Beamon v. Yale New Haven Hospital, Inc. – Mar. 2017 (PDF)

EMPLOYMENT DISCRIMINATION

Beamon v. Yale New Haven Hosp., Inc.
No. 3:16cv181 (JBA) (D. Conn. March 13, 2017)

United States v. Paulus — Mar. 2017 (Summary)

HEALTH CARE FRAUD

United States v. Paulus
No. 15-15-DLB-EBA (E.D. Ky. Mar. 7, 2017)

The United States District Court for the Eastern District of Kentucky granted a physician’s motion for acquittal and conditionally granted the physician’s motion for a new trial regarding his criminal conviction on health care fraud and false statements.

The physician allegedly performed unnecessary cardiac stents and misstated the severity of stenosis in medical records to retroactively justify the procedures.  The physician was indicted by a grand jury and was later convicted of committing health care fraud and making false statements relating to health care matters.  The physician asked the trial court to overturn the conviction, claiming that there was insufficient evidence for a reasonable jury to conclude that he devised a scheme to defraud a health care benefit program or that he knowingly and willfully made objectively false statements.

The court reviewed the government’s evidence to determine if it was sufficient to enable the jury to determine that the physician’s statements regarding his patients’ medical conditions were false beyond a reasonable doubt.  The government argued that  the physician’s profits, patient volume, and testimony of coworkers and patients were circumstantial evidence of falsity while offering expert opinions that contradicted the physician’s judgment as direct evidence of falsity.  The court ruled that these were both insufficient to prove falsity.  The circumstantial evidence would not allow a reasonable jury to find that the physician made false statements or harbored an intent to defraud.

The court also noted that the discrepancy in expert testimony, with respect to the appropriateness of the physician’s procedures, was consistent with intra-observer variability regarding the procedures.  The court pointed out that this variance of opinion undermined the certainty that is required for a criminal conviction, saying:  “expressions of opinion, scientific judgments, or statements as to a conclusion about which reasonable minds may differ cannot be false.”  Thus, to the extent that subjective medical opinions are incapable of confirmation or contradiction, they could not be used to establish proof of falsity.

Casale v. Nationwide Children’s Hosp. — Mar. 2017 (Summary)

PHYSICIAN EMPLOYMENT/REFERENCE RESPONSES

Casale v. Nationwide Children’s Hosp.
No. 16-3906 (6th Cir. Mar. 7, 2017)

The United States Court of Appeals for the Sixth Circuit affirmed a district court’s ruling in favor of a hospital following its rescission of an employment contract with a physician.

After gauging the physician’s interest and qualifications through a series of interviews, the hospital sent the physician a first offer letter.  The hospital and physician discussed salary, bonuses, and other terms of the position.  The hospital required the physician to obtain medical staff privileges at the hospital in addition to verifying his Ohio licensure, neither of which occurred in a timely manner.  After receiving a “poor” peer review reference from the physician’s previous hospital, as well as negative input provided by staff members after meetings with the physician to discuss credentialing issues, the hospital withdrew its offer of employment.  The physician sued, alleging breach of contract and defamation, among other claims.

The Sixth Circuit noted the presumption, in Ohio law, of at-will employment, meaning that unless the terms of a contract specify a certain period of time during which the contract would be valid, either party can terminate the contract.  The court held that the hospital’s offer letter included “no express durational term and no limit on either party’s ability to terminate the relationship.”  Thus, even though the contract provided for an annual rate of compensation, guaranteed bonuses, and future raises, the absence of a specific duration indicated that the contract was at-will.

The court similarly rejected the physician’s contentions that the hospital’s manifestations amounted to an implied employment contract.  The court found no implicit promise of definite employment and no evidence that the hospital intended to limit its ability to terminate the physician at will.  The court also dismissed the physician’s claims that the peer review reference constituted defamation; the court held that there had been no forced republication to a third party and the allegedly defamatory statements were “substantially true” in nature.  Therefore, the hospital was entitled to terminate the physician’s prospective employment by rescinding the offer.  Accordingly, the court affirmed the district court’s grant of summary judgment on all claims.

McGee v. St. Luke’s Health Network — Mar. 2017 (Summary)

PHYSICIAN EMPLOYMENT/REFERENCE RESPONSES

McGee v. St. Luke’s Health Network
No. 425 EDA 2016 (Pa. Super. Ct. March 7, 2017)

The Pennsylvania Superior Court affirmed a lower court’s judgment on a breach of contract claim and denied a physician’s request for a new trial on damages.

