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NASCAR admits that catch-fence system failure is not new. Remarkably, in a moment of candor, Steve O’Donnell, NASCAR’s senior vice president for racing operations, remarked “‘This is not new.'” Viv Bernstein, NY Times, dated February 24, 2013. It truly is not. In 1987, the gravity of this known danger of poorly designed catch-fencing systems was exposed. During the Thursday, May 7, 1987, time-trials for the Indy 500, one of Roger Penske’s race cars crashed into the concrete wall at turn 4, shedding its right front wheel. Hungness, Carl (1987). The 1987 Indianapolis 500 Yearbook. Carl Hungness Publishing (there also exists, actual video footage of this incident with Roger Penske witnessing its occurrence). The wheel assembly careened over the catch fence and into the grandstands. Fortunately – then – no one was seated in the grandstands. Days later, Indy’s luck ran out when Race-car driver, Tony Bettenhausen’s wheel assembly flew over the catch fence and killed Lyle Kurtenbach. Staff writer, Los Angeles Times, May 25, 1987. The height of the crash wall at Indy was 31 inches and the catch fence system was 14 feet. In 1993, the Indianapolis Motor Speedway underwent major renovations and safety improvement. The crash wall height was increased to 42 and the catch fence to 19 feet, 18 inches coupled with increased arcing over and above the racetrack. Despite this history and industry knowledge, Penske Motorsports, Inc. and Michigan International Speedway, did nothing to modify, improve or make safer its catch fencing system. Its crash wall remained at 48 inches and catch fence only at 11 feet. And the consequence of that failure proved horrific when, on July 26, 1998, race car driver Adrian Fernandez crashed into the wall at turn 4, and his car’s wheel assembly careened over the fence into the grandstands, killing three spectators and maiming several others. After this horrible incident, in August of 1998, the Michigan International Speedway hurriedly implemented safety modifications to its fencing system that were readily known and available to the industry. The fence was raised to 17 feet above the well, still shorter than Indy’s improvements. The arcing or overhang was also extended by 4 additional feet. But it appears that these heights still remain inadequate. That is because Daytona’s catch fence purportedly measures 22 feet. Images of the catch fence, however, illustrate that although it is taller than either Indy or Michigan, it does not arc or reach out over the race-track in the manner and design of Indy’s or Michigan’s. Again, these are just lay observations from the available photography when compared to the actual designs of Michigan’s, for example. But clearly, it is a relevant starting point to any investigation into any potential personal injury damage claim brought by an injured fan.

Authored by L. Page Graves

Race car wheel assemblies keep flying over catch fences. For the motor-sports industry, that is neither new nor a freak accident. And with the recent incident at the Daytona 500 last Saturday, with yet another wheel assembly flying over the catch fence system, NASCAR and the motor-sports industry are renewing their historical debate about fan safety and catch-fence systems. It should be noted that despite this unedited footage from ABS News, Daytona President Joie Chitwood, III, said Sunday that he did not know if the wheel went over the fence, or through it. Jim Utter et al, Charlotte Observer, dated February 25, 2013. Respectfully, the ABC footage linked herein dispels NASCAR’s/Daytona’s attempt to shape the public message. According to H.A. “Humpy” Wheeler, former president of Charlotte Motor Speedway, “‘The worst thing that anyone can think about is a wheel going over the fence.'” Utter, supra. The motor-sports industry has been debating with themselves for years about fan safety versus revenues. According to Samuel Gualardo, past president of the American Society of Safety Engineers and referring to simply moving fans away from the track, “‘Obviously it will be a revenue decision by track owners because you’ll be eliminating that set of rows [and] [t]hat’s probably why they haven’t done it.'” Utter, supra. According to Izod IndyCar Series champion Ryan Hunter-Reay, “It’s an industry-wide problem, and one we can fix quickly.'” And further, Reay said “‘We’ve been talking about it for a long time….'” Olson et al, USA Today, February 24, 2013. Echoing Reay’s comments is three-time Indy 500 winner Dario Franchitti, who tweeted “‘it’s time @ indycar @ nascar other sanctioning bodies & promoters work on alternative to catch fencing. There has to be a better solution.'” Nate Ryan, USA Today, February 24, 2013. But as the foregoing historical debate documents, there are better solutions which have been available to the industry for years; time and time again, though, what is getting in the way of those safety improvements is the bottom line to the track owners and the industry.

