State, Dept. of Social and Health Services v. Latta

• Decision Date: 18 October 1979
• Docket Number: No. 45962,45962
• Citation: 92 Wn.2d 812,601 P.2d 520
• Parties: The STATE of Washington, DEPARTMENT OF SOCIAL AND HEALTH SERVICES, Appellant, v. William LATTA, as administrator of Memorial Clinic, Ltd., P.S., Respondent. The STATE of Washington, DEPARTMENT OF SOCIAL AND HEALTH SERVICES, Appellant, v. K. L. PARTLOW, II, M. D., and R. F. Price, M. D., Respondents.
• Court: Washington Supreme Court

Page 812

92 Wn.2d 812

601 P.2d 520

The STATE of Washington, DEPARTMENT OF SOCIAL AND HEALTH

SERVICES, Appellant, v.William LATTA, as administrator of Memorial Clinic, Ltd.,P.S., Respondent.

The STATE of Washington, DEPARTMENT OF SOCIAL AND HEALTH

SERVICES, Appellant, v.K. L. PARTLOW, II, M. D., and R. F. Price, M. D., Respondents.

No. 45962.

Supreme Court of Washington, En Banc.

Oct. 18, 1979.

Slade Gorton, Atty. Gen., Walter E. White, David R. Minikel, Asst. Attys.Gen., Olympia, for appellant.

McPhee, Pope & Phillips, William Thomas McPhee, Olympia, for respondents.

HICKS, Justice.

In each of these cases, consolidated on appeal, the Department of Social and Health Services(DSHS) appeals an order of the Thurston County Superior Court quashing its subpoenas seeking medical records of Medicaid patients.The trial court based its order upon the physician-patient privilege, RCW 5.60.060(4).The Court of Appeals, Division Two, certified the case to this court.We accepted certification and we reverse the trial court.

Latta Case

There is essentially no dispute as to the procedural facts.March 3, 1978, DSHS caused an administrative subpoena duces tecum to be served upon William Latta, administrator of the Memorial Clinic (Clinic), a medical corporation, which participates in the medical assistance program of DSHS.The subpoena, issued in the course of a performance audit of the Medicaid program, ordered Latta to appear and "bring with you and produce all medical records of Memorial Clinic, Ltd., P.S. pertaining to" a certain minor child named therein, who was a recipient of Medicaid benefits.The subpoena was issued under authority contained in RCW 74.04.290.

Latta advised DSHS that the Clinic would not release the medical records without prior patient authorization.He then caused a letter to be written to the parents of the minor, requesting a release consenting to the furnishing of the child's records.

March 15, 1978, a second subpoena duces tecum was delivered to Carl Lippert, assistant administrator of the Clinic, commanding Latta to "produce all medical records of Memorial Clinic, Ltd., P.S. pertaining to" four named minors.Again, the demand to release the records without written patient authorization was refused.Letters were written to the parents seeking releases.

March 29, DSHS filed in Thurston County Superior Court a petition for enforcement of the subpoenas dated March 2, 1978 and March 14, 1978.The petition for enforcement alleged that the subpoenas were issued by an authorized Medicaid claims examiner conducting a performance review under the statute.An order was requested directing Latta to produce the records pursuant to the subpoenas or to show cause for failure so to do.Such an order was issued to William Latta, as administrator of the Clinic.

Latta moved the court for an order of dismissal and an order quashing the show cause order.The motion was based on two grounds: (1) the petition failed to state a claim on which relief could be granted; and (2) the issues involved the "substantial rights and privileges of persons who are necessary and proper parties to this proceeding but who are not joined as parties".The matter came on for hearing on April 28th.In the meantime, a release had been signed by the parents of the child whose records were sought under the March 2, 1978 subpoena, which mooted the contest over that subpoena.

Procedurally, counsel for Latta and the Clinic contended that the petition failed to state a claim because the two attached subpoenas (not incorporated by reference) deleted the names of patients.It was argued that failure to accompany the petition with the complete subpoena was fatal.The Clinic also raised the "question" of whether the proper parties were before the court.It stated "the petition seeks an order affecting the substantive rights and privileges of individuals who . . . are necessary and proper parties to this proceeding" under CR 19.Regarding the substantive issues, the Clinic asserted the physician-patient privilege, set forth in RCW 5.60.060(4), on behalf of its patients.It argued that the medical records are privileged communications protected under the statute; and absent waiver or written authorization, the Clinic could not be compelled to release the information.The Clinic also argued that its position was supported by consideration of medical ethics and a potential privacy invasion suit against it.