A hospital suspended the privileges of one of its physicians and eventually terminated his employment.  The physician later sought a letter of reference from the hospital’s vice president, which letter referenced several reasons for the physician’s termination at the hospital.  After the letter was sent, the physician sued, alleging defamation and tortious interference.  Eventually, the parties entered into a settlement agreement, one term of which required the hospital to provide a template letter each time the hospital received a reference request about the physician.  However, on two subsequent occasions – one sent to a licensure board and the other to a hospital – the hospital deviated from the language of the agreed-upon reference.

In the ensuing trial for defamation and breach of the settlement agreement, the jury awarded the physician an amount substantially less than the amount the physician’s expert had calculated that he was due.  Following post-trial motions, the court reduced the amount of the award because of faulty jury instructions.  The physician challenged this reduction on the basis that the expert’s testimony was unopposed and demanded a new trial on damages.

The court first discussed the hospital’s cross-examination of the physician’s expert.  Although the hospital did not provide its own expert to rebut the physician’s damage calculations, its cross-examination of his expert sufficiently challenged the assumptions of the expert so as to render his opinion controversial rather than uncontroverted.  The hospital’s failure to present contrary evidence or expert testimony, therefore, did not constitute acquiescence to the opposing expert’s opinion.  Thus, to the extent that the expert’s calculations were discredited by the hospital at trial, the jury was entitled to reduce the amount of the physician’s award.

The court also held that the lower court’s post-trial reduction of the award was appropriate because there was “no evidence supporting actual damages” suffered by the physician as a result of the hospital’s non-conforming letters.  Accordingly, the court affirmed the trial court’s decision and rejected the physician’s request for a new trial on damages.

Michaud v. Calais Regional Hosp. — Mar. 2017 (Summary)

EMTALA

Michaud v. Calais Reg’l Hosp.
No. 1:15-cv-359-NT (D. Me. Mar. 7, 2017)

The United States District Court for the District of Maine denied a hospital’s motion for summary judgment regarding alleged violations of the Emergency Medical Treatment and Active Labor Act (“EMTALA”).

A patient was receiving dialysis when he suffered a syncopal episode.  The patient was transferred to a hospital for evaluation.  Most of the patient’s test results came back normal, but the attending physician suspected that the patient’s syncope was potentially related to a serious, underlying cardiac problem.  Because the hospital did not provide dialysis services, the attending physician informed the patient and his family that he needed to be transferred to another hospital.  However, after a four-hour stay in the hospital, the attending physician changed his mind and informed the patient that he was being discharged instead of being transferred.  Shortly after arriving at home, the patient collapsed and died.  The patient’s wife sued the hospital, alleging that the hospital had violated EMTALA.

An EMTALA violation requires a plaintiff to demonstrate either that the screening provided by a hospital was inadequate or, based on the results of screening, that the hospital improperly transferred or discharged the patient in an unstable condition.  If a hospital performs a screening and determines that the patient has an emergency medical condition, then it is required to arrange for appropriate transfer or continuity of care to treat or stabilize the condition.  The court held that there was reasonable dispute as to whether the screening was “reasonably calculated to identify critical medical conditions,” whether the hospital knew that the patient had an “emergency medical condition,” and whether the patient was appropriately stabilized before discharge.  Accordingly, the court denied the hospital’s motion for summary judgment.

Melamed v. Cedars-Sinai Med. Ctr. — Feb. 2017 (Summary)

SUMMARY SUSPENSION/NPDB

Melamed v. Cedars-Sinai Med. Ctr.
B263095 (Cal. Ct. App. Feb. 27, 2017)

The Court of Appeal for the Second District of California affirmed a trial court’s ruling dismissing a physician’s challenge to a hospital’s summary suspension pending a peer review.

The physician performed an elective surgery on a 12-year-old patient for scoliosis.  Complications arose from the physician’s inappropriate choice of materials and the patient required corrective surgery.  Because the physician had continued the surgery despite lacking the appropriate equipment and because the physician was slated to correct the medical error by operating on the patient again, the hospital summarily suspended the physician’s medical staff privileges.  The physician was provided with notice of his hearing rights and the hospital reported his suspension to the National Practitioner Data Bank.  The physician requested a peer review hearing to challenge the summary suspension.  The peer review, and subsequent appeals, found that the hospital had acted reasonably in suspending the physician’s privileges.  The physician then filed a lawsuit alleging, among other things, retaliation for his alleged reports to management regarding patient safety concerns.  The hospital contended that the peer review process prevented the physician from bringing his claims in court.  The trial court agreed.

