Medical Care: Challenge to Cost Controls : Suit Says Decision of Medi-Cal Consultant Led to Loss of Leg

Medical review programs, credited with saving billions of dollars in health-care costs by limiting patients’ hospital stays, face a legal challenge from a Los Angeles woman who claims she lost her leg after a Medi-Cal consultant denied her doctors’ request to extend her hospital stay.

Representatives of the state attorney general are scheduled to go before the California Court of Appeal in the next few weeks seeking to overturn an October, 1982, jury verdict in Los Angeles Superior Court awarding $500,000 in damages to Medi-Cal patient Lois J. Wickline of Lake Hughes, who was forced to have her right leg amputated after she was discharged from a Van Nuys hospital and developed an infection.

Wickline alleged in court that her medical complications stemmed from a decision by Medi-Cal personnel to deny her doctors’ request to extend her hospital stay eight days so that doctors could observe her recuperation from a vascular operation.

Norman B. Peek, a deputy state attorney general, argued in his appellate court brief that California should not be held liable because “Medi-Cal’s actions met any standard of reasonable conduct” and that, in any event, each of Wickline’s three doctors failed to formally protest her discharge from the hospital.

The unusual case, which has attracted widespread interest from medical groups--including friend-of-the-court briefs submitted by the California Hospital Assn. in Sacramento and the California Medical Assn. in San Francisco--is apparently the first in the nation to try to establish that agencies operating “medical utilization programs” may be held liable for negligent conduct, just as hospitals and physicians have traditionally been held liable for negligent treatment of patients.

Medical utilization programs attempt to ensure health-care quality while controlling costs by requiring second opinions, monitoring lengths of hospital stays and other procedures.

“People throughout the country are waiting for the results of this case, which, depending on what the judge says (about it), may have very broad ramifications,” said Catherine Hanson, a San Francisco lawyer who filed a friend-of-the-court brief on behalf of the California Medical Assn.

Others Affected

The outcome of the litigation potentially could affect not only Medi-Cal, whose 400-person evaluation staff reviews about 500,000 requests annually to grant or extend hospital care, but many private medical review programs such as those used by Blue Cross, Aetna and other major insurers, experts say.

“We’ve been quite concerned about it,” said Angele Khachadour, general counsel for Blue Cross of California, the state’s largest private health insurer. “If the decision is upheld in favor of the plaintiff, you will have a totally different environment in terms of utilization review. It will have a chilling effect on the ability of insurers to make pre-admission and concurrent review of a patient’s medical care.” Said Frank DeBernardi, chief of the field services branch of Medi-Cal: “I can’t comment on the Wickline case, (but) I would say it’s an important case.”

DeBernardi added that, besides the questions raised by Wickline about utilization review, Wickline’s challenge raises a fundamental question about the responsibility of health-care providers: “State law and professional ethics provide that hospitals should provide (quality) emergency care, irrespective of the patient’s ability to pay. In addition, doctors have a basic responsibility to provide certain standards of care.”

Though doctors and hospitals have often faced litigation stemming from their medical care, utilization review programs--which only became widespread in the last five years--are a far newer target.

Some 47% of the nation’s 5,000 largest employers now have utilization review programs and another 46% have hospital pre-admission testing programs, according to a survey conducted by New York-based medical benefits consultant William M. Mercer-Meidinger Inc.

Because the programs vary so dramatically, it is difficult to estimate how much money they have saved.

However, most experts agree that the programs have dramatically slowed the double-digit pace of price increases that have pushed the nation’s annual tab for health care to about $400 billion. And the programs are credited with reducing hospital occupancy rates to less than 65% last year from 76% in 1981 as new medical technology and more cost-effective home care enable doctors to discharge patients earlier.

“As society faces the issue of controlling the cost of medical care and assuring the delivery of quality health care, (the Wickline case) raises the question of how much protection we afford those organizations which are attempting to make decisions on medical utilization,” said Barry J. London, a lawyer who represents California Medical Review Inc., a San Francisco-based group that has a $27-million contract to review Medicare claims in California.

“If you impose very stringent liability on utilization review, then review organizations . . . will hesitate to challenge over-utilization--thereby increasing society’s bill for health care,” he said.

For all of its potential impact, the Wickline case began inauspiciously a decade ago when Lois Wickline, a 58-year-old former beautician who worked as a supervisor in an electronics plant before she was hospitalized, began feeling pain in her lower back.

Decision to Operate

After visiting her family physician, Stanley Z. Daniels, she was referred to a specialist who diagnosed Wickline as having Leriche’s syndrome--a vascular condition in which tissue constricts the arteries. The doctors decided to hospitalize Wickline and operate.

Wickline was admitted to Van Nuys Community Hospital on Jan. 6, 1977, and had surgery the next day.

“She was a good patient, a very nice lady,” recalled surgeon Gerald E. Polonsky, who operated on Wickline.

Medi-Cal had authorized a hospital stay until Jan. 17 for the surgery. But Polonsky, Daniels and another physician felt that, due to her condition, Wickline should remain hospitalized for another eight days. Medi-Cal approved only four days of their request. About a week after her discharge Jan. 21, Wickline returned to Daniels’ office complaining of increased pain in her right leg. Infection was found to have spread into Wickline’s leg. The only recourse was amputation.

Wickline declined through her lawyer, Thomas F. Bruyneel, to be interviewed.

But Daniels and Polonsky, when asked why they had not formally protested the Medi-Cal decision to shorten Wickline’s hospital stay, both blamed earlier lack of success in challenging the state medical bureaucracy.

“It’s like banging your head against the wall,” Polonsky said.

Added Daniels: “Medi-Cal just won’t listen. I’ve had patients in the hospital, and Medi-Cal would say: ‘Well, this patient has to go out. His time is up.’

“I’d say, ‘My God, this patient can’t even walk,’ and request that they come examine the patient. They wouldn’t. They seemed only concerned with keeping control of medical costs.” He added: “So far, I have not had any problems with private utilization review programs . . . but perhaps that’s because I’ve been lucky.”

Medi-Cal’s DeBernardi conceded that utilization review programs may be overdue for some changes, but he predicted that such changes will come with a price tag.

“What I will do is, maybe, change our process to give far more clear explanations and change the means of communications” between treating physicians and Medi-Cal personnel, he said.

“We been very cost-effective so far,” DeBernardi continued. “Our best information is that we save $15 for every dollar we spend. But the trade-off is, the longer it takes to make decisions (about care), the more expensive it (care) becomes and the more at risk the hospital and the provider are” to medical complications and potential lawsuits.