Stafford v. Burns — Nov. 2016 (Summary)

EMTALA/MALPRACTICE CLAIM

Stafford v. Burns
No. 1 CA-CV 15-0476 (Ariz. Ct. App. Nov. 29, 2016)

The Court of Appeal of Arizona affirmed that a heightened burden of proof applied to a patient’s claims for medical malpractice and wrongful death, since services were provided in compliance with the Emergency Medical Treatment and Active Labor Act (“EMTALA”).

The patient arrived at a hospital’s emergency department after ingesting an unknown quantity of methadone. The patient was tested, evaluated, and monitored for possible methadone overdose by a physician. A second physician took over the patient’s care until he was discharged 12 hours later. The following day, the patient was found dead. The patient’s parents brought an action against the second physician, alleging that she negligently caused the patient’s death by discharging him prematurely. The parents’ burden of proof was rooted in a state statute that provides protections for emergency medical providers.

The parents denied the applicability of EMTALA because their complaint did not include an EMTALA claim and that their son was not diagnosed with an emergency medical condition.  However, the court found EMTALA applicable in this case because its mandates apply to all patients presented in emergency departments seeking treatment for what may be an emergency medical condition. The court noted that the fact that the patient was not ultimately diagnosed with an emergency medical condition is not dispositive. Nor was the fact that a different physician had already determined the patient did not have an emergency medical condition. The court found that if the patient was misdiagnosed or discharged prematurely, as the patient’s parents contend, those actions occurred in the course of providing EMTALA-mandated services. Therefore, the heightened burden of proof applied.

Parkview Adventist Med. Ctr. v. United States — Nov. 2016 (Summary)

A HOSPITAL IN BANKRUTPCY

Parkview Adventist Med. Ctr. v. United States
No. 16-1731 (1st Cir. Nov. 29, 2016)

The United States Court of Appeals for the First Circuit affirmed a district court’s ruling that a termination of a provider agreement between the Centers for Medicare & Medicaid Services (“CMS”) and a hospital in bankruptcy did not constitute impermissible discrimination against a debtor in bankruptcy under federal law.

The hospital had a provider agreement with CMS to receive reimbursements for services provided under Medicare Parts A and B.  The hospital informed CMS that it would be discontinuing its participation in Medicare Part A because it was closing its inpatient services and filing chapter 11 bankruptcy.  CMS sent a response confirming receipt of the hospital’s letter and advising the hospital that it would terminate the provider agreement and payments on the day the hospital ceased to provide inpatient services.  In the interim, however, the hospital obtained a conditional license from the Maine Department of Health and Human Services and continued to provide outpatient services.  The hospital informed CMS that it would continue to provide outpatient services, that it no longer wished to terminate the provider agreement, and that CMS’s rescission of the provider agreement would “adversely affect [the hospital’s] bankruptcy transition plan.”

The court held that the hospital had no property interest in participating in Medicare and that, even if it did, CMS could still terminate the provider agreement because it was exercising its “police and regulatory power,” which is an exception to the general prohibition against filing an action against a debtor in bankruptcy.  To qualify for the exception, a government entity must demonstrate that its action is intended to “protect the public safety and welfare” and is not for any “pecuniary purpose[.]”  The court ruled that CMS had a strong public policy interest in ensuring that public monies were spent on appropriately qualified hospitals to protect patients.  The hospital’s request for exemption from CMS conditions of participation was akin to an attempt to “evad[e] CMS’s efforts to secure compliance with the Medicare statute – exactly the kind of action the police and regulatory power exception is meant to prevent.”  The court further held that CMS’s termination of the provider agreement was in direct response to the hospital’s voluntary decision to withdraw from the Medicare program, not in reference to its bankruptcy proceedings.  Therefore, the termination also did not violate the nondiscrimination provision under the federal bankruptcy statute.  As a result, the court denied the hospital’s request to enforce a stay on CMS’s termination proceedings.