The appeal court noted that the physician would have to establish “a probability of success on the merits” if the hospital could show that his claims arose from the protected peer review process.  The physician did not show that his summary suspension occurred within 120 days of him filing a grievance with the hospital and also did not show that he filed any type of grievance, in the first place.  Accordingly, the court held that the hospital’s actions did not raise an inference of retaliation.  Furthermore, the physician brought the claim beyond the statute of limitations and, therefore, could not demonstrate that he was likely to succeed if the case went to trial.  The court also held that the decision to institute a summary suspension was part of the peer review process; and the peer review process, the court confirmed, was a protected activity because it represented “official proceedings authorized by law.”  As such, the physician’s post-operative report and his comments to the patient’s parents and staff did not constitute the filing of a formal grievance for which anti-retaliatory protections would apply.  The court affirmed the judgment of the lower court and denied the physician’s request for judicial review.

Rodriguez v. Reston Hosp. Ctr., LLC — Feb. 2017 (Summary)

FALSE CLAIMS ACT AND FAMILY MEDICAL LEAVE ACT

Rodriguez v. Reston Hosp. Ctr., LLC
No. 1:16-cv-623 (JCC/JFA) (E.D. Va. Feb. 28, 2017)

The United States District Court for the Eastern District of Virginia denied a hospital’s motion to dismiss claims brought by a former employee alleging violations of the False Claims Act (“FCA”) and the Family Medical Leave Act (“FMLA”).

The plaintiff, an x-ray technologist and staff supervisor, informed hospital management of his concerns regarding competency assessments of staff.  After this, the hospital posted an opening for a staff position in its radiology department.  The plaintiff removed an applicant from consideration on the basis that her previous firing precluded her from being eligible for the position.  The hospital’s human resources team revised the plaintiff’s decision and reinstated the application.  In the meantime, the plaintiff responded to a request from a second applicant about the open position.  The second applicant was eventually hired and, shortly thereafter, the plaintiff’s supervisor demoted him, allegedly for failure to report a workplace violence incident.  The plaintiff’s new role required training and supervision, which he alleged was provided inadequately and unreasonably.  The plaintiff then underwent shoulder surgery and obtained FMLA leave.  When the plaintiff returned to work, his supervisor required him to complete a “return to work” plan, something that the radiology department had not typically required.  When the plaintiff requested that his supervisor return paperwork that was necessary to complete the training and supervision requirements, the supervisor failed to do so.  Shortly afterward, the supervisor did not extend the training and supervision period to account for the duration of the FMLA leave and the plaintiff was terminated.  The plaintiff sued the hospital claiming violations of the FCA and FMLA.

Weighing in on the FMLA claim, the court held that the plaintiff took FMLA leave, was terminated, and provided sufficient facts to establish a causal connection between the two.  The court also found that the hospital interfered with the plaintiff’s FMLA leave, by placing additional requirements on the plaintiff’s return to work.  As to the FCA claim, the court found that the plaintiff adequately demonstrated that he engaged in “protected activity” by reporting his competency assessment concerns to management and was subsequently terminated; therefore, the court determined the plaintiff appropriately demonstrated that the reason for his dismissal could have been retaliatory in violation of the FCA.  Accordingly, the court denied the hospital’s motion to dismiss.

Manhas v. Franciscan Hammond Clinic, LLC — Feb. 2017 (Summary)

CREDENTIALING/RELEASE LANGUAGE

Manhas v. Franciscan Hammond Clinic, LLC
No. 45A05-1602-CT-328 (Ind. Ct. App. Feb. 24, 2017)

The Court of Appeals of Indiana reversed a lower court and held that the release language in a neurologist’s application solely applied to the entity that was credentialing the neurologist, not to the neurologist’s former employer.

A neurologist with a two-year employment agreement was notified by her employer, a clinic, that she was being terminated for cause due to her failure to obtain unrestricted hospital privileges at a local hospital.  The neurologist continued to work for the remaining six weeks of her employment agreement, but her employment was not renewed.  She filed a claim with the EEOC, alleging that she was terminated because she had notified the clinic that she was pregnant.  About one year later, the neurologist and clinic settled the discrimination claim.  As part of that settlement agreement, the neurologist was to direct all inquiries from prospective employers to the clinic’s director of human resources and, in turn, the clinic would “provide only the following information:  dates of employment, last position held, and salary.”

About a year-and-a-half later, the clinic received a request for a reference via an evaluation form from an Army Medical Center which had offered a temporary job to the neurologist.  The clinic’s medical director refused to complete the form; however, another physician did, rated the neurologist as fair and poor in the categories set forth on the form and stated that she had been terminated and was not eligible for rehire.  The Army Medical Center withdrew its offer to employ the neurologist, and she sued the clinic and the physician for defamation.