In its oral opinion, the trial court stated that it could not decide the question of whether the patients, as a matter of law, had waived the physician-patient privilege by accepting Medicaid assistance: "(the patients) should be parties to this suit for me to determine that."The court limited its decision to whether the physicians were justified in refusing to produce records.In its order entered on May 8, 1978, the court assumed, "without deciding, that the omission . . . of the names of the respective patients whose records are covered by the administrative 'Subpoena Duces Tecum' . . . is not material to deciding other issues raised," because the names had been provided on the subpoena served on the Clinic.The order further stated that the medical records sought by DSHS contained information acquired by Clinic doctors "in attending their patients to enable such physicians and surgeons to prescribe or act for those patients".It further granted the motion for dismissal with prejudice and quashed the show cause order.

June 5, 1978, DSHS filed a notice of appeal to the Court of Appeals.

Partlow Case

Drs. Partlow and Price are pathologists, who own and operate Olympia Medical Laboratory.Treating physicians refer patients to the laboratory for various tests.The doctors participate in the medical assistance program of DSHS.June 21, 1978, pursuant to RCW 74.04.290, an appropriate officer of DSHS issued a subpoena duces tecum directed to Drs. Partlow and Price and commanded them to:

produce all books of accounts pertaining to the records of Olympia Medical Laboratory and specifically: a) The accounts payable to major reference laboratories; b) The accounts receivable for physicians billed for laboratory tests; and, c) The physicians' laboratory test orders and corresponding laboratory test results for the Medicaid recipients from the attached lists.

The requested information pertains to and verifies claims which were submitted under the Medicaid program and for which payment was made by the Department to Olympia Medical Laboratory from January 1, 1977 through December 30, 1977.

The doctors declined to produce the records identified in the subpoena.Affidavits submitted by the doctors suggest that an offer of "piecemeal" compliance was rejected by DSHS, but the record brought to this court is void of any further information on the subject.The doctors did mail release forms to the approximately 30 patients named in the subpoena.

July 13, 1978, DSHS filed a petition for enforcement of the subpoena in Thurston County Superior Court.An order to show cause was issued.The doctors moved for dismissal on several grounds.The matter came on for hearing on July 20, 1978.Counsel stipulated to withdraw subpart (b) of the subpoena without prejudice.DSHS stipulated to accept information regarding accounts payable to major reference laboratories with patients' names deleted, whereupon the court ordered compliance with subpart (a).The court dismissed subpart (c) of the subpoena, which had requested test orders and test results for listed Medicaid recipients.November 18, 1978, based on its decision in the Latta case, the trial court entered its order of dismissal.DSHS filed a notice of appeal from the dismissal of enforcement of subpart (c).

The Court of Appeals consolidated the Latta and Partlow appeals and certified the case to this court, which we accepted.

We first address several procedural objections raised on appeal.Latta moves this court to dismiss the appeal on the basis of an inadequate assignment of error under RAP 10.3(a)(3).The assignment of error to which Latta objects is "appellant assigns error to the entire order of the court of May 8, 1978."The trial court's order consisted of two pages of recitation of "findings", followed by an order quashing the order to show cause.

We are of the view that dismissal would be inappropriate under RAP 10.7.Further, it is clear from reading the order that the court's action was premised on its finding that the physician-patient privilege, RCW 5.60.060(4), applies.The specificity of the issue before the trial court discloses the basis for assigned error pertaining to an issue of law; the objection of DSHS is adequately presented in its brief.Unlike Tremlin v. Tremlin, 59 Wash.2d 140, 367 P.2d 150(1961), cited by Latta, there is no requirement to search the record for possible error.SeeState v. Reader's Digest Ass'n, Inc., 81 Wash.2d 259, 501 P.2d 290(1972).

Latta also asserts that DSHS failed to state a claim.CR12(b)(6).RCW 74.04.290 permits DSHS to petition the superior court to enforce its subpoena."The petition shall be accompanied by a copy of the subpoena".In the instant case, the copy of the subpoena attached to the petition had the patients' names deleted.Latta argues that this omission was fatal and advances a number of arguments in support of this position.We find them to be without merit.The subpoenas served upon Latta, both the one that became mooted and the one here in contention, contained the names of the patients.Had the trial court required the patients' identities, a trial amendment would have sufficed.

Before the trial court, Latta asserted as a ground for dismissal under CR 19 that the patients named in the subpoenas were "necessary and proper parties."On appeal, Latta argues that the patients are indispensable parties and failure to join them as parties"provides an additional ground for sustaining the Trial Court's dismissal of...