Brugaletta v. Garcia — Feb. 2017 (Summary)

NEW JERSEY PATIENT SAFETY ACT PRIVILEGE

Brugaletta v. Garcia
Docket No. A-4342-15T1 (N.J. Super. Ct. App. Div. Feb. 6, 2017)

The Superior Court of New Jersey reversed a lower court’s order compelling the production of hospital documents, holding that the documents were privileged under the New Jersey Patient Safety Act.  The case arose out of a complaint filed by a former patient, alleging that the hospital and various providers had negligently diagnosed and treated her condition.

Under the New Jersey Patient Safety Act, hospitals are required to create a safety plan and to establish a dedicated patient safety committee.  These committees are intended to provide processes for analyzing harmful events, including so-called serious preventable adverse events (“SPAEs”).  To encourage hospitals to comply with these obligations, the Patient Safety Act attaches a privilege to specific kinds of information generated by hospitals when investigating and reporting adverse events to regulators.  In this case, the defendant-hospital argued that the Patient Safety Act privileged one of the documents in its possession, which was characterized as an “Event Detail History with All Tasks.”

The lower court determined that even though the hospital had acted in accordance with the procedural requirements of the Act, the document revealed that the patient had suffered a separate SPAE.  Because the hospital had failed to report this other SPAE, the lower court ordered the hospital to disclose the portion of the document that described the SPAE (even though it revealed aspects of the hospital’s self-critical analysis).

On appeal, the Superior Court of New Jersey sided with the hospital.  It explained that the privilege for a self-critical analysis exists independently from a hospital’s compliance with the reporting obligations.  In particular, it concluded that the self-critical analysis privilege did not depend on reporting SPAEs to the state Department of Health.  It held that the trial court erred in compelling the hospital to disclose the documents and reversed the lower court’s order.

Lalonde v. Cent. Me. Med. Ctr. — Jan. 2017 (Summary)

INDEMNIFICATION POLICIES

Lalonde v. Cent. Me. Med. Ctr.
Docket: And-16-68 (Me. Jan. 31, 2017)

The Supreme Judicial Court of Maine refused to dismiss a claim for indemnification brought against a hospital by a physician whose employment it had terminated, on the basis that the hospital’s corporate bylaws language stated that the hospital would indemnify any person who was or is a party to an action, suit, or proceeding, by reason of the fact that the person was an employee of the hospital.  Interestingly, the physician was seeking indemnification for the costs associated with defending an investigation and complaint brought against him by the Board of Licensure in Medicine.  And that investigation and complaint arose as a result of the hospital filing a report with the Board stating that the physician’s employment was terminated “because of concerns about his clinical competence and behavior.”

The hospital claimed that it could not be made to indemnify the physician for his defense because it was immune from liability for reporting the physician’s termination to the Board.  The court agreed that the hospital was immune for reporting, but held that the claim for indemnification was unrelated to whether the hospital was the entity that reported the physician to the Board.  Accordingly, immunity would not apply to the claim for indemnification.

Charles v. S. Baptist Hosp. of Fla., Inc. — Jan. 2017 (Summary)

PSQIA – PATIENT SAFETY ORGANIZATIONS

Charles v. S. Baptist Hosp. of Fla., Inc.
No. SC15-2180 (Fla. Jan. 31, 2017)

The Florida Supreme Court reversed the state appeals court and held that, in the absence of a state law protecting certain documents from discovery, a hospital cannot claim privilege over records relating to adverse medical incidents (“Amendment 7” records) by declaring them to be patient safety work product and submitting them through a voluntary reporting system established pursuant to the Federal Patient Safety and Quality Improvement Act (“PSQIA”).

Through Amendment 7, the Florida constitution gives patients a right to access documents related to adverse medical incidents that are created or received by health care facilities and providers.  According to the Florida Supreme Court, the PSQIA creates a voluntary, confidential system for health care providers to share data about errors, with the aim of improving health care delivery.  In this case, pursuant to the PSQIA, the hospital established a patient safety evaluation system for purposes of reporting “events that are not consistent with the routine operations of the hospital or the routine care of a patient or that could result in an injury.”

The confidentiality of those records came into dispute after the hospital was sued for malpractice.  During discovery, the plaintiff requested documents related to adverse medical incidents at the hospital and related to any physician who worked at the hospital.  The hospital claimed that many documents that would be responsive, because they were adverse incident reports, were privileged under the PSQIA as “patient safety work product.”

