Emergency Med. Care Facilities, P.C. v. BlueCross BlueShield of Tenn., Inc. — Jan. 2017 (Summary)

EMTALA

Emergency Med. Care Facilities, P.C. v. BlueCross BlueShield of Tenn., Inc.
No. 15-1014 (W.D. Tenn. Jan. 19, 2017)

The United States District Court for the Western District of Tennessee refused to accept federal jurisdiction over a lawsuit brought by a provider of emergency care services (hospital emergency department screenings and treatment) against a Medicaid MCO, challenging the MCO’s unilateral decision to limit payments for emergency medical screenings performed in hospital emergency departments to $50 whenever the visit is afterwards determined to be non-emergent.

The MCO claimed that since the limit on payment was dictated by the state of Tennessee’s Medicaid managed care system, it was a directive from the state and had the force of law and, in turn, was automatically incorporated into the parties’ contractual agreement.  The provider of emergency care services disagreed that the payment cap had the force of law and instead argued that the MCO breached the contract by unilaterally implementing the payment change.  But, in the alternative, the emergency care provider claimed that if the cap on payment implemented by the MCO did have the force of law, then it was contrary to state law defining “emergency medical condition,” as well as the federal Emergency Medical Treatment and Active Labor Act (“EMTALA”).  In response to this argument, the MCO issued a notice to remove the lawsuit from state to federal court, on the basis that the arguments made by the provider of emergency care services referred to federal law and, in turn, presented federal questions.

The federal court declined jurisdiction.  Among other things, the court held that simply because the contract between the MCO and the provider of emergency care services required the provider to abide by EMTALA did not mean that federal question jurisdiction exists.  Accordingly, it remanded the case to state court for further proceedings.

Offor v. Mercy Med. Ctr. — Jan. 2017 (Summary)

EMPLOYMENT DISCRIMINATION

Offor v. Mercy Med. Ctr.
No. 16-839 (2d Cir. Jan. 20, 2017)

The United States Court of Appeals for the Second Circuit affirmed in part, vacated in part, and remanded in part the ruling of a lower court on a physician’s racial discrimination, retaliation, and hostile work environment claims.

The physician, an African-American female of Nigerian descent, alleged that while employed at the defendant hospital, she was denied vacation time and moonlighting hours due to her race and national origin.  Later, the physician was placed in a probationary program, where she alleged that the hostile work environment and discrimination persisted.  Eventually, the physician filed a complaint with the Equal Employment Opportunities Commission (“EEOC”) and was terminated by the hospital.

The court found that the physician’s claims of discrimination were not sufficient to survive a motion to dismiss because the physician’s comparators (other employed physicians who allegedly received better treatment than she did despite their supposedly equal status) were not, in fact, “similarly situated in all material respects.”  The physician also claimed a violation of the Family and Medical Leave Act (“FMLA”).  Because the physician brought her claim nearly three years after the hospital allegedly denied permission to take vacation time, the physician was required to prove that this denial was a “willful” violation of the FMLA.  The court pointed to the fact that the physician was eventually permitted to take the vacation time and that the hospital, at the time, offered reasonable explanations for denying her request.  Accordingly, the court affirmed the lower court’s dismissal of the claims that related to discrimination and the FMLA.

The court did, however, find evidence sufficient to raise an “inference of retaliatory intent” in the hospital’s decision to place the physician in a probationary program only a month after she had retained an attorney and attempted to exercise her FMLA rights.  Because the physician attempted to exercise her FMLA rights, was qualified for her position, and suffered an adverse employment action, the court vacated the lower court’s dismissal of the physician’s retaliation claim.

Stafford v. Burns — Jan. 2017 (Summary)

EMTALA

Stafford v. Burns
No.1 CA-CV 15-0476 (Ariz. Ct. App. Jan. 17, 2017)

The Court of Appeals of Arizona affirmed a lower court’s instruction that the parents of a deceased patient bore the burden of a heightened standard of proof.  The case arose out of a patient arriving at a hospital’s emergency room having ingested an unknown amount of methadone.  After hours of treatment and testing, the tending physician discharged the patient.  The patient was found dead the next day, and his parents subsequently filed a complaint against the tending physician, alleging that she negligently caused the patient’s death by discharging him prematurely.

