Court Opinion

ID: 4096064
Source: CourtListenerOpinion
Date Created: 2016-11-07 16:07:10.668675+00
Date Added: 2024-06-11T07:45:31.232898
License: Public Domain

FILED
                                                              Nov 07 2016, 9:04 am

                                                                   CLERK
                                                               Indiana Supreme Court
                                                                  Court of Appeals
                                                                    and Tax Court

ATTORNEYS FOR APPELLANT                             ATTORNEYS FOR APPELLEE
Anne L. Cowgur                                      ANONYMOUS CLINIC
Geoffrey Slaughter                                  David C. Jensen
Taft Stettinius & Hollister LLP                     David J. Beach
Indianapolis, Indiana                               Louis W. Voelker
                                                    Eichhorn & Eichhorn, LLP
                                                    Hammond, Indiana
                                                    ATTORNEY FOR APPELLEE
                                                    ORTHOPEDIC AND SPORTS MEDICINE
                                                    CENTER OF NORTHERN INDIANA
                                                    Lyle R. Hardman
                                                    Hunt Suedhoff Kalamaros LLP
                                                    South Bend, Indiana
                                                    ATTORNEYS FOR APPELLEES TERRI J.
                                                    RETHRAKE, ET AL.
                                                    James A. Piatt
                                                    Joseph N. Williams
                                                    William N. Riley
                                                    Riley Williams & Piatt, LLC
                                                    Indianapolis, Indiana
                                                    Douglas D. Small
                                                    Foley & Small
                                                    South Bend, Indiana
                                                    ATTORNEYS FOR AMICI CURIAE ST.
                                                    MARY’S HEALTH SERVICES, INC., AND
                                                    ST. MARY’S MEDICAL CENTER OF
                                                    EVANSVILLE, INC.
                                                    Patrick A. Shoulders
                                                    Steven K. Hahn
                                                    Ziemer Stayman Weitzel Shoulders LLP
                                                    Evansville, Indiana

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016            Page 1 of 28
                                           IN THE
    COURT OF APPEALS OF INDIANA

Stephen W. Robertson,                                     November 7, 2016
Commissioner, Indiana                                     Court of Appeals Cause No.
Department of Insurance, as                               71A03-1512-CT-2199
Administrator of the Indiana                              Interlocutory Appeal from the St.
Patient’s Compensation Fund,                              Joseph Superior Court
                                                          The Honorable David C. Chapleau,
Appellant/Intervenor,                                     Judge
        v.                                                Cause Nos.
                                                          71D06-1405-CT-136,
                                                          71D06-1406-CT-181,
Anonymous Clinic1, (Defendant                             71D06-1406-CT-211,
Below) and Terri J. Rethlake, et                          71D06-1406-CT-257,
                                                          71D06-1406-CT-320,
al. (Plaintiffs below),                                   71D06-1406-CT-300
Appellees.

Stephen W. Robertson,                                     Court of Appeals Cause No.
                                                          71A03-1512-CT-2199
Commissioner, Indiana
Department of Insurance, as                               Appeal from the Elkhart Superior
                                                          Court
Administrator of the Indiana
Patient’s Compensation Fund,                              The Honorable Evan S. Roberts,
                                                          Judge
Appellant/Intervenor,                                     Cause No. 20D01-1410-CT-216
        v.

Orthopedic and Sports Medicine
Center of Northern Indiana;
ASC Surgical Ventures, LLC;

1
   Although some plaintiffs in the St. Joseph cases refer to the defendant as “ABC Clinic” to retain
anonymity, we shall refer to the defendant as “Anonymous Clinic” in an effort to reduce the potential
for confusion. As it happens, there is an actual “ABC Clinic” in South Bend, which is a spay/neuter
clinic operated by Pet Refuge. See http://petrefugeabcclinic.com/ (last visited on October 26, 2016).

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016                Page 2 of 28
      OSMC; John Doe Company;
      Medical Protective Corporation;
      Medical Insurance Services, Inc.
      (Defendants Below) and Joe and
      Linda Alcozar, et al. (Plaintiffs
      below),
      Appellees.

      Bradford, Judge.

                                          Case Summary                   2

[1]   Beginning in 2012, patients around the country began suffering meningitis after

      being injected with preservative-free methylprednisolone acetate (“MPA”), a

      steroid purchased from New England Compounding Pharmacy, Inc., a/k/a the

      New England Compounding Center (“NECC”). It was soon discovered that

      some lots of MPA had become contaminated with fungus. This consolidated

      appeal concerns claims brought by injured patients (or those suing on their

      behalf) (collectively, “the Plaintiffs”) against Anonymous Clinic in St. Joseph

      County and Orthopedic and Sports Medicine Center of Northern Indiana

      (“OSMC”) and affiliated entities in Elkhart County (collectively, “the

      Defendants”). Plaintiffs contend that the Defendants were negligent in

      choosing to administer preservative-free MPA and in failing to properly

      2
        We heard oral argument in this case on October 19, 2016. We would like to commend all counsel on
      the high quality of their written and oral advocacy.

      Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016            Page 3 of 28
      evaluate NECC before using it as a supplier. Some of the Plaintiffs brought suit

      without using the procedures laid out in the Indiana Medical Malpractice Act

      (“the MMA”), and Defendants moved either for dismissal or summary

      judgment on the basis that Plaintiffs’ claims were claims of medical

      malpractice.

[2]   Stephen W. Robertson, acting in his capacity as Commissioner of Indiana

      Department of Insurance, which administers the Indiana Patient’s

      Compensation Fund (“the PCF”) intervened, arguing that Plaintiffs’ claims

      were of general negligence and therefore not subject to the provisions of the

      MMA. The trial courts ultimately agreed with Defendants and Plaintiffs (who

      had reversed their initial position) that Plaintiffs’ claims were governed by the

      MMA. In this consolidated appeal, the PCF contends that the trial courts erred

      in concluding that Plaintiffs’ claims are claims of medical malpractice.