The Supreme Court of Florida reversed the lower court and held that insomuch as state law required health care providers to compile data on adverse medical incidents, patients had a right to access this data through the Florida constitution and the PSQIA did not abridge this right.  Because Florida law required providers to create and maintain adverse medical incident reports for patients to access, the adverse medical data collected by the hospital was exempted from the PSQIA because it “exists separately[ ] from a patient safety evaluation system.”  The court further held that the hospital’s choice to place the data in a safety evaluation system did not, alone, transform the data into patient safety work product.

The court also held that the PSQIA did not preempt Amendment 7.  Accordingly, the court ruled that the hospital could not claim privilege over the documents.

Munoz v. Watsonville Cmty. Hosp. — Jan. 2017 (Summary)

EMTALA

Munoz v. Watsonville Cmty. Hosp.
Case No. 15-cv-00932-BLF (N.D. Cal. Jan. 25, 2017)

The United States District Court for the Northern District of California granted dismissal in part and denied dismissal in part in a lawsuit alleging that a hospital violated the Emergency Medical Treatment and Active Labor Act (“EMTALA”) when it failed to diagnose a patient’s internal hernia, peritonitis, and septic shock and discharged her, despite her complaints that her pain level was an 8 on a scale of 10.

The patient, who previously underwent gastric bypass surgery, died after twice presenting to the emergency department, on the same day, complaining of severe pain.  While the patient was examined, given a laxative and pain medication, and determined to be suffering from an emergency medical condition (severe pain), the decision was ultimately made to discharge the patient despite her complaints that her pain level remained an 8 on a scale of 10.  After returning home, the patient suffered a cardiac arrest, which led to her death.  The patient’s son sued, alleging that the hospital violated EMTALA because it performed a disparate or cursory exam and failed to stabilize the patient’s emergency medical condition prior to discharge.

The court granted the hospital’s motion to dismiss the claim related to the adequacy of the screening examination.  The court noted that just because the patient came to the same ED twice in one day does not mean the ED was required to provide the same screening examination during both visits.  In support of this finding, the court pointed out the fact that the circumstances were different during the second visit than they were during the first.  In the end, the court noted that while the son may be able to support a cause of action for malpractice, based on the hospital’s failure to identify the patient’s emergency medical condition, the son failed to present evidence of disparate treatment to support a claim for violation of EMTALA.

The court refused to dismiss the claim related to failure to stabilize, however.  The court noted that the emergency medical condition identified by the ED physician was “severe pain” and, despite this, the patient was discharged with a pain level of 8 out of 10.  Further, during the patient’s second visit to the ED, she was not provided pain treatment (instead being treated with Ativan, for anxiety, Haldol, an antipsychotic, and a soap-suds enema).  These allegations were sufficient for the son’s claim to survive dismissal and move forward for additional litigation.

Adem v. Des Peres Hosp., Inc. — Jan. 2017 (Summary)

PEER REVIEW – COMPOSITION OF HEARING PANEL

Adem v. Des Peres Hosp., Inc.
No. ED104191 (Mo. Ct. App. Jan. 24, 2017)

The Missouri Court of Appeals for the Eastern District affirmed the judgment of a lower court dismissing a physician’s claims for injunctive relief, temporary restraining order, and declaratory judgment against his former hospital employer.

The physician, a member of the medical staff at the hospital, was informed that his privileges were going to be revoked.  The physician requested a hearing, but objected to the appointment of the hearing panel, which allegedly failed to comply with the medical staff bylaws because it was comprised of practitioners who did not have sufficiently similar experience to the physician and because one of the panel members was employed by the hospital’s parent.  Although Missouri law typically does not allow judicial oversight of decisions regarding staff privileges, a physician may bring a claim for injunctive relief to require the hospital to abide by its bylaws before revoking privileges.

In this case, the court looked at the bylaws and found no specific provision that disallowed an employee of the hospital’s parent company to serve as a member of a peer review committee.  In fact, the bylaws required physicians to participate in peer review activities, when requested, as a condition of their continued clinical privileges.  Further, the physician did not object to the appointment of the panel within the period of time allowed by the bylaws.  As such, the court found that the physician failed to provide sufficient facts that showed an “express, material, procedural violation of the [hospital’s] bylaws.”

The court declined to determine whether the appointed peer review committee members were “sufficiently similar” to the physician in “practice experience, education or training” because Missouri’s rule of non-review, which allows a court to examine only the procedural guarantees of a hospital’s bylaws, precluded such an inquiry.  Accordingly, the court affirmed the judgment of the lower court.

