March 2011
Feature Story

Jack Bierig

And the implications of his lawsuit there for the interstate practice of pathology

The CAP adopted a policy in 1995 on “Licensure Requirements for Interstate Diagnosis, Including Interstate Telemedicine Practice.” That policy, codified as College policy ZZ, expresses the belief of the College that “a pathologist who engages in the interstate practice of pathology (including telepathology) and issues a pathology diagnosis that is contained in the patient’s medical record should have a full, unrestricted license to practice medicine from the state in which the patient presents for diagnosis or where the specimen is taken or image is made.” The policy goes on to provide that the “interstate practice of pathology occurs whenever a patient specimen, including a specimen slide or a specimen image, is sent from the state in which the patient presents for diagnosis to another location outside the state.” An “explanatory note” limits the breadth of policy ZZ. It adds that “(i)ntra-specialty consultation from an out-of-state pathologist should not require in-state licensure provided that the consultation is at the request of an in-state pathologist licensed within the state and if the consultation is reflected in a pathology report issued by an in-state pathologist.”

A federal court in Seattle recently cited the College’s policy on licensure requirements for interstate diagnosis in a case in which a pathologist in the state of Washington was found to have unlawfully practiced medicine in Idaho when she diagnosed an Idaho patient, Brad Smith. (See Smith v. Laboratory Corporation of America, W.D. Wash. No. CO9-1662-JCC, Dec. 30, 2010.) The diagnosis was based on a slide made from a skin biopsy taken from Smith by a physician in Idaho and sent to Laboratory Corporation of America in Washington. LabCorp prepared a slide of the specimen and sent the slide for diagnosis by a pathology group in Washington.

The pathologist who examined the slide in Washington called it “lichenoid hypertrophic actinic keratosis,” a benign skin condition. It turned out, however, that Smith actually had “an early, curable stage of malignant melanoma.” He filed suit in federal court in Washington alleging that the pathologist’s misdiagnosis decreased his chances of survival. In essence, he claimed to have been injured by the negligent diagnosis of a pathologist who was not licensed in Idaho.

The court began the relevant portion of its discussion by asserting that “Idaho has an interest in ensuring that its citizens are treated by licensed physicians.” That interest was expressed in what the court characterized as “an aggressive statute to prevent unlicensed out-of-state doctors from practicing on Idaho residents.” In particular, § 54–1804 of the Idaho Code makes it a felony for an out-of-state physician to practice in Idaho unless the physician “is called in consultation by an Idaho-licensed doctor, is invited to conduct a lecture, clinic, or demonstration, or is administering a remedy, diagnostic procedure, or advice as directed by a physician.”

The precise wording of the Idaho statute is crucial to the analysis. Subsection (2) of § 54–1804 provides that, subject to the three exceptions just noted, “it shall constitute a felony for any person to practice medicine in this state without a license. ...” (emphasis supplied). Subsection 4 goes on to direct that proof of the rendition of medical services by an unlicensed physician “constitutes prima facie evidence of negligence shifting the burden of proof to such provider of unlawful services.”

There was no doubt that the defendant pathologist had practiced medicine in making a diagnosis of Smith’s condition from the slide. Nor was there any doubt that the pathologist was not licensed to practice in Idaho. Indeed, the pathologist never set foot in Idaho. Thus, the controlling question was whether the pathologist had practiced medicine “in this state,” that is, Idaho, when she sat at a microscope in Washington and rendered a diagnosis on a patient from Idaho.

The court held that the pathologist had, on these facts, practiced in Idaho. It began by invoking the College’s position that “pathologists who engage in interstate practice should have a license to practice in the state where the patient presents for diagnosis and the specimen is taken.” It then noted a 2006 statement of the Idaho Board of Medicine that “pathologists who review tissue samples taken from Idaho patients and who render diagnoses from these samples for inclusion in an Idaho patient’s chart are practicing medicine in the state of Idaho, regardless of where they are physically located.”

The court was not persuaded by the pathologist’s argument that she fell within the exception for performing a consultation or diagnostic procedure as directed by a physician. It noted that the pathologist never made contact with the physician who took the biopsy or with any other Idaho physician. Thus, no exception was available to take the pathologist’s conduct out from the prohibition of the Idaho statute.

The court concluded that the pathologist had practiced “in this state” and therefore violated the Idaho statute against unauthorized practice. As a result, the patient will be deemed to have made out a prima facie case of negligence in the diagnosis. Given the significant difference between lichenoid keratosis and malignant melanoma, the pathologist may well have been found negligent in any event. But the case sets an important precedent for situations in which the negligence issue is far more debatable. Moreover, beyond the issue of civil liability, the Idaho attorney general could bring criminal charges against the pathologist for practicing medicine in Idaho without a license.

It is, of course, possible that the decision of the district court will be reversed on appeal. It is also still possible that, if the case goes to trial, the pathologist will be found not to have been negligent despite the prima facie case of negligence required by the statute. Moreover, it is unlikely that the pathologist will be indicted by the attorney general of Idaho. Nevertheless, an important lesson emerges from the decision in Smith v. LabCorp.

Specifically, pathologists who review specimens from out-of-state patients should familiarize themselves with the licensure statutes, regulations, and rulings in every state from which they accept specimens. Large national laboratories are, in many instances, already obtaining licenses for their pathologists in the jurisdictions from which specimens originate. But, as the Smith decision illustrates, this practice is far from universal among hospital-based pathologists.

Significantly, not all states have laws as restrictive as Idaho. Somewhat ironically, Washington, for example, imposes no limits on the practice of an out-of-state physician as long as the physician does not open an office in that state. The law on this issue varies widely from jurisdiction to jurisdiction. However, with respect to states with restrictive licensure laws, a pathologist should either become licensed or refuse to accept specimens from that state unless an exception clearly applies. Otherwise, the risks of a malpractice action by an out-of-state patient who is arguably misdiagnosed are just too great.