      Plaintiffs, Defendants, and Amici Curiae (health-care providers facing similar

      claims in other cases), contend that Plaintiffs’ claims are subject to the MMA as

      they involve actions informed by the exercise of professional medical judgment.

      Because we conclude that Plaintiffs’ claims are subject to the MMA, we affirm

      the judgments of the trial courts and remand for further proceedings consistent

      with this opinion.

                            Facts and Procedural History

      Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 4 of 28
                             I. St. Joseph County Litigation
[3]   The St. Joseph Superior Court set forth the facts underlying the claims filed in

      St. Joseph County in its order dismissing Plaintiffs’ claims:

                     PRELIMINARY DETERMINATIONS OF FACT
                     1.     This proceeding arises as a result of an outbreak of
              fungal meningitis, fungal infections and other related
              complications that affected individuals in at least twenty states
              and caused, at a minimum, 64 deaths. The outbreak resulted in
              deaths and injuries to Hoosiers and Michigan residents who
              received treatment in Indiana. Indiana and Michigan were hit
              particularly hard. The [Centers for Disease Control] identified 93
              cases of Hoosiers diagnosed with fungal infections linked to
              contaminated epidural injections, with 11 of those resulting in
              death. Michigan was the hardest hit state, with a case count of
              264, and 11 of those resulting in death. There are many more
              individuals who received a contaminated injection who suffered
              injury from the injection, but who have not been identified as a
              “case” by the CDC.
                     2.     Plaintiffs are individuals or their representatives
              who suffered injury or death as a direct result of being
              administered one or more contaminated epidural injections.
              ….
                     Plaintiffs also include the spouses of certain individuals
              who received such contaminated injections. Those plaintiffs who
              received services from [Anonymous Clinic] sought treatment of
              back pain and related spinal conditions. Such services included
              physical therapy, epidural injections, pain medications and
              surgery. Each of the patient-plaintiffs was a “patient”, as defined
              by the MMA, of [Defendants] when they received their epidural
              steroid injections.
                     3.     [Anonymous Clinic is a] qualified health care
              provider under MMA which was and is engaged in the business
              of providing health care and selling medical related products.
              The plaintiffs’ complaints, filed before the St. Joseph Circuit and

      Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 5 of 28
        Superior Courts, each allege a claim arising out of the patient-
        health care provider relationship.
               4.     The intervening party in this litigation is the
        Patient’s Compensation Fund (hereafter referred to as “PCF”).
        Under the provisions of the Indiana Medical Malpractice Act
        (hereafter referred to as “MMA”), the PCF is responsible for
        payment of a plaintiff’s claim which is determined by trial or
        through settlement to be a recoverable claim and where the
        health care provider in question, through its insurer, had paid as
        required under the MMA.
               5.     Plaintiffs’ proposed complaints filed with the IDOI
        … pleaded factual allegations about the patient-health care
        provider relationship each plaintiff had with [Anonymous
        Clinic]. Each proposed complaint alleges that the plaintiff was
        “injected with a contaminated epidural product” when he or she
        was treated at [Anonymous Clinic].
               6.     Plaintiffs allege in 1998, Gregory Conigliaro and
        Barry Cadden co-founded the New England Compounding
        Pharmacy, Inc., known as New England Compounding Center
        (‘‘NECC”), in Massachusetts. Other members of the Conigliaro
        and Cadden families came to be involved with NECC either as
        owners, officers or employees. Other related entities to NECC
        were established by the Conigliaros and Barry Cadden, including
        Medical Sales Management, Inc., Ameridose, LLC and Alaunus
        Pharmaceutical, LLC in the State of Massachusetts.
               7.     Plaintiffs allege NECC operated as a compounding
        pharmacy. Plaintiffs assert that compounding pharmacies are
        prohibited from mass production of pharmaceutical products but
        may only produce products that have a particular demand need,
        such as a drug for a patient who is allergic to an ingredient in a
        mass produced, FDA regulated product or a pharmaceutical
        product that is no longer manufactured.
               8.     Plaintiffs allege [Anonymous Clinic] purchased
        preservative-free methylprednisolone acetate (“MPA”) from
        NECC. MPA is a steroidal product that can be injected into the
        area of the lumbar spine to provide pain relief to individuals who
        suffer with low back pain and related symptoms.

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 6 of 28
               9.      Plaintiffs allege there are particular safety and
        product quality risks associated with purchasing pharmaceuticals
        from a compounding pharmacy. The risk is heightened for those
        pharmaceutical products that are made without preservatives,
        due to the increased risk of their being or becoming
        contaminated.
               10. Plaintiffs allege an outbreak of fungal meningitis,
        lumbar fungal infections and related injuries and complications
        arose in September, 2012. [CDC] was notified by the Tennessee
        Department of Health of a patient who developed fungal
        meningitis after receiving an epidural steroidal injection.
        Additional patients developing fungal meningitis were next
        identified in Massachusetts and the outbreak continued spreading
        to 19 states, including Indiana and Michigan. The outbreak was
        the result of patients receiving one or more contaminated
        injections from three different lots of MPA compounded by
        NECC (lot numbers 05212012@68, 06292012@29 and
        08102012@51) or from another contaminated NECC
        medication.
               11. Plaintiffs allege The Food and Drug Administration
        (“FDA”) and the Massachusetts Department of Public Health
        (“MDPH’’) began investigating NECC, along with the
        involvement of other state and federal agencies. On September
        26, 2012, NECC recalled the three lots of MPA found to be
        contaminated. The suspected lots contained 17,676 dosage vials.
        Of this number, more than 14,000 were used for injections. Only
        about 3,000 doses were returned through the recall process.
               12. Plaintiffs allege the investigation of NECC revealed
        black particulate matter in sealed, returned vials of MPA. Vials
        also contained a greenish black foreign matter and others a white
        filamentous material. Sterility analysis later confirmed the
        presence of “viable microbial growth” in all of the 50 vials tested.