Brandner v. Providence Health & Servs. – Wash. — Nov. 2016 (Summary)

DUE PROCESS/AUTOMATIC TERMINATION/HCQIA

Brandner v. Providence Health & Servs. – Wash.
Supreme Court No. S-15933 (Alaska Nov. 25, 2016)

The Supreme Court of Alaska held that a physician whose privileges had been terminated pursuant to an “automatic termination” provision in a hospital policy was entitled to a pre-termination notice and a hearing.

The physician had come under scrutiny during 2010, when the Alaska State Medical Board received a report that he had threatened an employee in the governor’s office. The Medical Board ordered the physician to submit to psychiatric and medical evaluations in order to assess his ability to practice medicine. These evaluations confirmed that the physician was fit to practice and the investigation was resolved.

Then, in early 2011, the physician allegedly made a series of strange, “disjointed” statements at an executive committee meeting, raising concerns at the hospital over his ability to practice. When the executive committee ordered him to undergo psychiatric evaluation, he explained that he had recently had one and had been found fit to practice. The hospital reviewed the records of this evaluation and discovered the involvement of the Medical Board.

Under hospital policy, the physician was required to report any condition the Medical Board placed on his ability to practice. Failure to do so resulted in an “automatic termination” of privileges.  Accordingly, after determining that the Board’s order to submit to a psychiatric evaluation placed a condition on his ability to practice medicine, the hospital’s medical staff executive committee voted to terminate the physician’s hospital privileges because of his failure to report. The hospital’s board affirmed the termination prior to any hearing taking place. The physician was ultimately given a hearing after the termination took effect, but he was unsuccessful in his appeal. He then sued.

Reversing the course of a lower superior court, the supreme court determined that, contrary to the hospital’s contentions, the physician did not waive his due process rights by the mere fact that he agreed to abide by all hospital policies, including the policy providing for automatic termination.  Furthermore, the hospital failed to present any evidence that its actions were in response to an immediate threat to patient health or safety.  As such, the court held that the physician was entitled to a pre-termination notice and a hearing.

The court also held that the hospital did not qualify for immunity under the Health Care Quality Improvement Act (“HCQIA”) because, even if the physician had waived his right to notice and a pre-termination hearing by agreeing to be bound by the hospital bylaws, “waivers [alone] cannot release a hospital from HCQIA requirements to achieve immunity [under the statute].” The court, therefore, remanded the case to the superior court.

U.S. ex rel. Doghramji v. Cmty. Health Sys., Inc. — Nov. 2016 (Summary)

ATTORNEY’S FEES IN FALSE CLAIMS ACT SETTLEMENT

U.S. ex rel. Doghramji v. Cmty. Health Sys., Inc.
No. 15-6280 (6th Cir. Nov. 22, 2016)

The United States Court of Appeals for the Sixth Circuit reversed and remanded the district court’s order concluding that a settlement agreement in a qui tam lawsuit unambiguously restricted a health system’s challenges to entitlement of attorneys’ fees.

A health system, the government, and several qui tam relators reached a settlement agreement after claims for fraudulent Medicare billing were brought against the health system. The relators agreed to dismiss their claims in exchange for a specified amount to be paid by the health system. Following the settlement agreement, the health system appealed on the issue of whether it failed to preserve its right to challenge the entitlement of the relators to attorneys’ fees.

The health system argued that a term in the agreement preserved its right to make first-to-file and public disclosure challenges or object to the relators’ claims for attorneys’ fees. The relators argued that the provision on which the health system relied limited its scope of protection to that specific section, and first-to-file and public disclosure challenges were located in another section. The district court agreed with the relators, reasoning that it is unlikely that the first-to-file provision favoring the health system would have been left out of the agreement unintentionally and, given that the government intervened in all of the relators’ claims, their conduct would entitle relators to attorneys’ fees.

