Reeder v. State

• Decision Date: 13 May 2002
• Docket Number: No. A-00-1121.,A-00-1121.
• Parties: Randy REEDER, Appellant, v. STATE of Nebraska, Appellee.
• Court: Nebraska Court of Appeals

649 N.W.2d 504

11 Neb. App. 215

Randy REEDER, Appellant, v. STATE of Nebraska, Appellee.

No. A-00-1121.

Court of Appeals of Nebraska.

May 13, 2002.

Vince Powers, of Vince Powers & Associates, Lincoln, and, on brief, Denzel Rex Busick, Grand Island, for appellant.

Don Stenberg, Attorney General, and Royce N. Harper, Lincoln, for appellee.

SIEVERS, CARLSON, and MOORE, Judges.

SIEVERS, Judge.

Randy Reeder, a disabled individual, appeals the Hall County District Court's finding that a provider of nursing services who is paid by Medicaid funds distributed by Nebraska's Department of Health and Human Services (DHHS) is an independent contractor rather than a DHHS employee. Reeder, who suffered a recurrence of decubitus ulcers on his heels while the nurse provider cared for him argues that DHHS is vicariously liable for the alleged negligence of the nurse in treating the ulcers.

I. FACTUAL BACKGROUND

Reeder was paralyzed from the neck down and left with only limited use of his arms as a result of a car accident on May 5, 1990. He was released from the hospital on March 4, 1991, but due to his disability, Reeder required home health care. He qualified for the Aged and Disabled Medical Waiver program, a state and federally funded program administered by Nebraska's Department of Social Services, now known as DHHS. Individuals qualifying for this assistance program are referred to as "clients" of DHHS but choose their own service providers. A service provider may be a chore provider, an untrained or trained personal care aide (PCA), a licensed practical nurse (LPN), or a registered nurse (RN). A PCA helps the client complete the daily tasks of living, such as bathing, grooming, and dressing; cleans the client's immediate living space; and transports the client to doctor appointments. If DHHS receives an order from the client's primary physician, an LPN or RN may function as a service provider. 471 Neb. Admin. Code, ch. 13, § 002.02 (1998). Beyond obtaining the physician's order for private-duty nursing services, DHHS must authorize the number of hours to be worked based on the physician's order and the client's medical need. 471 Neb. Admin. Code, ch. 13, § 003.01 (1998). The regulations also specify billing and payment procedures.

One of Reeder's physicians, a Dr. McCammond, submitted an order stating that Reeder required the services of an LPN 1 to 2 hours daily and a PCA 4 to 5 hours daily. Reeder's home health nurse from Saint Francis Medical Center in Grand Island told him that Shari Perales had contacted DHHS for employment and that she was an LPN. Reeder met with Perales and notified DHHS in March 1991 that he had selected her to provide the LPN and PCA services he required. Dorelle Wilson, a DHHS caseworker, checked Perales' credentials, obtained references, and ran a background check. Perales signed two "Medical Assistance Provider Agreements," one allowing her to function as a trained PCA—due to her LPN licensing—and another to serve as an LPN. Both forms required her to follow DHHS policies and procedures in order to receive pay for approved services. The forms also required Perales to swear that she would keep accurate records of the services she provided and that she would provide all services to Reeder that she reported to DHHS for payment. Perales was given a DHHS manual describing the services covered by the program and a care plancreated by Wilson, Reeder, and Peralesthat listed the types and frequency of PCA and LPN services Reeder needed.

Perales was reimbursed for her services to Reeder by DHHS on an hourly basis, earning a higher rate of pay for her LPN tasks than for her trained PCA tasks. DHHS never withheld income taxes from her paychecks, but Perales' 1994 W-2 form shows that her Social Security taxes were paid by DHHS, at least in that year of Perales' service to Reeder. The W-2 form lists DHHS in the box where Perales' employer is identified, but that box also includes "EMPL REEDER RANDY H." Beyond following the care plan, Reeder and Perales decided the details of their work relationship, including the scheduling of Perales' performance of her duties, and Reeder verified the hours Perales worked before she submitted her timesheets to DHHS. If Perales needed to work more hours than authorized, she obtained Wilson's approval, but neither Wilson nor DHHS directed Perales' performance of her duties nor suggested medical treatment.