Appellant’s App. pp. 93-97 (record citations omitted).

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 7 of 28
[4]   A total of six claims against Anonymous Clinic were consolidated to address

      the threshold legal issue of whether the claims are claims of general negligence

      or are subject to the MMA. On May 15, 2015, in the consolidated action

      captioned In re Steroid Litigation, Anonymous Clinic filed a motion to dismiss all

      of the Plaintiffs’ claims for lack of subject matter jurisdiction on that basis that

      MMA requirements had not been met.

[5]   On June 26, 2015, the PCF filed a response to the motion to dismiss, opposing

      it on the ground that the MMA did not apply to Plaintiffs’ claims. Also on

      June 26, 2015, Plaintiffs reversed their earlier position and filed a response

      urging the trial court to conclude that their claims were covered by the MMA.

      On August 27, 2015, the St. Joseph Superior Court heard oral argument on

      Anonymous Clinic’s motion to dismiss.

[6]   On October 12, 2015, the St. Joseph Superior Court granted Anonymous

      Clinic’s motion to dismiss in part, concluding that Plaintiffs’ claims were

      governed by the MMA. The St. Joseph Superior Court stayed proceedings until

      compliance with MMA procedures could be accomplished. On November 12,

      2015, the PCF moved the St. Joseph Superior Court to certify the case for

      interlocutory appeal, which motion was granted on November 16. This court

      accepted jurisdiction.

                                         II. Elkhart County
[7]   The Elkhart Superior Court set forth the facts underlying the claims filed in

      Elkhart County in its order entering summary judgment in favor of OSMC:

      Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 8 of 28
        FINDINGS OF FACT
            1. Plaintiffs are residents of Indiana and Michigan.
            2. OSMC operates medical clinics in Indiana.
            3. Medical Protective provides medical malpractice insurance
        to OSMC.
            4. Broadly, the medical malpractice insurance coverage policy
        requires Medical Protective to defend and indemnify OSMC
        “[i]n any claim based upon professional services,” subject to four
        exclusions:
                a. Criminal acts and willful torts,
                b. Claims that fall under OSMC’s general liability policy,
                c. Punitive damages, or damages above and beyond
                compensatory damages, and
                d. Any amounts that exceed policy limits.
            5. The New England Compounding Center (“NECC”) was a
        compounding pharmacy located in Massachusetts.
            6. In 2005, OSMC began purchasing betamethasone and
        hyaluronidase from New England Compounding Center.
            7. OSMC began purchasing drugs from NECC after Elkhart
        General Hospital, which is not a party to this case, began
        ordering compounded pharmaceuticals from NECC.
            8. Before Elkhart General Hospital ordered pharmaceuticals
        from NECC, two pharmacists from the hospital traveled to
        NECC’s facilities.
            9. Dr. Gene W. Grove, Sr., M.D. works as the medical
        director of OSMC and as chairman of the pharmacy and
        therapeutics board at Elkhart General Hospital.
            10. While acting as chairman of the pharmacy and
        therapeutics board, Dr. Grove became aware that the Elkhart
        General Hospital medical staff had authorized NECC as a
        supplier.
            11. OSMC hires Elkhart Hospital pharmacists to act as
        consultants.
            12. OSMC’s trust in Elkhart General Hospital’s vetting
        process for pharmaceutical suppliers played a role in OSMC’s
        authorization of NECC as a supplier.
            13. In 2006, OSMC decided to use preservative-free [MPA].

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 9 of 28
            14. Physicians at OSMC determined that preservative-free
        steroids are safer for patients because preservatives may cause
        arachnoiditis and damage the spinal cord.
            15. Commercial drug manufacturers do not produce MPA in
        a preservative-free form.
            16. OSMC decided to purchase preservative-free MPA from
        NECC because OSMC was already purchasing betamethasone
        and hyaluronidase from NECC.
            17. OSMC did not seek other potential suppliers of
        preservative-free MPA.
            18. The medical board at OSMC authorized the use of
        preservative-free MPA.
            19. The medical board at OSMC authorized NECC as a
        supplier of medications.
            20. Plaintiffs allege that compounding pharmacies may not
        mass produce pharmaceuticals, but rather must produce drugs for
        individual patients.
            21. Mass producers of pharmaceuticals must receive special
        licenses and are subject to greater FDA oversight.
            22. Drugs acquired from a compounding pharmacy generally
        involve greater risk than drugs acquired from a mass producer.
            23. In 2012, the [CDC] began investigating an outbreak of
        fungal meningitis, lumbar fungal infections, and similar diseases.
            24. The CDC traced the outbreak to three lots of preservative-
        free MPA that NECC produced.
            25. Approximately 17,676 vials of preservative-free MPA
        originated from the contaminated lots.
            26. A recall was issued, and only approximately 3,000 vials
        were returned, with approximately 14,000 doses having been
        previously administered.
            27. A number of the returned vials contained visible
        particulate and other foreign matter.
            28. Fifty (50) of the returned vials were tested for sterility, and
        all of them contained viable microbial growth.

Appellant’s App. pp. 116-31.

