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Legal Aspects of Health Care Administration
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George D. Pozgar, MBA, CHE, D.Litt. Author, Speaker, Consultant
Gp Health Care
Legal Review Nina M. Santucci, MSCJ, JD
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Library of Congress Cataloging-in-Publication Data Names: Pozgar, George D., author. Title: Legal aspects of health care administration / George D. Pozgar, MBA, CHE, D.Litt. Description: Thirteenth edition. | Burlington, MA: Jones & Bartlett Learning,  | Includes bibliographical references and index. Identifiers: LCCN 2018002863 | ISBN 9781284127171 (casebound) Subjects: LCSH: Health services administration—Law and legislation—United States. | Medical laws and legislation—United States. | Medical personnel— Malpractice—United States. | BISAC: BUSINESS & ECONOMICS / Information Management.
Classification: LCC KF3821 .P69 2018 | DDC 344.7304/1—dc23 LC record available at https://lccn.loc.gov/2018002863
Printed in the United States of America 22 21 20 19 18 10 9 8 7 6 5 4 3 2 1
I dedicate this book to Denise Mirafuentes.
Your life was an inspiration.
Your love for family, friends, caregivers, and the many lives you have touched never failed.
Your unwavering faith in God and the challenges you faced have forever changed the lives of so many.
Your life is a testimony to goodness, kindness, and compassion.
Though the thoughts I wish to impart continue to swirl in my mind, words alone will never suffice.
So I leave you with this my dear friend,
Your signature phrase to “Live, Laugh, and Love” describes you well.
“The best and most beautiful things in the world cannot be seen or even touched, they best be felt with the heart.”
Helen Keller ALOHA & MAHALO
Until We All Meet Again
Contents Epigraph Preface About the Book Acknowledgments
Chapter 1 Hospitals Through the Ages Learning Objectives Early Hindu and Egyptian Hospitals Greek and Roman Hospitals Hospitals of the Early Christian Era Islamic Hospitals Early Military Hospitals Medieval Hospitals The “Dark Age” of Hospitals Hospitals of the Renaissance Hospitals of the 18th Century Early Hospitals in the United States Late 19th Century Renaissance 20th-Century Progress Health Care and Hospitals in the 21st Century History Challenges Us to Do Better Chapter Review Review Questions Notes
Chapter 2 Government, Law, and Ethics Learning Objectives Development of Law Sources of Law Government Organization Department of Health and Human Services Government Ethics Political Malpractice Chapter Review Review Questions Notes
Chapter 3 Tort Law—Negligence Learning Objectives Objectives of Tort Law Negligence Forms of Negligence
Degrees of Negligence Elements of Negligence Summary Case Chapter Review Review Questions Notes
Chapter 4 Intentional Torts Learning Objectives Assault and Battery False Imprisonment Defamation of Character Fraud Invasion of Privacy Infliction of Mental Distress Products Liability Chapter Review Review Questions Notes
Chapter 5 Tort Reform and Risk Reduction Learning Objectives Mediation and Arbitration Statute of Limitations Structured Awards Medical Malpractice Screening Panels Collateral Source Rule Contingency Fee Limitations Countersuits: Frivolous Claims Joint and Several Liability Malpractice Caps No-Fault System Regulation of Insurance Practices Reducing the Risks of Malpractice Collaboration in Tort Reform Chapter Review Review Questions Notes
Chapter 6 Criminal Aspects of Health Care Learning Objectives Criminal Procedure Healthcare Fraud Kickbacks Tampering with Drugs
Internet Pharmacy and Sale of Drugs Falsification of Records Patient Abuse Criminal Negligence Homicide Manslaughter Rape and Sexual Assault Theft Chapter Review Review Questions Notes
Chapter 7 Contracts and Antitrust Learning Objectives What Is a Contract? Types of Contracts Elements of a Contract Breach of Contract Corporate Contracts Partnership Agent Independent Contractor Conditions Performance Nonperformance Defenses Remedies Employment Contracts Medical Staff Bylaws: A Contract Exclusive Contracts Restraint of Trade Hospital Staff Privileges Transfer Agreements Insurance Contract Chapter Review Review Questions Notes
Chapter 8 Civil Procedure and Trial Practice Learning Objectives Pleadings Discovery Motions Pretrial Conference Notice of Trial Memorandum of Law The Courtroom and the Judge
The Jury Subpoenas Burden of Proof Res Ipsa Loquitur Opening Statements Examination of Witnesses Judicial Notice Rule Evidence Defenses Against Plaintiff’s Allegations Closing Statements Judge’s Charge to the Jury Jury Deliberation and Determination Awarding Damages Joint and Several Liability Appeals Execution of Judgments Chapter Review Review Questions Notes
Chapter 9 Corporate Structure and Legal Issues Learning Objectives Authority of Corporations Corporate Committee Structure Corporate Ethics Corporate Negligence Doctrine of Respondeat Superior Governing Body Responsibilities Corporate Reorganization and Mergers Chapter Review Review Questions Notes