The health system’s appeal hinged on whether both its interpretation of a specific term in the settlement agreement and the relators’ interpretation were reasonable. If both interpretations of the contract term were reasonable, then the provision would be considered ambiguous, requiring the introduction of extrinsic evidence to ascertain the parties’ understanding of the contract at the time of its inception. The health system interpreted the contract term as limiting its ability to challenge first-to-file and public disclosures on the basis of attorneys’ fees. The relators interpreted the contract term as limiting the health system’s ability to challenge within the scope of the cited section. The relators further argued that the term did not explicitly state that the health system could challenge claims for attorneys’ fees; therefore, the health system had to and failed to explicitly reserve those rights. Lastly, the relators argued that they have a reasonable expectation of attorneys’ fees granted by statute which requires the payment of reasonable attorneys’ fees whenever the government proceeds with a qui tam action.

The court determined that both the health system and the relators advanced reasonable interpretations of the settlement agreement, rendering it ambiguous. Because the settlement agreement is ambiguous, extrinsic evidence may be used to ascertain the parties’ original understanding of its terms. The court, therefore, reversed and remanded the district court’s order for further inquiry.

Bastidas v. Good Samaritan Hosp. LP — Nov. 2016 (Summary)

CIVIL RIGHTS

Bastidas v. Good Samaritan Hosp. LP
Case No. 13-cv-04388-SI (N.D. Cal. Nov. 21, 2016)

The United States District Court for the Northern District of California denied a hospital’s motion for summary judgment of a retaliation claim made by a surgeon, while granting a motion for summary judgment as to individual defendants.

This litigation arose following a complicated surgery at a hospital that resulted in the death of a patient and the suspension of the surgeon’s privileges.  After peer review proceedings, the Board of Trustees issued a final report on the matter, recommending that the surgeon be proctored for a number of surgeries prior to regaining his surgical privileges.

The surgeon was elected to the Chair of Surgery while his proctorship was pending.  The Medical Executive Committee (“MEC”) at the hospital, under the staff bylaws, disallowed his chair appointment on the basis that a majority of MEC members voted against him.  The MEC also removed the surgeon from the Cancer Care Committee.

The court found that the surgeon was engaged in “protected activity” when he filed a discrimination lawsuit and was, shortly afterwards, subjected to an “adverse employment action” by virtue of the defendant’s delay in implementing the proctoring program.  The delay prevented the surgeon from “perform[ing] certain types of surgeries at [the hospital]” which formed a large portion of his practice.  The court also held that a jury could reasonably find that the defendant’s failure to timely update the National Practitioner Data Bank also could have affected the surgeon’s employment privileges in an adverse way.

Although the defendants produced evidence that there were legitimate, nondiscriminatory reasons for the “adverse employment action,” the MEC’s failure to ratify the Chair of Surgery election results and the removal of the surgeon from the Cancer Care Committee raised an issue of fact as to whether those nondiscriminatory reasons were actually a pretext.  Ultimately, the close relationship between the “protected activity” and the “adverse employment action” was a sufficient basis on which to deny the defendant’s motion for summary judgment.

U.S. ex rel. Escobar v. Universal Health Servs., Inc. — Nov. 2016 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Escobar v. Universal Health Servs., Inc.
No. 14-1423 (1st Cir. Nov. 22, 2016)

The United States Circuit Court of Appeals for the First Circuit ruled, on remand from the United States Supreme Court, that relators in a False Claims Act (“FCA”) case against a mental health treatment facility had alleged sufficient facts to state a claim that the defendant had committed an FCA violation.

A young girl sought mental health treatment at the defendant’s facility in 2009.  She was prescribed medication that gave her seizures and eventually led to her death.  The defendant had, contrary to certifications of compliance with state and federal law, employed unlicensed and unsupervised personnel in the treatment of the decedent and others at the facility.  The unlicensed counselors had, in violation of Massachusetts’ Medicaid program, falsely represented their lack of appropriate credentials by using fraudulently-obtained National Practitioner Identification (“NPI”) numbers for use in submitting claims for reimbursement to the Massachusetts’ Medicaid program.