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 10 of 28
[8]   Beginning on October 27, 2014, several Plaintiffs sued OSMC to recover for

      injuries allegedly suffered because of the injection of defective MPA. 3 On May

      15, 2015, the PCF moved for summary judgment on the ground that the

      Plaintiffs’ claims were not covered by the MMA. Also on May 15, 2015,

      OSMC moved for summary judgment, asserting that the Plaintiffs’ claims were

      covered by the MMA. On June 25, 2015, Plaintiffs responded to the summary

      judgment motions, seeking a determination that their claims were covered by

      the MMA. On August 7, 2015, the Elkhart Superior Court heard oral

      arguments on the summary judgment motions. On November 13, 2015, the

      Elkhart Superior Court issued its order entering summary declaratory judgment

      in favor of OSMC on the ground that the MMA applies to Plaintiffs’ claims.

                                    III. Appellate Procedure
[9]   On February 17, 2016, Plaintiffs moved this court to consolidate the St. Joseph

      appeal with the Elkhart appeal, a motion the PCF did not oppose. On March

      7, 2016, this court granted the motion to consolidate the appeals, consolidating

      appellate cause numbers 20A03-1512-CT-2148 and 71A03-1512-CT-2199 under

      the latter cause number.

                                  Discussion and Decision

      3
        At the time of the Elkhart Superior Court’s order, a total of twenty-six cases were before the court
      involving the same question about whether the MMA applied to their claims.

      Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016                   Page 11 of 28
[10]   All agree that the only issue in this appeal is whether Plaintiffs’ allegations

       against Anonymous Clinic and OSMC are claims of general negligence or are

       covered by the provisions of the MMA. The parties also agree that the issue, as

       ultimately one of jurisdiction, is to be reviewed de novo by this court. See

       Kondamuri v. Kondamuri, 799 N.E.2d 1153, 1156 (Ind. Ct. App. 2003) (“A

       court’s jurisdiction either exists or does not, and the question of a court’s

       jurisdiction is therefore a question of law that is not entrusted to the trial court’s

       discretion but rather is reviewed de novo.”), trans. denied.

                                 I. Background—The MMA
[11]   Plaintiffs, Defendants, and Amici Curiae argue that Plaintiffs’ claims are covered

       by the MMA while the PCF argues that they are not.

               [T]he MMA [is] a statute that applies to claims of personal injury
               or death proximately caused by a “health care provider,” as that
               term is defined in the MMA.… We will usually refer to this type
               of claim in this opinion as “medical malpractice” or just
               “malpractice.” The MMA did not create or establish the medical
               malpractice claim; it only imposed procedural requirements on
               the prosecution of them. Chamberlain v. Walpole, 822 N.E.2d 959,
               961 (Ind. 2005).
               One of the requirements of the MMA is that a proposed medical
               malpractice complaint first be filed with the Department of
               Insurance for review by a medical panel before the complaint is
               filed in court.

       Ellenwine v. Fairley, 846 N.E.2d 657, 660 (Ind. 2006).

               The MMA … set up a system under which health care providers
               meeting qualifications set forth in the act (“Qualified Provider”)

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 12 of 28
               would enjoy certain benefits, including a limitation on liability.
               For an act of malpractice occurring after June 30, 1999, the total
               amount recoverable for an injury or death is now capped at
               $1,250,000. See Ind. Code § 34-18-14-3(a)(3). A Qualified
               Provider’s liability for an occurrence of malpractice is now
               limited to $250,000. See Ind. Code § 34-18-14-3(b). Any
               remaining amount due from a judgment or settlement is to be
               paid from the Fund. See Ind. Code § 34-18-14-3(c).

       In re Stephens, 867 N.E.2d 148, 150 (Ind. 2007).

[12]   At the heart of both the Elkhart and St. Joseph Superior Courts’ decisions is

       their conclusion that the MMA governs Plaintiffs’ claims against Defendants.

       Defendants and Amici Curiae, who are also health care providers under the

       MMA, wish to have this court declare Plaintiffs’ claims subject to the MMA.

       Plaintiffs, despite the fact that they would face the additional procedural

       burdens of compliance with the MMA as well as the limitations on recovery,

       take the same position. The PCF contends that Plaintiffs’ claims are claims of

       general negligence, not governed by the MMA.

                                          II. The Arguments
[13]   Pursuant to Indiana Code section 34-18-2-13, “‘Health care’ means an act or

       treatment performed or furnished, or that should have been performed or

       furnished, by a health care provider for, to, or on behalf of a patient during the

       patient’s medical care, treatment, or confinement.” The question is whether the

       negligence alleged against Defendants qualifies as “health care.” If so,

       Plaintiffs’ claims are subject to the MMA; if not, they are claims of general

       negligence.
       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 13 of 28
[14]   In the brief in support of the PCF’s summary judgment motion filed in Elkhart

       Superior Court, it characterized Plaintiffs’ arguments as follows:

               Instead, the gravamen of plaintiffs’ underlying complaints is that
               OSMC [was] negligent in procuring preservative-free [MPA]
               from NECC.
               Based on a review of the underlying complaints and the
               deposition testimony of [OSMC]’s representatives, the PCF
               anticipates that plaintiffs’ arguments related to whether the
               MMA applies to their claims will fall into two broad categories -
               namely, (1) the decision to use a preservative-free [MPA], and (2)
               the decision to purchase that product from NECC.

       Appellant’s App. p. 277.

[15]   In the PCF’s motion in St. Joseph Superior Court, it characterizes the Plaintiffs’

       claims as follows:

               Instead, the gravamen of plaintiffs’ underlying complaints is that
               [Anonymous Clinic was] negligent in procuring preservative-free
               [MPA] from NECC. The “question of whether a given course of
               treatment was medically proper and within the appropriate,
               standard” is the “quintessence of a malpractice case.” Howard
               Reg’l Health Sys. v. Gordon, 952 N.E.2d 182, 185 (Ind. 2011). But,
               noticeably absent in this case is any allegation that the “course of
               treatment” was improper or improperly administered. Instead,
               plaintiffs allege that the course of treatment was tainted by a third
               party who allowed the medications to become contaminated.
               This factual scenario is fundamentally different from the
               allegations that state a claim for medical malpractice.
               The complaint allegations relevant to [Anonymous Clinic] fall
               into two broad categories - namely, (1) the decision to use a
               preservative-free [MPA], and (2) the decision to purchase that
               product from NECC.

