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Should Doctors Working for Hospitals be Immune from Suits if Employed by a Charitable Foundation?

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In one of the cases, MacArthur v. UVA Health Services Foundation, the Virginia circuit court judge dismissed in a footnote the contention of the plaintiff’s attorney that the salaries of the physicians who work for the foundation are so high that this negates any claim that it is a true charity because the doctors were paid as much as $897,000.00 in salary and benefits in calendar year 2004, together with an additional $100,000.00 for teaching at the medical school. The foundation defended that its salary levels were competitive with other members of the Association of American Medical Colleges. Plaintiff’s attorney in that case also claimed that the amount of charitable care, compared to “for pay” care, rendered the foundation not truly charitable.

An interesting issue relating to medical negligence suits has been percolating in Virginia for a number of years. The issue may need to be decided in the Supreme Court of Virginia in the near future because there is actually a split of the circuit courts within the State on this issue. Several Norfolk and Portsmouth, Virginia circuit court judges have found doctors working for the Eastern Virginia Medical School’s Academic Physicians and Surgeons’ Foundation (EVMS Health Services) immune from lawsuits under an ancient doctrine known as “Charitable Immunity”. However, two circuit court judges sitting in the Charlottesville, Virginia have rejected charitable immunity in favor of doctors working for a charitable foundation called the Virginia Health Services Foundation.

Virginia already has one of the nations most restrictive medical malpractice caps or ceilings essentially allowing no more than 1.8 million dollar recoveries against any combination of doctors and hospitals involved in one act of malpractice. The cap is subjected to adjustments for costs of living changes over the years. Given this fact, and given the fact the doctors working for the charitable foundations likely have liability insurance, the ancient doctrine of charitable immunity seems out of step with the modern reality of our times. Furthermore, these doctors are making very healthy salaries and bonuses. The thought behind the charitable defense is that someone rendering good Samaritan charitable service should not be subjected to a massive lawsuit that could wipe out their business. These principles do not apply to physicians who are paid very good salaries and have liability insurance. The point of the plaintiffs’ lawyers is that the charitable immunity doctrine should not serve as a shield that protects doctors against carelessness, particularly where they are well compensated.
In one of the cases, MacArthur v. UVA Health Services Foundation, the circuit court judge dismissed in a footnote the contention of the plaintiff’s attorney that the salaries of the physicians who work for the foundation are so high that this negates any claim that it is a true charity because the doctors were paid as much as $897,000.00 in salary and benefits in calendar year 2004, together with an additional $100,000.00 for teaching at the medical school. The foundation defended that its salary levels were competitive with other members of the Association of American Medical Colleges. Plaintiff’s attorney in that case also claimed that the amount of charitable care, compared to “for pay” care, rendered the foundation not truly charitable.
More in line with the plaintiff’s contentions was Morris v. UVA Health Services Foundation, were evidence showed that the foundation had $216,000,000.00 in revenue and the court said that physician compensation was “radically incongruent with the traditional conception of a struggling charity in need of public support.”
It is assumed that the Virginia Supreme Court will have to rule on whether charitable immunity is a shield against medical negligence in Virginia. It seems to this writer that since the total liability of doctors in Virginia is already capped, the doctrine of charitable immunity for foundations (with substantial profits/healthy physician salaries), should be be “fossilized” as a relic of the law with no remaining logic. While the medical profession provides a vital public service, virtually no other occupation in the State of Virginia has a cap on professional liability for its negligence or carelessness. Given Virginia’s restrictive cap on the monetary liability, charitable immunity should be given its walking papers.