The clinic and physician claimed that they were third-party beneficiaries who were protected by the release language in the application that the neurologist signed when she applied to the Army Medical Center.  The language stated that the neurologist released the Army Medical Center, “its corporate affiliates, its current and/or former officers, directors and employees, its authorized agents and representatives and all others involved in this background investigation and any subsequent investigations, from any liability in connection with any information they give or gather and any decisions made concerning my employment based on such information.”

The Court of Appeals of Indiana held that this release language unambiguously applied solely to the entity that was credentialing the neurologist (the Army Medical Center and/or the temporary physician placement agency that was conducting credentialing on its behalf) – and did not apply to any former employer offering a reference for the neurologist.  Thus, the case was remanded to the lower court for additional proceedings.

Lewis v. Grady Memorial Hosp. Corp., Inc. — Feb. 2017 (Summary)

CHARITABLE IMMUNITY

Lewis v. Grady Mem’l Hosp. Corp., Inc.
A16A1877 (Ga. Ct. App. Feb. 22, 2017)

The Georgia Court of Appeals reversed a lower court’s grant of summary judgment in favor of a hospital, holding that the hospital was not entitled to charitable immunity as a matter of law since genuine issues of material fact remain regarding whether the hospital extended charity to the patient-plaintiff and whether the patient comes within the paying patient exception to the charitable immunity doctrine.

The patient filed a complaint against the hospital alleging that the hospital was liable for the sexual assault and battery committed upon her because a hospital employee failed to properly monitor the hallway leading to the patient’s room and, as a result, another patient was able to enter her room and assault her.  The hospital filed a motion for summary judgment asserting that the patient’s claims were precluded against it based on charitable immunity.  The lower court granted the motion and the patient appealed.

The appeals court explained that a charitable institution is not liable for negligence unless it fails to exercise ordinary care, but there is an exception – when a patient is not the recipient of charity, but pays for services and is injured because of negligence, the institution is liable.

In this case, after being admitted to the hospital, the patient executed a form providing that she was financially responsible for any charges not covered by her insurance plan.  During this time, the patient was employed and had health insurance through her employer.  The patient believed that her health insurance would pay for her treatment, but when the hospital submitted a claim for payment, for reasons unknown, the insurer denied the claim leaving an outstanding balance of approximately ten thousand dollars.  Subsequently, the patient’s attorney tendered to the hospital the outstanding balance of which the hospital accepted.

The court reasoned that the lower court erred in granting the motion for summary judgment based on its rationale that the patient was not a paying patient because her payment for services was tendered by her attorney.  Also, the court found that a patient who is unable to pay, but whose total expenses are paid by some other source, is not a charity patient because the charges are not borne by the public as an expression of charity.  Thus, the court reversed the lower court’s grant of summary judgment since the patient’s costs were paid in full and not charitably absorbed by the hospital nor borne by the public as an expression of charity.

Arnold v. Jewish Hosp. — Feb. 2017 (Summary)

PEER REVIEW

Arnold v. Jewish Hosp.
No. 2015-CA-000311-MR, No. 2015-CA-000427-MR (Ky. Ct. App. Feb. 24, 2017)

The Kentucky Court of Appeals affirmed a lower court’s ruling that peer review documents were not admissible at trial in a negligence case brought by the administratrix for the estate of a former patient against a hospital.

After the patient passed away from complications after a colonoscopy performed at the hospital, the hospital initiated the peer review process, which included a partial chart review by an independent physician, three committee meetings, written correspondence with the patient’s attending physicians, and a discussion with the Director of Nursing and Risk Management.

The lower court determined the peer review documents were inadmissible, the administratrix argued on appeal that the documents should have been admitted because they included statements pertaining to the appropriate standard of care not being met, and that there were concerns by the hospital with respect to the lack of communication between surgeons and nursing staff.

The appeals court stated that Kentucky is one of two states that permit discovery of peer review documents, but that just because such documents are discoverable does not mean it is relevant or admissible.  The court found that the peer review documents were not relevant to the issue of whether the hospital complied with the required standard of care, and assuming that the documents were relevant, the probative value of the documents was outweighed by the danger of unfair prejudice and confusion of the jury.  While the documents contained concerns relating to inadequate communication between the attending physicians, nurses, and the lab, they did not include any specifics as to which communications were inadequate or which nurses were involved.  Also, because the peer review committee did not review the case in its entirety or directly speak with the nurses or doctors involved in the case, the jury could have been confused or could have misinterpreted the committee’s concern as the equivalent of a legal standard of care violation. As such, the court concluded that the relevance of the documents was clearly outweighed by their prejudicial effect and affirmed the lower court’s ruling.