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 14 of 28
       Appellant’s App. pp. 996-97. So, the question is whether deciding to use

       preservative-free MPA and deciding to purchase it from NECC constitute

       “health care” under the MMA. If so, the alleged negligence in those areas

       would be subject to the MMA. If not, such claims would be claims of general

       negligence.

                                          A. Legal Arguments
[16]   The PCF contends that the general procurement of products that will eventually

       be used in the course of treatment does not qualify as “health care” under the

       MMA. The OSMC and Anonymous Clinic argue that Plaintiffs’ allegations are

       covered by the MMA. Amici point out that the U.S. District Court for the

       District of Massachusetts, which is hearing hundreds of similar cases in federal

       multidistrict litigation (“the MDL Court”), has determined similar claims to be

       claims of professional negligence, and urges this court to do the same.

[17]   “The [MMA] is not all-inclusive as to claims against medical providers, and a

       claim against a medical provider sounding in general negligence or premises

       liability rather than medical malpractice is outside the [MMA].” Peters v.

       Cummins Mental Health, Inc., 790 N.E.2d 572, 576 (Ind. Ct. App. 2003), trans.

       denied.

                 The Act covers “curative or salutary conduct of a health care
                 provider acting within his or her professional capacity, but not
                 conduct unrelated to the promotion of a patient’s health or the
                 provider’s exercise of professional expertise, skill, or judgment.”
                 Howard Reg’l Health Sys. v. Gordon, 952 N.E.2d 182, 185 (Ind.
                 2011) (emphasis added) (citation and quotation marks omitted).

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 15 of 28
        When deciding whether a claim falls under the provisions of the
        Act, “we are guided by the substance of a claim to determine the
        applicability of the Act.” Doe by Roe v. Madison Ctr. Hosp., 652
N.E.2d 101, 104 (Ind. Ct. App. 1995).… [W]e reiterate that the
        “fact that the alleged misconduct occurs in a healthcare facility”
        or that “the injured party was a patient at the facility,” is not
        dispositive in determining whether the claim sounds in medical
        malpractice. Madison Ctr., Inc. v. R.R.K., 853 N.E.2d 1286, 1288
        (Ind. Ct. App. 2006), trans. denied. “[T]he test is whether the
        claim is based on the provider’s behavior or practices while
        acting in his professional capacity as a provider of medical
        services.” Id. (quotation marks omitted). We also noted more
        recently that:

                 A case sounds in ordinary negligence [rather than
                 medical negligence] where the factual issues are
                 capable of resolution by a jury without application
                 of the standard of care prevalent in the local medical
                 community. By contrast, a claim falls under the
                 Medical Malpractice Act where there is a causal
                 connection between the conduct complained of and
                 the nature of the patient-health care provider
                 relationship.

        B.R. ex rel. Todd v. State, 1 N.E.3d 708, 714-15 (Ind. Ct. App.
        2013) (citations omitted), trans. denied.

Terry v. Cmty. Health Network, Inc., 17 N.E.3d 389, 393 (Ind. Ct. App. 2014).

        Indiana courts understand the Malpractice Act to cover “curative
        or salutary conduct of a health care provider acting within his or
        her professional capacity,” Murphy v. Mortell, 684 N.E.2d 1185,
        1188 (Ind. Ct. App. 1997), but not conduct “unrelated to the
        promotion of a patient’s health or the provider’s exercise of
        professional expertise, skill, or judgment.” Collins v. Thakkar, 552
N.E.2d 507, 510 (Ind. Ct. App. 1990). To determine whether the

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 16 of 28
               Act is applicable, the court looks to the substance of a claim. Van
               Sice v. Sentany, 595 N.E.2d 264 (Ind. Ct. App. 1992).
               Thus, regardless of what label a plaintiff uses, claims that boil
               down to a “question of whether a given course of treatment was
               medically proper and within the appropriate standard” are the
               “quintessence of a malpractice case.” Id. at 267 (plaintiff’s claims
               of fraud and battery fell within the Malpractice Act because the
               first was essentially a claim that the defendant failed to adhere to
               a standard of care and the second was a claim that the defendant
               did not obtain informed consent for a procedure); Popovich v.
               Danielson, 896 N.E.2d 1196, 1202-04 (Ind. Ct. App. 2008)
               (though styled as assault and battery, fraud, breach of contract,
               and defamation, all plaintiff’s claims involved defendant’s
               exercise of professional judgment and involved actions taken
               while providing medical care and thus the requirements of the
               Act applied).
               By contrast, to fall outside the Malpractice Act a health care
               provider’s actions must be demonstrably unrelated to the
               promotion of the plaintiff’s health or an exercise of the provider’s
               professional expertise, skill, or judgment. Kuester v. Inman, 758
N.E.2d 96 (Ind. Ct. App. 2001); Collins, 552 N.E.2d at 510 (Ind.
               Ct. App. 1990) (Act held inapplicable in cases where the conduct
               involved was “unrelated to the promotion of a patient’s health or
               the provider’s exercise of professional expertise, skill or
               judgment”).

       Howard Reg’l Health Sys. v. Gordon, 952 N.E.2d 182, 185-86 (Ind. 2011).