Thomas v. Nationwide Children’s Hosp., Inc. — Jan. 2017 (Summary)

DISCOVERY – PEER REVIEW

Thomas v. Nationwide Children’s Hosp., Inc.
Case No. 2:14-cv-1236 (S.D. Ohio Jan. 19, 2017)

The United States District Court for the Southern District of Ohio granted the parents of two children, who were former patients at a hospital, their motion to compel against a hospital that refused to produce documents and limited one of its employee’s deposition, claiming that the information was privileged under the state’s peer review statute.

The issue arose out of the parents’ filing suit against the hospital, claiming that the hospital conspired to violate the rights of the parents and children who sought medical treatment at the hospital by ordering additional medical tests not for the purpose of diagnosing and treating the children but rather to gather evidence for possible criminal prosecution for child abuse.  After the parents requested information regarding the assessments of patient complaints that the hospital received about child abuse diagnoses, the hospital objected to providing certain information and documents, arguing that internal assessments of medical care were protected by the peer review privilege.

Both parties agreed to set aside a ruling on the issue pending other discovery, but the issue reemerged following the deposition of a nurse, who at the time was acting as a Performance Improvement Coordinator in the emergency department during the children’s visit.  The nurse’s role in her capacity was to review customer satisfaction and, if the resolution of a conflict involved writing a letter, the nurse would make an entry into a database system maintained by the hospital.

During the deposition, the hospital would not allow the nurse to answer any questions pertaining to the contents of any information in the database system.  Even though the nurse responded to a letter from the parents, writing that her team had reviewed the situation and concluded that the procedures performed were appropriate and followed hospital and state-mandated procedures, the hospital refused to allow the nurse to answer any questions regarding exactly how she investigated and arrived at her conclusion, citing protection under the peer review privilege.

The court ultimately concluded that the peer review privilege was inapplicable under the circumstances.  The parents’ letter to the nurse merely asserted that a number of additional tests, which were performed unnecessarily and done without their consent, were described inaccurately on their bill and asked for an explanation of why these tests were performed.  Therefore, neither the letter nor its response made any mention of the quality of the care provided or the competency of the physicians involved.

Because the parents’ letter did not question the competence of the health care providers who performed the procedures, but rather queried why the procedures were performed in the first place, the letter, in effect, sought information regarding the hospital’s administrative procedures, not its quality review process. Noting that the peer review statute applies only to activities that are actually peer review proceedings and not to every activity that a hospital labels peer review,  the court concluded that the nurse should have been permitted to answer the foundational questions about the process itself that did not involve determining whether any provider had acted professionally or competently. As such, the court granted the parents’ motion to compel and denied the hospital’s motion to strike.

U.S. ex rel. Polukoff v. St. Mark’s Hosp. — Jan. 2017 (Summary)

FALSE CLAIMS ACT – QUI TAM

U.S. ex rel. Polukoff v. St. Mark’s Hosp.
Case No. 2:16-cv-00304-JNP-EJF (D. Utah Jan. 19, 2017)

The United States District Court for the District of Utah granted three motions to dismiss brought by a medical center, physician, and hospital in a qui tam lawsuit under the False Claims Act (“FCA”).  The relator alleged that the physician violated the FCA by performing medically unnecessary patent foramen ovale (“PFO”) closures and subsequently billed the government for the procedures through Medicare and Medicaid.  In addition, the relator alleged that the medical center and hospital were liable for fraudulently billing the government for hospital costs associated with the alleged unnecessary PFO procedures.

The physician was initially employed by the medical center, but after violating an agreement to discontinue performing PFO closures in noncompliance with the medical center’s policies, the physician resigned and began performing PFO closures at another hospital.  The relator began working for the physician’s practice before the physician resigned at the medical center.  While serving as an employee of the physician’s practice and entertaining the possibility of purchasing the physician’s practice, the relator obtained the physician’s billing documents and a hard drive with eight years of billing records, which he used as the basis for his qui tam claim.

The court ultimately found that the relator failed to allege that the physician, medical center, and hospital knowingly made an objectively false representation to the government that caused the government to remit payment.  The relator alleged that the medical center, hospital, and physician represented to the government that the closures performed by the physician were medically reasonable and necessary, which was objectively false.  However, the court reasoned that the relator’s contentions were based on his own subjective medical opinion which could not be proven to be objectively false.

The relator relied on recommendations issued by the American Heart Association/American Stroke Association to support his claim of when the procedures performed by the physician were not medically reasonable or necessary, but Medicare does not require compliance with an industry standard.  Because the government had not created an objective standard, the relator was only able to rely on his own subjective and ambiguous “reasonable and necessary” standard, but violations of the FCA cannot be sustained absent an objectively false representation.  Thus, the court found that the relator’s claims failed as a matter of law and the court dismissed all the causes of action asserted against the physician, hospital, and medical center.