Chapter 10 Medical Staff Organization and Malpractice
Learning Objectives Medical Staff Organization Medical Director Medical Staff Privileges Common Medical Errors Patient Assessments Diagnosis Treatment Discharge and Follow-Up Care Infections Psychiatry
Principles of Medical Ethics Physician–Patient Relationship Chapter Review Review Questions Notes
Chapter 11 Nursing and the Law Learning Objectives Scope of Practice Nurse Licensure Nursing Careers Advanced Practice Nurses Legal Risks of Nurses Duty to Question Discharge Duty to Report Physician Negligence Chapter Review Review Questions Notes
Chapter 12 Hospital Departments and Allied Professionals
Learning Objectives Paramedics and First Responders Emergency Department Laboratory Medical Assistant Nutritional Services Pharmacy Physical Therapy Physician Assistant Radiology and Related Lawsuits Respiratory Therapist Chiropractor Dentistry Podiatrist Security Licensure and Certification of Healthcare Professionals Helpful Advice for Caregivers Chapter Review Review Questions Notes
Chapter 13 Information Management and Patient Records
Information Management Medical Record Contents Documentation of Care Privacy Act of 1974 Health Insurance Portability and Accountability Act Patient Objects to Record Entries Ownership and Release of Medical Records Use of Patient Data Collected Retention of Records Electronic Medical Records Legal Proceedings and the Medical Record Falsification of Records Illegible Handwriting Timely Completion of Medical Records Confidential and Privileged Communications Charting: Some Helpful Advice Chapter Review Review Questions Notes
Chapter 14 Patient Consent, Rights, and Responsibilities
Learning Objectives Patient Consent Patient Rights Patient Responsibilities Chapter Review Review Questions Notes
Chapter 15 Healthcare Ethics Learning Objectives Ethics Morality Ethical Theories Principles of Healthcare Ethics Values Pillars of Moral Strength Religious Ethics and Spirituality Secular Ethics Professional Ethics Ethics Committee Reasoning and Decision Making Moral Compass Gone Astray Chapter Review Review Questions
Chapter 16 Procreation and Ethical Dilemmas Learning Objectives Abortion Sterilization Artificial Insemination Surrogacy Chapter Review Review Questions Notes
Chapter 17 End-of-Life Issues Learning Objectives Patient Autonomy Constitutional Right to Refuse Care Legislative Response Defining Death Futility of Treatment Do-Not-Resuscitate Orders Withholding and Withdrawal of Treatment Euthanasia Physician-Assisted Suicide Advance Directives Autopsy Organ Donations and Transplantation Research, Experimentation, and Clinical Trials Human Genetics Stem Cell Research Chapter Review Review Questions Notes
Chapter 18 Legal Reporting Requirements Learning Objectives Abuse Child Abuse Senior Abuse Communicable Diseases Aids Births and Deaths Adverse Drug Reactions Physician Competency Incident Reporting Sentinel Events
Look Closer, See Me Chapter Review Review Questions Notes
Chapter 19 Labor Relations Learning Objectives U.S. Department of Labor Unions and Healthcare Organizations National Labor Relations Act Norris–Laguardia Act Labor–Management Reporting and Disclosure Act Fair Labor Standards Act Civil Rights Act Occupational Safety and Health Act Rehabilitation Act Family and Medical Leave Act State Labor Laws Workers’ Compensation Labor Rights Management Rights Affirmative Action Plan Patient Rights During Labor Disputes Injunctions Administering Collective Bargaining Agreement Discrimination in the Workplace Chapter Review Review Questions Notes
Chapter 20 Employment at Will, Rights, and Responsibilities
Learning Objectives Employment at Will Public Policy Issues and Termination Termination Unemployment Compensation Wrongful Discharge Defending a Claim for Unfair Discharge Fairness: The Ultimate Test Effective Hiring Practices Employee Rights Employee Responsibilities The Caregiver’s Pledge Chapter Review Review Questions
Chapter 21 Professional Liability Insurance Learning Objectives Insurance Policies Insurance Policy Provisions Conditions of Insurance Policies Liability of the Professional Intentional Torts: Coverage Denied Medical Liability Insurance Self-Insurance Trustee Coverage Mandated Medical Staff Insurance Coverage Investigation and Settlement of Claims Chapter Review Review Questions Notes
Chapter 22 Managed Care and National Health Insurance
Learning Objectives Managed Care Models of Managed Care Organizations Federally Qualified HMO State HMO Laws Case Management Firms Third-Party Administrators Utilization Review Liability for Nonparticipating Hospitals Employee Retirement Income Security Act Reducing Exposure to Liability Health Care Quality Improvement Act of 1986 Ethics in Patient Referral Act (1989) Managed Care and Legal Actions Price Fixing Market Power National Health Insurance Veterans Care Chapter Review Review Questions Notes
Author’s Afterword Glossary Index
Epigraph I consider ethics, as well as religion, as supplements to law in the government of man.
