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Criminal vs. civil liability: What is the difference?
Surgeons under contract with a device manufacturer should examine all agreements for legal compliance and assume that all are being reported to the government.
 B. Sonny Bal |
Recent media coverage of surgeon/industry relationships has raised the possibility of criminal sanctions for violations of federal criminal statutes. Several orthopedic device manufacturers have been asked by the government to release details of financial exchanges with surgeons. In the future, more companies are expected to receive subpoenas to disclose information relating to consulting or service agreements with surgeons, relating to orthopedic implant procedures. Thus, the government has knowledge of surgeon identity and the nature of payments made through consulting contracts, royalty payments, and other contractual relationships.
The concern is that these data may be used by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services to hold surgeons liable for violations of applicable federal statutes. The OIG can refer selected cases to the U.S. Department of Justice for criminal sanctions. Since both criminal and civil sanctions are mentioned as possible penalties that could result from surgeon/industry relationships, this article examines the distinction and similarities between civil and criminal legal proceedings for proscribed conduct.
Civil law
Civil lawsuits are unfortunately all too familiar to orthopedic surgeons who are sued for alleged medical malpractice. Such lawsuits are part of civil law that seeks to resolve disputes between parties. One component, contract law, aims to resolve oral or written agreements between parties that are disputed, or have been breached. Another component, tort law, seeks to remedy wrongs or harms that have been inflicted by one person upon another, either intentionally or through negligence. A civil lawsuit is brought in the name of the aggrieved party by a law firm or an attorney. The system favors extensive discovery of facts by respective parties, and settlement of the dispute without resorting to trial.
If a defendant to a civil lawsuit is deemed to have acted unreasonably, eg, broken an agreement or caused intentional or negligent harm, then civil law provides remedies to address the wrong. Contract violations may be remedied by a court ordering the defendant do what was promised contractually, although money damages are usually substituted for performance since they are easier to compute and administer.
Damages allowed
For particularly egregious conduct or an intentional wrong, civil law allows both compensatory and punitive damages to address the dual goals of victim compensation and deterrence. In medical negligence for example, punitive damages could apply in cases of deliberate alteration of medical records by the defendant, or sexual assault on a patient — which may also result in criminal charges. Incarceration cannot be ordered by a civil court.
In civil proceedings, liability is proven by a preponderance of the evidence standard which means a greater than 50% probability that, based on the evidence, the plaintiff’s version of the story is accurate. A unanimous jury verdict is not required; usually only 9 out of 12 jurors need agree for a verdict to hold in a civil case. In medical malpractice cases, a civil action is brought under a subset of tort law known as professional negligence.
Negligence — the failure to do or not do something where a reasonable, similarly-situated professional would do otherwise — is a basic concept of tort law that serves as the dominant, although not the exclusive theory of liability in medical malpractice lawsuits. The patient suing the doctor must prove that is was more likely than not that the doctor breached a duty of professional care reasonably owed to the patient, and that such breach proximately caused damages.
Whistleblowers
Different legal concepts apply to surgeon/industry relationships. In addition to claims under state law, the False Claims Act (FCA) is a federal civil statute that provides monetary penalties against those who submit false or fraudulent claims to the government. Enacted during the Civil War to combat corrupt defense contractors who had bilked the government, the FCA was amended in 1986 to encourage more private whistleblower lawsuits and allow the government to prosecute more actions. The basis for having private whistleblowers initiate lawsuits on behalf of the government is grounded in the common law writ of qui tam, meaning “he who sues for the King as well as for himself.” If the government is successful after intervening in such whistleblower suits, the private plaintiff is entitled to a 30% share in the money recovered. By 2005, the federal government had recovered over $15 billion from FCA lawsuits, much of it from the health care industry.
In contrast to the FCA, the Anti Kickback Act (AKA) is a federal criminal statute. It prohibits payments in exchange for referrals or purchases that may be paid by a federal health care program. While the statute is broad, it offers some regulatory safe harbors. The AKA is a felony offense; penalties include imprisonment and mandatory exclusion from federal health care programs. In recent years, private plaintiff whistleblowers have successfully argued that a violation of the AKA criminal statute can also serve as the basis for a civil FCA claim. This expanded interpretation by federal courts has led to an increased number of contexts in which whistleblowers and the government have pursued AKA-FCA claims, including the type of consulting agreements now under scrutiny in the orthopedic industry.
Criminal law
Because criminal and civil courts express distinct paradigms of law, both criminal and civil proceedings against a defendant, for the same misconduct are not deemed double jeopardy. Criminal law seeks to punish and control conduct that is detrimental to society. The government is always the party that brings criminal charges against the wrong-doer on behalf of the people. Once government lawyers decide whether to file criminal charges, the grand jury serves to balance the enormous asymmetry in power between the individual and the government. A grand jury reviews preliminary evidence introduced by the government to see if there is sufficient cause to pursue the matter further. In federal criminal charges, the Fifth Amendment to the U.S. Constitution requires a grand jury indictment in every case; the word of the prosecutor is not sufficient to indict.
Assuming the grand jury returns an indictment, during a criminal trial the prosecutor must prove beyond a reasonable doubt that the defendant is guilty of the crime charged. Practically, this means a virtual certainty that the defendant is guilty; a unanimous jury verdict is required to convict a criminal defendant. Alternatives to criminal trial are plea bargains with the prosecutor, and monetary settlements to resolve the matter.
In the federal system, if a crime provides a potential incarceration of a year or more, it is a felony, regardless of actual jail time. Severe, disabling civil sanctions can automatically be attached to felony convictions; these can practically exclude an individual from civic participation in the U.S. by stripping away the right to vote, participation in government programs and benefits, professional licenses, and many types of employment. These collateral consequences of crime can attach to a criminal defendant despite successful plea bargaining with the prosecutor.
What surgeons should do
Surgeons under contract with a device manufacturer should examine their agreements for legal compliance and ensure that any monetary exchange reflects the fair market value of the services provided to the company. Careful documentation of the hours worked, services and products provided to the company and the billings submitted should be maintained.
If served with a subpoena, expert counsel should be retained to navigate the process. Particular care should be invested to avoid the appearance of impropriety, such as noncontractual financial support given by a device company to pay for continuing medical education (CME) programs, travel by the surgeon or clinical staff employed by the surgeon or elaborate meals, gifts, or entertainment. Assume that all consulting agreements and activities are being reported by the device company or its agents to the federal government.
For more information:
- B. Sonny Bal, MD, MBA, is associate professor of hip and knee replacement in the department of orthopedic surgery, University of Missouri School of Medicine. He can be reached at Missouri Hip and Knee Center, 204 Keene St., Suite. 102, Columbia, MO; 573-882-6762.