Did doctor lose coverage by altering patient record? Ask state court, 4th Circ says

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A stethoscope is seen. REUTERS/Benoit Tessier

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  • Affirms federal judge’s dismissal of insurance company’s duty-to-defend action
  • Panel points to ‘unsettled’ state-law issues, including whether policy provision is enforceable

(Reuters) - Virginia’s state courts should get the first crack at deciding whether a physician made material changes to her patient’s medical records — and if so, whether she voided her professional-liability insurance coverage by doing so, the 4th U.S. Circuit Court of Appeals held on Monday.

The 4th Circuit affirmed a ruling by a federal judge in Richmond, who refused to decide whether Medical Mutual Insurance Company of North Carolina had a duty to defend Dr. Rebecca Littaua against a state-court medical-malpractice action.

While insurers often file such actions in federal court, the judge rightly dismissed this one because it involved “difficult, complex, or unsettled” questions of state insurance law, Circuit Judge Roger Gregory wrote for the three-judge panel.

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MedMutual, now known as Curi, argued that Littaua had breached a policy condition that obligated her not to “alter, modify, or delete any evidence, or potential evidence” regarding any “claim or medical incident.”

Curi did not identify the alleged alterations, and the Supreme Court of Virginia “has not yet spoken as to what sort of record alterations are sufficient to breach such a provision, nor has it addressed whether such a provision is enforceable if it serves to void medical malpractice coverage,” Gregory wrote, joined by Circuit Judges Paul Niemeyer and G. Steven Agee.

“Virginia has a strong state interest to determine, in the first instance, how such a contract provision should affect its healthcare regime,” the panel added.

Curi and its attorneys did not immediately respond to requests for comment on Monday.

Attorneys for Littaua and the administrator of the estate of her former patient, Ki Hoon Yeon, also had no immediate comment.

The estate’s malpractice lawsuit alleges that Littaua and others provided negligent care for Yeon’s acute viral Hepatitis B infection in January 2018. He died from liver failure two weeks after his diagnosis.

Curi is defending Littaua against the malpractice lawsuit, but filed its federal action to be released from that obligation in 2020. It alleged it had recently learned that Littaua altered Yeon’s records a year after his death, around the time the malpractice suit was filed.

Senior U.S. District Judge Henry Hudson dismissed Curi’s suit, saying it could result in an “unnecessary entanglement” with the state-court proceeding. The 4th Circuit affirmed that finding as well, noting that proof of an alteration of Yeon’s medical records in the insurance case could also be used against her in the malpractice action.

The appeal decided Monday is Medical Mutual Insurance Company of North Carolina v. Rebecca Alejandrino Littaua; Tri-Cities Infectious Disease Associates, P.C.; Kyung Chun Yeon, administrator of the estate of Ki Hoon Yeon

For Medical Mutual Insurance Company of North Carolina: Danny Howell and R. Jackson Martin IV, Law Offices Of Danny M. Howell

For Littaua and Tri-Cities: Thomas Williamson Jr of Williamson Law

For Kyung Chun Yeon: Kyle McNew and Bryan Slaughter of MichieHamlett

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