In prior proceedings, the Supreme Court had ruled that the implied false certification theory was a valid theory of liability under the FCA.  The Supreme Court had remanded the case to the Court of Appeals to determine whether the relators plead sufficient facts to meet the new materiality standard articulated by the Supreme Court.

The Court of Appeals ruled that the plaintiff had alleged sufficient facts to satisfy the materiality standard.  Responding to defendant’s argument that the state Medicaid agency paying the claims was aware of the allegations but paid the claims anyway, the court noted that there was no evidence in the plaintiff’s complaint to suggest that Medicaid agency had “actual knowledge” of the alleged violations.  The court reversed the district court’s grant of a motion to dismiss for the defendant and remanded the case for further proceedings.

Durbin v. Workers’ Comp. Appeal Bd. — Nov. 2016 (Summary)

HIPAA

Durbin v. Workers’ Comp. Appeal Bd.
No. 289 C.D. 2016 (Pa. Commw. Ct. Nov. 21, 2016)

The Commonwealth Court of Pennsylvania affirmed a workers’ compensation judge’s order granting a hospital employee’s claim for workers’ compensation benefits.

A hospital employee left work and was unable to return due to alleged psychological trauma caused by her coworkers’ use of the medical records database, in violation of HIPAA, to discover information about the employee’s husband’s medical condition.  After leaving work, the employee filed a claim for workers’ compensation benefits.  The employer failed to file a timely answer, leading the workers’ compensation judge to deem that the employer had admitted the employee’s claims.  The employer then appealed, questioning whether the employee’s disability was an ongoing issue that required a continuing grant of workers’ compensation benefits.

The employee offered testimony from her psychiatrist who stated that the employee was afraid to return to work, suffered from nightmares, and was diagnosed with post-traumatic stress disorder that resulted from “a major devastating emotional reaction and severe adjustment disorder with anxiety and depression.” The employee also sought therapy after discussing her concerns about her coworkers’ knowledge of her husband’s condition.  During her therapy sessions, she complained of panic attacks, difficulty sleeping, and crying.  The employer’s medical expert testified to the contrary, believing the employee showed no negative psychological signs, and even went on a vacation.  The employer’s medical expert determined that if the employee suffered a psychological disability, she has since recovered.

The workers’ compensation judge found the employer’s medical expert testimony more persuasive and issued an order granting the employee workers’ compensation benefits from her time of injury to her time of recovery, resulting in a termination of the employee’s continued workers’ compensation benefits.

Hatzell v. Health and Hosp. Corp. of Marion Cty. — Nov. 2016 (Summary)

EMTALA

Hatzell v. Health and Hosp. Corp. of Marion Cty.
No. 1:15-cv-00964-LJM-TAB (S.D. Ind. Nov. 18, 2016)

The United States District Court for the Southern District of Indiana granted a hospital’s motion for summary judgment against a patient’s claim brought under the Emergency Medical Treatment and Active Labor Act (“EMTALA”).

An adult, mentally handicapped patient was taken to a hospital’s emergency room with complaints of lethargy, constipation, stomach pain, and an inability to urinate.  The patient was examined, an x-ray of her abdomen was taken to assess constipation, and the resident physician ordered a urinalysis.  The patient was unable to urinate for the urinalysis, and her x-rays revealed that she was moderately constipated.  The resident physician told the patient’s mother that they could not find anything physically wrong with the patient, and he prescribed a laxative.  Though the resident physician knew a urinalysis would help determine whether a patient had a urinary tract infection or impaired kidney function, the urinalysis was not performed.

