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Smith v. Surgery Center at Lone Tree, LLC.

2020 COA 145. No. 19CA0186. Negligence—Negligence Per Se—Corporate Practice of Medicine Doctrine—Vicarious Liability.

October 15, 2020

Smith visited SpineOne Spine & Sports Medical Clinic (SpineOne) for an evaluation of her back pain. Khan, a SpineOne employee and Smith’s treating physician, performed an epidural injection in her spine at Surgery Center at Lone Tree, LLC (SCLT), an ambulatory surgical center (ASC). Khan used the drug Kenalog off-label (in a way not approved by the US Food and Drug Administration) and did not obtain Smith’s informed consent to his off-label drug use. Smith subsequently lost all feeling in her lower extremities. She was eventually diagnosed with paraplegia and remains permanently paralyzed below the waist.

Smith and her husband sued Khan, SpineOne, and SCLT. The Smiths settled their claims against Kahn before trial, and the trial court dismissed their claims against SpineOne. As to SCLT, a jury found in the Smiths’ favor and awarded them $14,905,000 in damages. Applying the Health Care Availability Act (HCAA), the trial court reduced the verdict to $6,974,692.27.

SCLT appealed the judgment, and the Smiths cross-appealed the reduction of the award under the HCAA. SCLT argued that the Smiths’ negligence claims against it are barred by the corporate practice of medicine doctrine and thus should not have been submitted to the jury. The corporate practice of medicine doctrine prohibits a corporation that employs a physician from interfering with the physician’s medical judgment. The decision to administer a certain medication to a patient in a certain situation is a medical decision made by a physician alone. Because SCLT could not dictate to Khan how he could use Kenalog, SCLT cannot be held vicariously liable for Khan’s negligent administration of that drug. Further, a health care facility generally has no obligation to obtain a patient’s informed consent. Accordingly, as a matter of law, the trial court should have dismissed the corporate negligence and uninformed consent claims against SCLT.

SCLT also argued that the Smiths’ claim for negligence per se should not have been submitted to the jury. Here, the Smiths’ negligence per se claim relied on state licensing regulations for ASCs and federal regulations for Medicare reimbursement. These regulations were not primarily enacted to protect patient safety and therefore cannot serve as the basis for a negligence per se claim.

Because the trial court should have ruled in SCLT’s favor as a matter of law, the Court of Appeals did not address either the evidentiary issues raised by SCLT or the Smiths’ cross-appeal challenging the constitutionality of the HCAA.

The judgment was reversed and the case was remanded for entry of judgment in favor of SCLT.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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