U.S. ex rel. Worthy v. E. Me. Healthcare Sys. — Jan. 2017 (Summary)

FALSE CLAIMS ACT – QUI TAM

U.S. ex rel. Worthy v. E. Me. Healthcare Sys.
2:14-cv-00184-JAW (D. Me. Jan. 18, 2017)

The United States District Court for the District of Maine granted in part and denied in part a hospital’s motion to dismiss claims related to alleged False Claims Act (“FCA”) violations brought by a former hospital employee.

The defendant hospital employed the relator, a certified professional coder and manager of patient accounts, for a period of two years, during which time the relator worked in the billing department with the hospital’s third-party billing contractor.  There, the relator alleged she was instructed to intentionally manipulate claims that were unpaid by Medicare by deleting necessary information, adding incorrect code modifiers to services, and unbundling services in order to bypass edits and increase reimbursement.  The relator then alleged that upon receiving this increased reimbursement, the hospital did not refund the overpayment, as required by law.

It was also alleged that the hospital coders were directed by management to identify high-value, unpaid claims, alter the codes, and resubmit the claims for higher reimbursement.  Examples of this allegation included that the hospital changed discharge status indicators, billed duplicative facility fees by unbundling three-day and same-day claims, created dummy accounts to cover up the fraudulently modified claims, rebilled paid claims, upcoded claims, and bypassed Medicare’s automatic withholding of payment in accident or injury cases by removing the injury information from the claims.

The relator claimed that she reported her concerns regarding the pattern of claim modification to the hospital’s officers, but that the officers did not address the billing practices.  When another third-party billing contractor assumed responsibility for the hospital’s outpatient billing, it was alleged that the billing company had knowledge of the hospital’s allegedly illegal practices and that it also began engaging in the same types of fraudulent billing practices.  The relator again raised concerns, but these, too, allegedly went unheeded.  The relator was terminated and then sued the hospital and independent billing contractors for retaliatory, constructive discharge and FCA violations.

The hospital made a motion to dismiss the relator’s claims on the theory that the relator had failed to provide facts specific enough to raise the inference that the hospital’s conduct rose to the level of an FCA violation.  However, the court refused to dismiss the relator’s FCA claims based on the Supreme Court’s recent Escobar decision and First Circuit Court of Appeals rulings.

With respect to the three-day and same-day claims, the court focused on whether compliance with the required bundling of services was a “condition of payment” under the Medicare statute and whether Medicare would have paid the hospital for the claims if it was aware that it had been unbundled contrary to statutory requirements.  The court held that it was “at least…plausible” that Medicare would not have paid the claims if it were aware of the hospital’s alleged fraudulent billing and active concealment of inappropriately submitted claims.  Because the billing practices were allegedly carried out with the third-party contractors’ actual knowledge that their actions were improper, and because the hospital’s alleged “reckless disregard” or “deliberate ignorance” of the truth allowed the fraud to persist, the court determined that the hospital was sufficiently aware of the violations for FCA liability to attach.

The hospital also argued that the relator failed to meet the FCA’s particularity requirement, that is, the relator did not provide enough specific evidence of wrongdoing to survive the hospital’s motion to dismiss her FCA claim.  The court disagreed.  By naming the specific staff members involved, enumerating the different types of fraudulent billing that took place, discussing how the manipulation of claims occurred, and delineating the period of time during which this all occurred, the court found the relator’s allegations established the “who, what, when, where, and how of the alleged fraud” and, therefore, were sufficient to avoid dismissal.

The court also ruled that the relator produced sufficient evidence that the court could infer collusion among the hospital and its third-party contractors to defraud the government.  The nonexistence of an express agreement was immaterial, the court added.

The court further found that the relator’s retaliation claim was sufficient to deny the hospital’s motion to dismiss.  Having informed management on multiple occasions of the violations of Medicare, the court found that the hospital’s actions toward the relator (i.e., unfounded accusations of poor work ethic and hiring a replacement for the relator without warning) led to the relator’s subsequent forced resignation.  Because there was an “infused management structure” between the hospital and its third-party contractor, the court determined that the contractor qualified as a joint employer for purposes of the retaliation claim.  Accordingly, the court denied the hospital’s and that third-party contractor’s motions to dismiss the retaliation claims under state law and under the FCA.

While the court denied the hospital’s and contractors’ motions to dismiss with respect to the FCA claims, it granted the defendants’ motions to dismiss the relator’s request for attorney’s fees and damages related to the constructive discharge claim.  The court also granted a motion to dismiss the relator’s claim against the other contractor with whom, the court ruled, she did not have a joint employer relationship.