Smith & Johnson Attorneys, P.C., are experienced in handling race car crash debris litigation. L. Page Graves served as assistant legal counsel and research counsel for one of the families who tragically lost a loved one during the 1998 Michigan International Speedway incident which when, on July 26, 1998, race car driver Adrian Fernandez crashed into the wall at turn 4, and his car’s wheel assembly careened over the fence into the grandstands, killing three spectators and maiming several others. Critical to that successful resolution of the family’s wrongful death claim was counsels’ tireless research and documentation of the motor-sports industry’s actual knowledge of the exact risks posed to its fans and its repetitive, reactionary approach to “fixing the problem” each time a spectator got hurt or killed.

Patients of Bronson Methodist Hospital, in Kalamazoo, Michigan, were involved in motor vehicle accidents and sustained traumatic, orthopedic injuries requiring surgical implants.  Pursuant to the no-fault act (MCL 500.3107(1)(a)), Bronson submitted its charges incurred by the patients to the liable no-fault auto insurer (Auto-Owners Insurance Company) for payment.  The no-fault insurer paid the health system’s charges except for the line item for the implants.  For payment consideration and pursuant to a different section of the no-fault act (MCL 500.3157 and MCL 500.3158), Auto-Owners requested that Bronson disclose its actual cost to acquire the implants.  Bronson refused to disclose this proprietary information.  Consequently, Auto-Owners refused to timely issue payment for the full amount of the implant charges submitted.  Bronson filed suit to compel payment of the charges incurred by the patients for the implants.

During the course of the litigation, Auto-Owners (relying on CorVel Corporation, its retained audit/review company’s recommendation) issued payment for what it maintained was in line with what the health system actually paid for the implants, plus a 50% mark-up.  At the trial court, Bronson requested the court to rule that it was not obligated to disclose its proprietary information and that it was entitled to be paid the full charge incurred by the patient.  The trial court agreed.  Auto Owners, therefore, appealed the decision.

In a Published Opinion dated February 16, 2012, the Michigan Court of Appeals reversed the trial court and held that a health system’s actual procurement costs for surgical implants is subject to disclosure for payment consideration by auto no-fault insurers.  The court, however, limited the application of its newly announced rule solely to “durable medical supply products at issue here.”

What this means for patients and providers.

First, the Bronson case is binding law now in Michigan.  It will remain so unless and until our Michigan Supreme Court says otherwise.  An appeal to the Michigan Supreme Court is discretionary and not guaranteed because the Supreme Court may decline Bronson’s request which effectively means it agrees with the current rule.  Bronson has 42 days to preserve a timely application to appeal the decision.  MCR 7.302(C)(2).  At this time, no application has been filed yet.  You can track the appellate history of this case here.

Second, as you see in this case, Bronson did not disclose the amount of its hard costs and yet, it still was paid a portion of its bill.  For health systems, generally, that will be the likely outcome going forward when a health system decides to continue its internal policy to withhold the proprietary data.  If the hospital decides to pursue the balance bill in litigation, however, then the data will be subject to disclosure.

Finally, in deciding whether to initiate that balance bill case, health systems must be able to demonstrate with other evidence that there is more to the overall cost to delivering an implant to a patient besides its raw, wholesale cost.  What about the costs to store/maintain its purity from contamination before actual use?  What about insurance costs to protect against its loss from contamination or fire before use?  This list of added over-head to the delivery of the implant  is incomplete but it is intended to help illustrate how health systems should begin analyzing and developing their case response.  Recognize, too, that a built-in profit is o.k..  A jury gets that.  It also understands over-head.  So, what is the total over-head to deliver the implant?  That answer is what will justify a health system’s cost-to-charge ratio.

You can read the Published Court of Appeals opinion here.

Authored by L. Page Graves