The lower court returned a defense verdict in favor of the physician, to which the parents appealed arguing, in part, that because the physician did not provide medical care in compliance with the Emergency Medical Treatment and Active Labor Act (“EMTALA”), the lower court incorrectly required the parents show a heightened burden of proof.

At the outset, the court found that EMTALA applies whenever a person comes to the hospital for “what may be” an emergency medical condition.  Consequently, because the patient came to the hospital seeking treatment for what may have been an emergency medical condition, the physician was required to provide EMTALA mandated services.  Therefore, the lower court properly invoked a heightened burden of proof as required by an EMTALA claim.

Underwood v. Roswell Park Cancer Inst. — Jan. 2017 (Summary)

RACE DISCRIMINATION – RETALIATION

Underwood v. Roswell Park Cancer Inst.
Case No. 15-CV-684-FPG (W.D.N.Y. Jan. 13, 2017)

The United States District Court for the Western District of New York granted in part and denied in part motions to dismiss filed by a defendant hospital and hospitalist against claims of racial discrimination, whistleblower retaliation, hostile work environment, and breach of contract brought by a former staff physician.

Over the course of several years, the physician was subjected to various adverse employment events.  As early as 2008, the physician noticed that his salary, calculated by an objective determination of multiple clinical performance factors, was lower than that of his similarly-situated, white colleagues despite demonstrated successes in writing and receiving grants.  In addition to this, the physician’s outpatient office hours were reduced, he was restricted from accessing information on a hospital database that was necessary to conduct clinical research, was subjected to a peer review without notice, was removed from a leadership position, and refused to renew his staff privileges.  Following this series of events, the physician agreed to attend an advanced training course in order to regain his staff privileges.  After completing the course with positive reviews, the physician filed a charge of racial discrimination with the Equal Employment Opportunity Commission (“EEOC”).  The physician also expressed concern about the hospital’s urology department practices and requested an external review to assess potential patient care concerns.  These requests were ignored.  When the physician applied for re-credentialing, the hospital refused to approve his privileges.  The physician took an eight-month leave of absence at the hospital’s request and, when he returned to work, he was put under supervision.  The physician sued the hospital and the hospitalist, alleging discrete discrimination, hostile work environment, breach of contract, and retaliation claims.

The court held that the physician’s claims of discrete discrimination were subject to the 300-day statute of limitations.  Therefore, despite the fact that the alleged acts were ongoing and continuous over a period of several years, only those within the statutory period were actionable.  The physician’s claims of disparate treatment, though not included in his initial EEOC complaint, were not dismissed by the court because they were “reasonably related” to the claims set forth in the EEOC filing, regardless of whether or not the claims in that filing were exhausted.  Accordingly, the court denied the defendants’ motions to dismiss the claims that were “reasonably related” to the exhausted EEOC claims.

The court next denied the hospital’s motion to dismiss the charges of discrimination.  The hospital argued that most of the actions in the complaint related to the hospitalist rather than the hospital itself.  The court disagreed; the court found that the facts provided by the physician in his complaint demonstrated that the hospital “authorized or ratified the employment actions” taken against the physician by the hospitalist.  As such, the hospital’s motion to dismiss was denied.  Furthermore, the court held that the physician’s agreed-upon attendance at the advanced training course in return for staff privileges that were never renewed, as promised, demonstrated a likelihood of discriminatory conduct sufficient to justify denying the hospital’s motion to dismiss.  Looking at “all the circumstances” – including the physician’s comparatively low salary and derogatory remarks directed toward him – the court additionally determined this amounted to a sufficient amount of evidence to deny the hospital’s motion to dismiss with respect to the hostile work environment claim.

The court then dismissed the hospital’s motion to dismiss with respect to the state law retaliation claim.  The physician’s repeated concerns to hospital management regarding patient care and other questionable institutional practices, and the hospital’s subsequent severance of the physician’s privileges, indicated that the hospital’s conduct may have constituted retaliation in response to the physician’s whistleblowing.  Therefore, the court denied the hospital’s motion to dismiss.

The court dismissed the physician’s state law claim for breach of contract because the termination of staff privileges section of the agreement was not bound to abide by the hospital’s by-law policy.