Thomas v. Tenet Healthsystem GB, Inc. — Jan. 2017 (Summary)

MALPRACTICE PHYSICIAN AND HOSPITAL

Thomas v. Tenet Healthsystem GB, Inc.
No. A16A2167 (Ga. Ct. App. Jan. 18, 2017)

The Court of Appeals of Georgia reversed a lower court’s dismissal of a former patient’s amended complaint against a hospital.  The patient was taken to the hospital after being involved in a car accident and, upon arrival, the attending physician requested that a cervical CT scan be taken.  The scan was sent to a physician, who reviewed the scan at his home.  The physician communicated from his home to the attending physician that there were no fractures present in the scan.  Subsequently, the attending physician directed a nurse to remove the patient’s cervical spine collar and discharge the patient from the hospital.  When the patient’s brother arrived to pick her up, the patient was slumped over and unresponsive.  After being readmitted, it was discovered that the patient did in fact have a fracture in her cervical spine, and the removal of her cervical spine collar resulted in neurological damage, which rendered the patient a quadriplegic.

During discovery, the patient discovered that the hospital had a policy requiring physicians to remove cervical spine collars, and the nurse who removed her cervical spine collar had been trained on the policy.  Consequently, the patient sought to amend her complaint, alleging negligence against the hospital.  The lower court dismissed the complaint, reasoning that the claim was barred by the statute of limitations.

The court reasoned that because the patient’s original complaint alleged that the collar was removed by the hospital’s personnel, the hospital had fair notice of the same general fact situation from which the simple negligence claim arose.  In addition, both the original and amended complaints set out allegations about the improper removal of the cervical spine collar by an employee of the hospital, so the claim in the amended complaint arose out of the same conduct, transaction, or occurrence set forth in the original complaint.  Thus, the court reversed the judgment of the lower court and allowed the patient to amend her complaint.

Ramirez v. Long Beach Memorial Med. Ctr. — Jan. 2017 (Summary)

MALPRACTICE PHYSICIAN AND HOSPITAL

Ramirez v. Long Beach Mem’l Med. Ctr.
No. B265548 (Cal. Ct. App. Jan. 19, 2017)

The California Court of Appeal for the Second District affirmed the judgment of a lower court which held that plaintiffs who brought a wrongful death action could not conduct further discovery after summary judgment had been granted by the lower court for all but one defendant.

The plaintiffs represented a decedent who was rushed to the emergency room of the defendant hospital after being shot in the leg.  The hospital physician instructed the unit secretary to contact the on-call vascular surgeon.  After contacting the incorrect vascular surgeon initially, the unit secretary succeeded in reaching the correct vascular surgeon who arrived at the hospital, after a short delay, and operated on the decedent.  Prior to the vascular surgeon’s arrival and again after the four-hour surgery was complete, the decedent suffered heart attacks.  He was pronounced dead following the second heart attack.

At trial, the plaintiffs sued for malpractice and negligence, claiming that the delay in administering treatment to the decedent was the proximate cause of his death.  Both the plaintiffs and defendants summoned expert witnesses to testify.  At the summary judgment stage, the court found that the actions of the vascular surgeon, nurse, and on-call service all comported with their respective standards of care.  This ruling foreclosed any future litigation over the vicarious liability of the hospital for the actions of the exculpated individuals.

The plaintiffs requested additional discovery with respect to the on-call list and the unit secretary, the only other individual who took part in the care of the decedent the night of his death and who did not obtain a summary judgment ruling.  The plaintiffs premised this request for additional discovery on the unit secretary’s alleged negligence which, they argued, could be imputed to the hospital.  The court, however, disagreed.  The court held that the plaintiffs failed to raise an inference of negligence on the part of the hospital because there was no evidence that the unit secretary was in charge of creating or managing the hospital’s on-call list and, therefore, was not liable for the delay that resulted from contacting the incorrect physician.  Further, the plaintiffs’ expert witnesses made no argument during discovery regarding the unit secretary’s standard of care and, even if they had, the court found that the expert witnesses would have lacked foundation to competently attest to the “internal emergency room procedures regarding preparation and maintenance of a list of on-call physicians.”

Finally, the court pointed out that the delay in treatment was not, alone, sufficient evidence to bolster any inference of negligence committed by the hospital.  Because the plaintiffs’ expert witnesses did not produce any evidence of how the delay in treatment deviated from the standard of care in emergency room hospitals, the court found the plaintiffs’ allegations of the hospital’s negligence unfounded.  Accordingly, the court affirmed the lower court’s denial of the plaintiffs’ motion for further discovery and affirmed the award of summary judgment in the hospital’s favor.