Compliance Perspectives: Genetic Test Labs Face Growing Risk of Medical Malpractice Liability

Compliance managers of lab involved in the $3 billion consumer-based genetic testing business need to safeguard their flank against a growing legal risk: the threat of liability for malpractice. As genetic testing has prospered in the past decade, it was all but inevitable that patients and trial attorneys would begin seeking to hold labs and doctors legally responsible for faulty DNA test results. The latest test case comes from South Carolina and involves one of the nation’s largest labs, Quest Diagnostics.

What Happened
Amy Williams was a sympathetic plaintiff with a highly compelling story. In 2005, the Myrtle Beach mom’s 2-year-old son Christian began experiencing regular seizures. Suspecting a mutation in the SCN1A gene, doctors sent Christian’s DNA for genetic testing to Athena Diagnostics (which Quest Diagnostics would later acquire in 2016). The report found a glitch in the gene but described it as a “variant of unknown significance” that, according to Athena’s classification “often has no effect” on normal gene activity. What Christian really had, according to Ms. Williams’ attorneys, was a rare condition called Dravet syndrome.

Athena could have and should have detected that Christian had Dravet, the complaint alleged; instead, the lab’s report led doctors to rule out Dravet and treat him with sodium-channel-blocking medications, which worsened his condition and intensified his seizures. A proper diagnosis would have prevented the fatal seizure Christian suffered on Jan. 5, 2008, according to the complaint.

The Plaintiff’s Legal Conundrum
After initially blaming herself for Christian’s death, Ms. Williams finally decided to sue Athena and its now parent company Quest (which for simplicity’s sake, we’ll refer to collectively as “Quest”). The problem: In South Carolina, the statute of limitations for medical malpractice is six years. However, the statute of limitations for negligence and wrongful death is three years from the date the plaintiff discovers he/she has a cause of action. Ms. Williams contended that she didn’t discover that she had a legal case against Quest and thus still had time to file her suit as a wrongful death action.

Not so fast, countered Quest, who claimed the case was essentially wrongful death based on medical malpractice and thus subject to the hard sixyear cap. The key question: Was Quest was acting as a licensed healthcare provider when it performed genetic testing on Christian? If so, the six-year medical malpractice statute of limitations would apply.

The Ruling
On June 27, 2018, the South Carolina Supreme Court ruled 4 to 1 in favor of Quest. “A genetic testing laboratory that performs genetic testing to detect an existing disease or disorder at the request of a patient’s treating physician is acting as a ‘licensed health care provider’ under [state law],” the Court reasoned. As a result, the case was time-barred.

Takeaway: Risk to Labs
While Quest came away with the win, the significance of the ruling is limited to the extent it was based on procedure and thus didn’t address the substance of the malpractice claim. Moreover, the case is legally binding within South Carolina and will likely have little influence in other states.

The real significance of the case is that it portends the larger trend of holding providers of genetic testing to the standards of medical malpractice. This is not the first time that labs and physicians have been sued for malpractice for making a faulty diagnosis from DNA test results.

As with the Quest suit, these cases have turned on whether the lab constitutes a health care provider for purposes of state licensing and malpractice laws. While Quest claimed it was, labs typically take the opposite position and claim they’re not licensed providers to avoid accountability under the malpractice laws. But courts have consistently found that DNA testing labs is, in fact, a form of health care covered by state licensing. Consequences:

1. The testing lab is subject to medical malpractice liability;
2. The liability risk period is prolonged because the statute of limitations for medical malpractice tends to be longer than for other state tort actions (although that wasn’t the situation in the Quest case); however,
3. Labs also get to benefit from tort reform measures designed to limit medical provider malpractice liability, e.g., caps on damages.

Previous Cases
So far, most of the medical malpractice cases against labs have alleged not wrongful death but wrongful birth, i.e., failure to diagnose pre-natal genetic disorders resulting in births that should and would have been aborted had the correct genetic information about the fetus been provided.