The next day, the patient was taken to the same hospital’s emergency room for a second time because she fell down the stairs and was unresponsive.  Upon arrival, the patient underwent several screening procedures to assess her injuries from the fall, including CT scans and x-rays.  Upon completion of the screenings, the resident physician available told the patient’s mother that the only thing they found wrong with the patient was a broken nose.  The patient’s mother told the physician that the patient still had not urinated and that her abdomen was noticeably distended, but the physician reiterated that they did not find anything physically wrong with the patient beyond her broken nose.  The physician did not order any testing for a urinary tract infection, nor did the physician ask for the patient’s comprehensive medical history as is customary when a patient with limited ability to communicate due to mental disability arrives at the emergency room.

Five days later, the patient still had not urinated and she became nonresponsive.  Her mother took her to a different hospital’s emergency department.  Upon arrival, lab tests and a urinalysis were immediately ordered and performed.  The patient’s health records indicated that she had previously suffered from urinary disorders, and her lab results were extremely and dangerously abnormal.  The patient was then diagnosed with acute renal failure and a urinary tract infection.  The patient suffered permanent physical and mental disabilities.

The patient’s estate filed an action against the first hospital, alleging that it violated EMTALA by failing to properly screen the patient for a urinary disorder.  The district court disagreed with the estate, and found their claim to be in line with a medical malpractice action, not an EMTALA violation.  On both occasions, the patient was screened and assessed in the emergency room based on the symptoms she presented.  EMTALA does not require a correct diagnosis, it only requires a proper screening.  A proper screening is based on whether the patient received the same type of screening that other patients presenting with the same symptoms would have received.  There is no evidence that the patient was treated differently than another patient in a similar circumstance.  Though the resident physicians could be alleged to have been negligent in not performing a urinalysis on both occasions, such negligence would not constitute a violation of EMTALA.

Morales v. Palomar Health — Nov. 2016 (Summary)

EMTALA

Morales v. Palomar Health
Case No.:  3:14-cv-0164-GPC-MDD (S.D. Cal. Nov. 17, 2016)

The United States District Court for the Southern District of California granted a children’s hospital’s partial motion for summary judgment against an infant’s representative who brought a claim of inadequate screening under the Emergency Medical Treatment and Active Labor Act (“EMTALA”).  The infant visited the children’s hospital for urgent care on four different occasions, which resulted in the physicians concluding that the one-year-old had either an early flu or an upper respiratory tract infection during the first visit, acute febrile illness during the second visit, and a number of differential diagnoses during the third visit.  After returning to the hospital two days later for a fourth visit and receiving a diagnosis of meningitis, the infant’s representative brought suit alleging that the hospital’s course of treatment was insufficient within the meaning of EMTALA.

The district court found that the infant’s representative failed his burden of rebutting the evidence offered by the hospital and also failed to produce any evidence that would support his contention that the hospital failed to provide an appropriate medical screening examination.  While the infant’s representative did offer expert testimony, the representative’s experts spoke exclusively in terms of prudent care and the standard of care, but the Ninth Circuit has already established that EMTALA does not establish a national standard of care and is not a federal medical malpractice cause of action.  Therefore, while pointing to the shortcomings of the hospital’s screening process may establish the hospital’s conduct fell below an operative standard of care, the court nevertheless found that this line of reasoning was not sufficient without additional evidence to demonstrate an EMTALA violation.  Accordingly, the district court granted the children’s hospital’s motion for partial summary judgment as to the representative’s EMTALA claim.

Langston v. Milton S. Hershey Med. Ctr. — Nov. 2016 (Summary)

CIVIL RIGHTS

Langston v. Milton S. Hershey Med. Ctr.
Case No. 1:15-CV-2027 (M.D. Pa. Nov. 16, 2016)

The United States District Court for the Middle District of Pennsylvania denied a former patient’s motion for reconsideration following dismissal of her civil rights claim against a hospital.  The former patient attempted to add allegations to her complaint to clearly state a relationship between the state University of Pennsylvania and Hershey Medical Center, but the court found the allegations insufficient to show that “state action” existed as needed to state a section 1983 claim.  The court concluded that because the second complaint did not sufficiently allege state action by the hospital or the treating physician, its dismissal was proper, and accordingly denied the former patient’s motion for reconsideration.