The court also denied the hospitalist’s motion to dismiss the discrete discrimination allegations against him on the basis of qualified immunity as well as the retaliation claims.  The court found that the hospitalist failed to demonstrate, solely on the facts contained in the complaint, that he was entitled to such immunity.  Additionally, the court found that the coerced leave of absence, data access restrictions, and supervised privileges instituted by the hospitalist against the physician following the physician’s EEOC filing all raised sufficient evidence of potential retaliation.

Davis v. Johnson — Jan. 2017 (Summary)

MEDICAL STAFF APPOINTMENT – RETALIATION

Davis v. Johnson
No. 5:16-cv-262-DPM (E.D. Ark. Jan. 10, 2017)

The United States District Court for the Eastern District of Arkansas granted a defendant hospital’s motion to dismiss a claim brought by a physician alleging that the hospital retaliated against him for filing a previous lawsuit, in not considering a request for restoration of his privileges.

A hospital terminated a physician’s privileges following patient care concerns.  The physician sued the hospital in federal court, alleging racial discrimination.  While the physician sought restoration of his hospital privileges, he filed another lawsuit against the hospital in state court.  At the pre-application stage, the hospital considered the fact that the physician had filed the second lawsuit as evidence that the physician was “unwilling” to collaborate with the hospital.  Citing this and the physician’s lack of recent experience, the hospital rejected the physician’s application.  The physician sued the hospital claiming retaliation.

The court rejected the physician’s retaliation claims, citing recent precedent from the 8^th Circuit.  A retaliation claim, the court held, “requires a plausible allegation that the [hospital’s] reliance on the lawsuit [is] the ‘but-for’ cause” for rejecting an application for staff privileges.  Because retaliation was not the sole motivation behind its decision to reject the physician’s application for staff privileges, the decision not to consider the application for renewal of privileges could not serve as the basis for a retaliation claim under 42 U.S.C. §1981.  The court declined to rule on the physician’s state law retaliation claim or Freedom of Information Act claim.

Cales v. Baptist Healthcare Sys., Inc. — Jan. 2017 (Summary)

PRODUCT LIABILITY – OFF-LABEL USE

Cales v. Baptist Healthcare Sys., Inc.
No. 2015-CA-001103-MR (Ky. Ct. App. Jan. 13, 2017)

The Court of Appeals of Kentucky affirmed a lower court’s dismissal of a patient’s product liability claims against a health care system and manufacturer of a medical device, but reversed and remanded her medical negligence claims.

The case arose out of the physician’s off-label use of the Infuse Device.  The FDA approved the Infuse Device, and, as approved, the label provided: “these components must be used as a system.  The Infuse Bone Graft component must not be used without the LT-Cage Lumbar Tapered Fusion Device Component.” As a system, the device consisted of BMP, a BMP/Sponge and an LT-Cage.  During the patient’s surgery, the performing physician utilized a Capstone fusion cage with the BMP/Sponge rather than the LT-Cage.

Consequently, the patient brought two product liability claims, alleging that the health system only purchased a portion of the medical device, which was unreasonably dangerous and defective, the health care system’s hospital breached its duty to act as a reasonably prudent hospital, and, in reselling the medical device, the manufacturer should have known that the device would be used off label.  Furthermore, the patient asserted medical negligence claims alleging that the health care system either knew or should have known of the risks of using the device, and that she would not have consented to the off-label use of the device.

Addressing the product liability claims, the court agreed with the lower court’s dismissal of the claim because the claims were pre-empted by federal law.  Once the FDA has approved a medical device, the Medical Device Amendments of 1976 permit off-label uses and allow a health care provider to use the device in any manner deemed appropriate.  Thus, the FDA approval pre-empts any contention that the BMP/Sponge was defective or unreasonably dangerous.

Turning to the medical negligence claims, the court held that the health care system owed a duty to the patient.  After establishing that the performing physician was an agent of the hospital, the court reasoned that the off-label use of a medical device and the need to inform a patient are questions of fact to be decided by a jury.  Therefore, the court affirmed in regard to the dismissal of the product liability claims, and reversed and remanded to the lower court the medical negligence claims.

U.S. ex rel. Napoli v. Premier Hospitalists PL — Jan. 2017 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Napoli v. Premier Hospitalists PL
Case No. 8:14-cv-2952-T-33TBM (M.D. Fla. Jan. 12, 2017)

The United States District Court for the Middle District of Florida denied a physician, billing entity, and a hospitalist organization’s motion (collectively, the “organization”) to dismiss against the relators of a qui tam action.  The three relators, a nurse practitioner, former vice president of the hospitalist organization, and former medical administrator of the hospitalist group alleged violations of the False Claims Act by the organization.

