patient’s compensation fund to balance the budget. A lawsuit pending in Dane County has challenged Doyle’s action, and while the two cases are not directly related, the Schultz case points out why “robbing the fund” was ill-advised, Heitz said.

“We don’t know what the damages will be in this case, but if the fund loses and has to pay, you need to have the money there to pay,” Heitz said. “If it isn’t, then the fund goes into a deficit.”
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