                                             1. Harts and Pluard

[18]   The PCF relies primarily on two Indiana cases to support its argument that

       alleged negligence in this case is not governed by the MMA. The first of these

       cases is Harts v. Caylor-Nickel Hosp., Inc., 553 N.E.2d 874 (Ind. Ct. App. 1990),

       trans. denied, in which the elderly plaintiff was injured when the railing allegedly

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 17 of 28
       collapsed on his hospital bed, causing him to fall out. Id. at 875-76. Harts

       argued, and the court agreed, that his claim against the hospital was not subject

       to the MMA. Id. at 879. In so doing, the Harts court relied on our earlier

       decision in Winona Memorial Found. of Indianapolis v. Lomax, 465 N.E.2d 731

       (Ind. Ct. App. 1984):

               “Such matters as the maintenance of reasonably safe premises are within
               the common knowledge and experience of the average person. Health
               care providers, who must make up the medical review panel…, are no
               more qualified as experts on such matters than the average juror. And
               as we have stated: ‘When … the matters at issue are within the
               common knowledge and experience of the jury, expert testimony
               regarding the exercise of reasonable care is improper and should
               be excluded.’ Emig v. Physicians’ Physical Therapy Service, Inc., 432
               N.E.2d [52, 53 (Ind. Ct. App. 1982)] (citing Rosenbalm v. Winski,
               (1975) 165 Ind. App. 378, 332 N.E.2d 249).”

       Harts, 553 N.E.2d at 879-80 (quoting Lomax, 465 N.E.2d at 740) (emphasis in

       Harts, first ellipsis added).

[19]   Noting that Harts’s allegations were limited to a claim that the hospital’s

       employees failed to properly restrain or secure the guardrail on his bed, we

       concluded that

               [t]he tenor of Harts’ complaint taken as a whole clearly supports
               an allegation of ordinary negligence. We cannot say that these
               allegations were part and parcel of diagnosis and treatment
               which would subject his claim to coverage under the Act. He did
               not allege any breach of duty directly associated with medical
               negligence that was integral to the rendering of medical treatment
               that would subject his claim to the Medical Malpractice Act.

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 18 of 28
       Harts, 553 N.E.2d at 879.

[20]   The PCF also relies on our decision in Pluard ex rel. Pluard v. Patients

       Compensation Fund, 705 N.E.2d 1035 (Ind. Ct. App. 1999), trans. denied. Infant

       Pluard was injured when a surgical lamp detached from a wall and fell on him,

       striking him in the head. Id. at 1036. After settling with the hospital, Pluard

       sought to recover excess damages from the PCF, which countered that the tort

       that caused Pluard’s injuries was not governed by the MMA. Id. We ruled in

       favor of the PCF, concluding that

               [t]he nurses’ assistant’s manipulation of the light, while very
               close in time to the light’s falling on Pluard, has not been alleged
               to have caused his injury. Pluard was injured because the light
               fell on him; the light fell on him because it was not properly
               attached to the wall. Put another way, the duty to secure the
               light, and even the nurses’ assistant’s duty to position it, did not
               involve a health care decision involving the exercise of
               professional skill or judgment. Instead, it involved the general
               duty to maintain safe premises and equipment. As such, it
               involves issues capable of resolution without application of the
               standard of care prevalent in the local medical community, and
               thus, is outside the purview of the Act, which requires convening
               a panel of medical experts for the purpose of judging a
               completely different kind of question. Even when we view the
               evidence in the light most favorable to Pluard, and accept the
               proposition that the light fixture’s fall was sufficiently proximate
               in time as to make it part of the ongoing care of Pluard, the
               nurses’ assistant being under the direction of the surgeon, it still
               was not an event that required the exercise of professional skill
               and judgment.

       Id. at 1038.

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[21]   The PCF contends that the court’s focus in Harts and Pluard was on whether the

       product was defective or misused during treatment. Specifically, the PCF

       asserts that the decisions stand for the proposition that if the product is

       defective, the claim falls outside the MMA, and, if the product is misused, the

       claims are governed by the MMA. It would follow, then, that because there

       have been no allegations that the Defendants misused the MPA, Plaintiffs’

       claims fall outside the MMA. We are not persuaded, however, that the PCF’s

       position is a reasonable reading of Harts and Pluard.

[22]   A fair reading of both decisions indicates that the court’s true focus in both

       cases was on whether the issues were capable of resolution without referring to

       the medical standard of care; if so, the claims would not be subject to the

       MMA. The Harts court stated that “[w]hen … the matters at issue are within

       the common knowledge and experience of the jury, expert testimony regarding

       the exercise of reasonable care is improper and should be excluded.” Harts, 553
N.E.2d at 879 (quoting Lomax, 465 N.E.2d at 740). The Pluard court also based

       its conclusion on this distinction, determining that the case involved “issues

       capable of resolution without application of the standard of care prevalent in

       the local medical community, and thus, is outside the purview of the Act,

       which requires convening a panel of medical experts for the purpose of judging

       a completely different kind of question.” Pluard, 705 N.E.2d at 1038. Contrary

       to the PCF’s assertion, Harts and Pluard stand for the proposition that matters

       are not subject to the MMA when they can be resolved without reference to the

       local medical standard of care.

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 20 of 28
[23]   With this in mind, we turn to Plaintiffs’ specific allegations. Plaintiffs have

       alleged that Defendants negligently decided to purchase preservative-free MPA

       from NECC and also negligently failed to properly investigate and evaluate

       NECC’s manufacturing procedures. The PCF asserts that these allegations are

       not covered by the MMA. We have little trouble concluding that the selection

       of preservative-free MPA—in particular, preservative-free MPA made by

       NECC—in favor of MPA with preservatives from other suppliers, were actions

       that involved the exercise of professional medical skill and judgment, i.e., they

       qualify as the practice of medicine.