The court held that the relators sufficiently pled with particularity improper billing practices by the organization which allegedly led to false claims being presented to and paid by the government.  While none of the relators were able to personally submit fraudulent bills, they each had access to documents and were in a position to observe the organization’s billing practices.  During the relators’ employment with the organization, the relators allegedly discovered improper billing practices and interviewed other employees for confirmation of their findings.

Additionally, the court found that the relators pled with sufficient particularity that a conspiracy existed between members of the organization.  The relators alleged that members of the organization were well aware through its communications with the billing entity that it was billing Medicare and Medicaid for patients never being seen, yet billed like they had.  Also, the relators alleged that they personally spoke with the owner and manager of the billing solutions and confirmed that they were aware of the policies.  As such, the court concluded that the relators sufficiently alleged that a member of the organization took an overt step of submitting a false claim to be paid, and which was a sufficient pleading with particularity of an FCA violation capable of withstanding the organization’s motion to dismiss.

Volk v. DeMeerleer — Dec. 2016 (Summary)

Petersen v. Supreme Court of Washington — Oct. 1983 (Summary)

Thurlow v. York Hosp. — Jan. 2017 (Summary)

FALSE CLAIMS ACT RETALIATION

Thurlow v. York Hosp.
Docket No. 2:16-cv-179-NT (D. Me. Jan. 10, 2017)

The United States District Court for the District of Maine denied a hospital’s motion to dismiss and granted a physician’s motion to amend his complaint alleging retaliation in violation of the federal False Claims Act (“FCA”), as well as two state law claims, against the hospital following the physician’s termination.

The employed physician voiced complaints about the work of a fellow surgeon whom the physician had suspected of performing unnecessary procedures, falsifying notes, and improper coding.  When the hospital informed the physician that it was merging two hospital-owned practice groups and that the physician would have to work alongside the surgeon about whom he had complained, the physician once again voiced complaints and refused to work with the surgeon.  Three months later, the hospital terminated the physician without cause and without notice.  Despite no longer being a hospital employee, the physician remained a member of the medical staff.  Almost eight months after the termination, the hospital’s President asked the physician to sign a “behavioral compact” if he wished to talk with the President about the hospital’s surgical services.

The physician sued the hospital, claiming that his termination from the hospital was retaliation for his complaining about the surgeon’s activities.  Although the physician initially failed to timely serve the complaint on the hospital, the court ultimately allowed the complaint to be filed.  The hospital then filed a motion to dismiss, after which the physician filed a motion to amend his complaint, which now included more detailed factual allegations and the new two state law claims.

The hospital first argued that the court should deny the physician’s motion to amend his complaint because of the physician’s lack of due diligence in filing his initial complaint.  The hospital claimed that the physician’s initial failure to timely file his complaint, as well as his filing a motion to amend after the hospital had already submitted its motion to dismiss, demonstrated a lack of due diligence.  The hospital also argued that the physician’s expanded factual allegations and new state law claims should have been included in his first complaint, and that these omissions also demonstrated a lack of due diligence that warrant the court to deny the physician’s motion to amend.  The court disagreed with all three of the hospital’s due diligence arguments, and found that the physician’s motion for leave to file an amended complaint was not an obvious attempt to “unnecessarily extend th[e] lawsuit.”

The hospital next argued that the court should deny the physician’s motion to amend his complaint because the physician’s FCA claim was “futile.”  The hospital claimed that there was not sufficient “temporal proximity” between the adverse employment action against the physician (i.e., his termination) and the physician’s statutorily protected activity (i.e., preventing the surgeon from defrauding the federal government).  The court did not agree with this temporal proximity argument, stating that a three-month gap between the protected activity and the adverse employment action supports a plausible inference of retaliation.  Furthermore, the court found that the hospital’s insistence that the physician sign the behavioral compact further supported a plausible inference that the hospital “harbored a retaliatory animus” toward the physician.

Accordingly, the court denied the hospital’s motion to dismiss and granted the physician’s motion to amend his complaint alleging FCA retaliation and state law violations.