Perales' nursing duties encompassed Reeder's catheter care, suprapubic care, and bowel program. In May 1991, Reeder redeveloped decubitus ulcers on his heels which he first suffered and recovered from in 1990 after his accident. Although the DHHS manual directs providers to notify the primary or prescribing physician if medical problems arise, Reeder and Perales jointly decided to take Reeder to a podiatrist Perales had once seen for treatment, rather than to one of the physicians that Reeder had previously seen or his attending physician, identified on his initial care plan as Dr. McCammond. Perales notified Wilson that Reeder had been seen by a podiatrist and that she followed the podiatrist's orders in caring for Reeder. The severity and deterioration of Reeder's condition was not known until Perales asked the home health care nurse from St. Francis to look at his heels. As a result, Reeder immediately returned to the care of the doctor in Omaha who had previously treated his heels. Reeder had skin grafting and a long period of recuperation, but the ulcers never healed properly. He suffered a further loss of independence and mobility because the 2 hour daily treatment of his ulcers required the assistance of a nurse. Reeder's emotional health was adversely affected, he attempted suicide in June 1998, and he may need to have his feet amputated if infection reappears. Despite Reeder's filing of suit against DHHS in December 1993, Perales continued to work for him until May 1999.

II. PROCEDURAL BACKGROUND

Reeder filed suit in the Hall County District Court against DHHS, pursuant to the State Tort Claims Act, alleging that DHHS was negligent in failing to give appropriate instructions and training to the nurse whom DHHS approved for his care and that DHHS failed to exercise reasonable care in supplying and providing nursing services to him.

DHHS moved for summary judgment, and the district court held as a matter of law that no employment relationship existed between DHHS and Perales. Reeder appealed, and the Supreme Court found that the district court erred by holding as a matter of law that Perales was not a DHHS employee. It reversed and remanded the matter to the district court for trial to determine whether the evidence showed Perales to be a DHHS employee or an independent contractor. Reeder v. State, 254 Neb. 707, 578 N.W.2d 435 (1998) (Reeder I).

On October 27 and 28, 1999, the district court held another hearing on this matter. Depositions taken several years earlier from Wilson and Paula Greenfield, Wilson's supervisor, were admitted into evidence. Wilson testified that she was not required as a DHHS caseworker to possess medical training. She further testified that she viewed DHHS as the "payment vessel" and the client as the provider's employer. Greenfield concurred with Wilson, characterizing DHHS' role as "an agent for monitoring and payment." She also testified that she specifically informs providers they are not DHHS employees, pointing out that they are not eligible for employment benefits such as overtime, holiday, or sick pay. Greenfield said that DHHS does not monitor the care a provider gives a client but investigates if it becomes aware that the provider is placing the health or safety of a client in jeopardy. She added that the client makes the decision whether to fire a provider, but DHHS may overrule a client's decision to retain a provider if the provider is abusing or stealing from the client. Greenfield testified that DHHS is not directly involved with the medical care provided clients and that if any medical problems arise the providers are instructed to contact the client's primary care physician.

Nancy Olson, unit manager for longterm-care services in the Medicaid program, testified at trial that LPNs perform their duties under the direct supervision of a doctor or RN. She explained that LPNs receive a year of training before they sit for "boards" and become licensed by the State. Olson described LPNs as "independent providers the same as physicians, dentists, hospitals." Perales testified that she considered Wilson to be her supervisor, that she and Wilson regularly spoke about Reeder's condition, and that Wilson visited Reeder a couple of times. But Perales also stated that DHHS never provided her with the necessary tools or workplace to care for Reeder, that Wilson never directed Perales' medical treatment of him, that she received no medical training or employment benefits from DHHS, and that DHHS viewed Perales as an independent contractor.

The district court concluded that Perales' relationship to DHHS was such that there could be no vicarious liability and that it need not address the issues of negligence and causation presented by the evidence. From that finding, Reeder appealed to this court.

III. ASSIGNMENTS OF ERROR

Reeder assigns error to the trial court's (1) ruling that the nurse provider caring for him was an independent contractor rather than a DHHS employee; (2) failing to find DHHS vicariously liable by virtue of the control it exercised over the nurse provider, regardless of her employment status; and (3) not addressing the issues of negligence and proximate cause.

IV. STANDARD OF REVIEW

In a bench trial of a law action, a trial court's factual findings have the effect of a jury verdict and will not be set aside on appeal unless clearly erroneous. Phipps v. Skyview Farms, Inc., 259 Neb. 492, 610 N.W.2d 723 (2000). The appellate court does not reweigh the evidence but considers the judgment in a...