—Thomas Jefferson, President of the United States (1743–1826)
In law a man is guilty when he violates the rights of others. In ethics he is guilty if he only thinks of doing so.
—Immanuel Kant, Philosopher (1724−1804)
Books are the carriers of civilization. Without books, history is silent, literature dumb, science crippled, thought and speculation at a
standstill. I think that there is nothing, not even crime, more opposed to poetry, to philosophy, ay, to life itself than this incessant business.
—Henry David Thoreau, Author, Poet, Philosopher (1817–1862)
It is curious—curious that physical courage should be so common in the world, and moral courage so rare.
—Mark Twain, American Author, Humorist (1835−1910)
In civilized life, law floats in a sea of ethics.
—Earl Warren, Chief Justice of the United States (1891–1974)
How far you go in life depends on your being tender with the young, compassionate with the aged, sympathetic with the striving, and
tolerant of the weak and the strong— because someday you will have been all of these.
—George Washington Carver, American Inventor (1864–1943)
Preface He has achieved success who has lived well, laughed often and loved much; who has gained the respect of intelligent men and the love of
little children; who has filled his niche and accomplished his task; who has left the world better than he found it, whether by an improved poppy, a perfect poem, or a rescued soul; who has never lacked appreciation of earth’s beauty or failed to express it; who has always looked for the best in others and given them the best he had; whose life was an inspiration; whose memory a benediction.
egal Aspects of Health Care Administration, Thirteenth Edition, as with the previous 12 editions, continues to be the most comprehensive and
engaging book encompassing both the legal and ethical issues of healthcare administration. The Thirteenth Edition continues its tradition of providing a solid foundation in a wide range of current healthcare topics in an understandable format that carefully guides the reader through the complex maze of law and ethics, as well as an overview of practical ways to improve quality and safety in the delivery of patient care. As in previous editions, the Thirteenth Edition serves as a valuable tool for both undergraduate and graduate programs. Additionally, as has been well recognized by practicing healthcare professionals, Legal Aspects of Health Care Administration continues to be a valuable reference tool in their day-to-day work activities.
The author infuses life into the educational process through legal case studies that have been litigated in the courtroom or reported in the press, as well as real-world healthcare events through “reality checks” experienced by patients and healthcare professionals. The author’s approach inspires dynamic discussion and excitement in the learning process, thus creating an atmosphere of interest and participation, which is conducive to learning.
Although the court cases relating examples of malpractice are often mirror images of the failures of medicine, this Thirteenth Edition provides a comprehensive resource from which the reader will learn how the law, ethics, and medicine intertwine. The contents of this book serve as a reminder to its readers of the need to learn from the mistakes and tragedies experienced by others to avoid repeating them. The legal cases and resulting headlines should stand as a reminder of the responsibility that caregivers bear to the profession they have chosen.
With revised estimates that as many as 400,000 patients die each year as a result of medical errors, according to a September 2013 study reported in the Journal of Patient Safety, it is mandatory that caregivers be ever mindful of the
nature of the life-and-death settings within which they work. At the time of this writing the headlines continue to re