[24]   We have observed that “[t]he practice of medicine may be said to consist in

       three things: First, in judging the nature, character, and symptoms of the

       disease; second, in determining the proper remedy for the disease; third, in

       giving or prescribing the application of the remedy to the disease.” Fowler v.

       Norways Sanitorium, 112 Ind. App. 347, 42 N.E.2d 415, 420 (Ind. Ct. App.

       1942) (quoting Underwood v. Scott, 23 P. 942, 943 (Kan. 1890)) (superseded by

       statute on other grounds as recognized by Sloan v. Metro. Health Council of

       Indpls., Inc., 516 N.E.2d 1104, 1106 (Ind. Ct. App. 1987)). We conclude that

       the allegations in this case clearly fall under the second aspect of the practice of

       medicine—selection of the proper remedy.

[25]   As mentioned, MPA is injected into the lumbar spinal region of patients to

       relieve lower back pain. In Anonymous Clinic’s case, the decision to

       administer preservative-free MPA was made by a physician, Dr. Kathryn Park,

       on the basis that preservatives can be neurotoxic. In OSMC’s case, the decision

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 21 of 28
       to purchase preservative-free MPA from NECC was made by its medical board,

       which consisted of Dr. Gene Grove and other physicians on OSMC’s board.

       Physicians at SMC determined that the preservatives in question could cause

       arachnoiditis and damage the spinal cord. Selection of preservative-free MPA

       clearly involved the practice of medicine.

[26]   We also conclude that the decision to purchase preservative-free MPA from

       NECC was an integral part of the remedy-selection process. For Anonymous

       Clinic, the decision to purchase from NECC was made by Dr. Park because

       NECC was, as far as she knew, the only supplier of preservative-free MPA;

       Anonymous Clinic had used other NECC products for years without problems;

       and NECC had a good reputation among other physicians. Put another way,

       Anonymous Clinic’s medical decision to administer preservative-free MPA

       necessarily involved an evaluation of NECC’s suitability as a supplier because it

       represented the only source known to the clinic. It is reasonable to assume that

       Dr. Park evaluated NECC’s suitability in light of Anonymous Clinic’s long-

       standing relationship with NECC and its reputation.

[27]   In the case of OSMC, the decision to source the MPA from NECC was also the

       result of a long-standing relationship. In 2005, OSMC began purchasing

       betamethasone and hyaluronidase from NECC after Elkhart General Hospital

       began ordering compounded pharmaceuticals from NECC. As it happens, in

       addition to being on the medical board of OSMC, Dr. Grove was chairman of

       the pharmacy and therapeutics board at Elkhart General and had become

       aware that the Elkhart General medical staff had authorized NECC as a

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 22 of 28
supplier. The record reflects that OSMC’s trust in Elkhart General’s vetting

process for pharmaceutical suppliers played a role in OSMC’s subsequent

authorization of NECC as a supplier. It is reasonable to assume that OSMC

weighed the potential benefits of using preservative-free MPA from NECC

against the potential risks and determined that purchasing the medication from

NECC was a reasonable approach. This decision is obviously one that was

made using professional judgment. In summary, pursuant to this court’s

holdings in Harts and Pluard, the line between MMA claims and non-MMA

claims divides them into situations that can be understood without the

assistance of expert testimony and those that cannot be, and the claims in this

case fall into the latter category.4

4
   Plaintiffs and OSMC bring our attention to two Indiana cases in which the court concluded that
claims involving allegedly defective products provided by medical providers to patients were
nonetheless subject to the MMA. See St. Mary Med. Ctr., Inc. v. Casko, 639 N.E.2d 312, 315 (Ind. Ct.
App. 1994); and Dove by Dove v. Ruff, 558 N.E.2d 836 (Ind. Ct. App. 1990), trans. denied.
It is worth noting, however, that in Casko and Dove, the plaintiffs were attempting to have their cases
treated as products liability claims, while the PCF is attempting to have the claims here treated as
general negligence. In the first situation, the question is whether the product was used as part of
medical treatment and in the second, whether the actions of the health care providers cannot be
understood by laypersons without expert testimony. While the holdings in Casko and Dove are certainly
not inconsistent with our conclusion in this case, the issues resolved are different and the reasoning is
not particularly helpful here.
Amici, who are health care providers and defendants in several cases involving defective MPA, note that
the U.S. District Court for the District of Massachusetts (“the MDL Court”) is currently overseeing
multi-district litigation (“MDL”) from jurisdictions nationwide involving steroids made by NECC in In
re: New England Compounding Pharmacy, Inc., Products Liability Litigation, No. 1:13-md-02419 (D. Mass.).
The MDL Court has dismissed claims regarding defective MPA under other states’ laws. As with Casko
and Dove, however, the plaintiffs’ claims in those cases are all claims of products liability, unlike the
negligence claims brought in this case. Consequently, the MDL Court’s reasoning is no more helpful in
this case than the courts’ reasoning in Casko and Dove.
Finally, the Amici have compiled a table of cases in their brief from other jurisdictions addressing the
question of whether the delivery of a product in the context of medical treatment can support a products
liability claim or whether the claim is one of medical malpractice. The Amici note that twenty-three of
twenty-five jurisdictions to consider the question have determined the claim before it to be one of

Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016                 Page 23 of 28
                                       2. Lack of Causal Connection

[28]   The PCF also contends that there is no causal connection shown in this case

       between the treatment of any individual patient and the exercise of medical

       judgment by any Defendants. The PCF’s argument is apparently that the

       decisions by Defendants to purchase preservative-free MPA from NECC, even

       if they did involve the exercise of medical judgment, occurred years before any

       of Plaintiffs received their treatments and were therefore made outside the

       provider-patient relationship. This position would seem to be based on the

       proposition that only decisions made by providers with specific patients in mind

       can be subject to the MMA. The language of the MMA is not so restrictive.

       “‘Health care’ means an act or treatment performed or furnished, or that should

       have been performed or furnished, by a health care provider for, to, or on behalf

       of a patient during the patient’s medical care, treatment, or confinement.” Ind.

       Code § 34-18-2-13. Nothing in the statutory language exempts decisions made

       by a health care provider regarding a general course of treatment for a particular

       class of patient. We conclude that general decisions that later affect particular

       patients are not exempt from the provisions of the MMA for an alleged lack of

       causal connection.

       medical malpractice and not products liability. Suffice it to say that, as with Casko, Dove, and the
       decisions rendered by the MDL Court, all of the holdings rely on the concept that medical treatment is
       primarily a service and not a sale of products and do not address negligence theories of the type brought
       in this case.

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016                 Page 24 of 28
                                          B. Policy Arguments
[29]   The PCF points out that, pursuant to the MMA, the total recovery in any

       malpractice action is $1,250,000 per injury or death. Ind. Code § 34-18-14-

       3(a)(3). Moreover, the MMA caps the health care provider’s malpractice

       liability at $250,000 per occurrence. Ind. Code § 34-18-14-3(b). Amounts in

       excess of this are payable from the PCF upon petition. Ind. Code §§ 34-18-14-

       3(c), -15–3. Also, subject to certain terms and conditions,

               [i]f an annual aggregate [of $750,0005] for a health care provider
               qualified under this article has been paid by or on behalf of the
               health care provider, all amounts that may subsequently become
               due and payable to a claimant arising out of an act of malpractice
               of the health care provider occurring during the year in which the
               annual aggregate was exhausted shall be paid from the patient’s
               compensation fund[.]

       Ind. Code § 34-18-6-6(a).

[30]   The PCF notes that OSMC faces approximately 100 individual claims while

       Anonymous Clinic faces approximately twelve individual claims. Assuming

       that Defendants are found liable for negligence following trial in all or many of

       these cases, the potential exposure could be significant. The PCF asserts that

       the General Assembly did not contemplate making the PCF the insurer of the

       safety of practically all products used in health care and suggests that a decision

       5
         It does not seem to be disputed that all Defendants have annual aggregates of $750,000 each pursuant
       to Indiana Code section 34-18-4-1(1)(C)(i), which provides that “[i]f the health care provider is a health
       facility, the minimum annual aggregate insurance amount is as follows:… For health facilities with not
       more than one hundred (100) beds, three (3) times [$250,000.]”

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016                  Page 25 of 28
       against it would subject it to strict liability in this and similar cases. The PCF

       further argues, essentially, that the allegedly increased potential liability it

       would face due to cases such as this would result in increased surcharges from

       healthcare providers to fund the PCF and jeopardize their ability to obtain

       affordable medical malpractice insurance.

[31]   Defendants counter that a determination that this case is governed by the MMA

       does not thwart but, rather, furthers the legislative intent. Defendants argue

       that the MMA was designed as a comprehensive medical liability insurance

       arrangement that struck a balance between ensuring both that (1) the patients

       injured by professional negligence receive at least some compensation and (2)

       health care providers can continue to provide affordable health care.

       Anonymous Clinic also argues that the PCF mischaracterizes Plaintiffs’ claims

       as product liability and that the PCF would not be subject to strict liability for

       defective products used in medical care. OSMC also points out that a statutory

       mechanism, i.e., Indiana Code section 34-18-5-4, already exists for increasing

       the surcharge on health care provides to maintain the PCF’s liquidity in the

       event of large payouts. In a nutshell, Defendants argue that even if the claims

       at issue in this case were to drain the PCF entirely, it is not this court’s place to

       ensure the PCF’s liquidity; this court’s only job is to decide if the claims before

       it are governed by the MMA. To the extent that there may be a public policy

       question with the MMA and the PCF, it is the General Assembly’s decision to

       address the question.

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 26 of 28
[32]   The Defendants and Plaintiffs have the much more defensible position here,

       namely that ensuring the PCF’s continued liquidity is not this court’s job. If,

       pursuant to the MMA’s plain language and under current precedent, the

       Plaintiff’s claims should be governed by the MMA, we should rule as such,

       whatever the consequences. See, e.g., Ind. Dep’t of Envtl. Mgmt. v. Chem. Waste

       Mgmt., Inc., 643 N.E.2d 331, 338 (Ind. 1994) (“The General Assembly has

       decided to concentrate the State’s energies on regulating commercial waste

       disposal facilities and it is not our job to second guess such decisions.”). Even if

       we assume that the claims in this case will result in payouts sufficient to

       threaten the viability of the PCF (which is by no means a foregone conclusion),

       we are not free to ignore the law in an attempt to save it.

                                                Conclusion
[33]   There is really only one issue before the court in this case, whether alleged

       negligence by a medical provider in selecting a certain drug from a particular

       supplier are claims subject to the MMA or sound in general negligence.

       Indiana law stands for the proposition that if allegations cannot be understood

       by laypersons without resort to expert testimony, the claims are governed by the

       MMA. We conclude the claims in this case, i.e., that Defendants were

       allegedly negligent in choosing to purchase and administer preservative-free

       MPA and in choosing NECC without proper vetting, are allegations that claim

       negligence in decisions that were made using professional expertise. Because

       we conclude that Plaintiffs’ claims are governed by the provisions of the MMA,

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 27 of 28
       we affirm the judgment of the trial courts and remand for further proceedings

       consistent with this opinion.

[34]   We affirm and remand for further proceedings.

       Pyle, J., and Altice, J., concur.

       Court of Appeals of Indiana | Opinion 71A03-1512-CT-2199 | November 7, 2016   Page 28 of 28