Billeaudeau v. Opelousas Gen. Hosp. Auth. — Oct. 2016 (Summary)

NEGLIGENT CREDENTIALING

Billeaudeau v. Opelousas Gen. Hosp. Auth.
No. 2016-C-0846 (La. Oct. 19, 2016)

The Supreme Court of Louisiana affirmed the judgment of the Third Circuit Court of Appeals, holding that a claim for negligent credentialing against a hospital, involving care provided by an independent contractor emergency medicine physician, was not covered by the state medical malpractice act and, as such, was not subject to the statute’s damages cap.

Plaintiff, a woman with Down Syndrome, was taken to the emergency department of a hospital for treatment of a suspected stroke.  The ED physician declined to administer anti-stroke medication, despite the insistence of the patient’s family.  Though the patient was eventually transferred to another facility where she received the adequate treatment for her stroke, the delay resulted in irreversible brain damage.  In addition to basic negligence claims against the ED physician, the patient’s family also sued the hospital, alleging that the hospital negligently credentialed that ED physician when it failed to delve deeper into certain issues identified in her background, including information such as a requirement that ED physicians have at least a year of full-time practice in an emergency department, that was required by the medical staff bylaws.  The hospital argued that the negligent credentialing claim was indistinct from the patient’s medical malpractice claims, which were subject to the state medical malpractice act and associated limitation on damages.

After going through a detailed analysis of the language in the state medical malpractice act and finding no reference to negligent credentialing, the court ultimately applied a six-factor test to determine if the negligent credentialing allegations aligned more with general negligence law or malpractice law.  The test included such factors as whether negligent credentialing was “treatment-related” or caused by a dereliction of duty, whether expert medical evidence would be required to determine a breach of the standard of care, and whether the act in question involved an assessment of the patient’s condition. After applying all factors, the court held that claims involving negligent credentialing were “administrative, not medical, in nature.” Because only claims arising from medical malpractice are governed by the medical malpractice act, negligent credentialing is not a claim related to medical malpractice and therefore was not subject to the statute’s damages cap.

 

U.S. ex rel. Bingham v. HCA, Inc. — Oct. 2016 (Summary)

FRAUD & ABUSE/FALSE CLAIMS ACT

U.S. ex rel. Bingham v. HCA, Inc.
Case No. 13-23671-Civ-COOKE/TORRES (S.D. Fla. Oct. 14, 2016)

The United States District Court for the Southern District of Florida granted a health care services provider’s motion to dismiss an insider’s claims that a national health care services provider violated both the Stark Law and the Anti-Kickback Statute, thus creating liability under the False Claims Act.

A certified general real estate appraiser employed by a large, third-party property management firm that contracted with the health services provider, claimed to be an “insider” with knowledge of an alleged scheme involving a health services provider and a hospital owned by that provider. The insider claimed that after an interest in a hospital owned by the health services provider was sold, referring physicians stood to gain from the sale, as they had an equity interest in the hospital and because referring physicians received free parking benefits. The hospital provides inpatient and outpatient services to patients covered by federal and state sponsored health care programs. If the physicians were referring patients to a hospital in which they had a financial interest, they would be violating the Stark Law. If the physicians were receiving financial inducements to refer Medicare patients to the hospital, they would be violating the Anti-Kickback Statute. A violation of either statute forms a basis for liability under the False Claims Act.

As noted by the court, in order for the insider to state a valid claim under the False Claims Act, he must state with particularity the circumstances constituting fraud, and his knowledge of the circumstances of the fraud must be independently obtained. The court held that the insider’s claims failed because it heavily relied on information obtained through discovery to support the allegations against the health care services provider and, as noted by the court, information obtained through discovery is not independently obtained knowledge. Without the information obtained through discovery, the insider’s claim lacked the particularity necessary to state a valid claim of fraud. As a result, the court concluded that the insider was unable to state a claim under the False Claims Act.

George v. Christus Health Sw. La. — Oct. 2016 (Summary)

PEER REVIEW PRIVILEGE

George v. Christus Health Sw. La.
No. 16-412 (La. Ct. App. Oct. 12, 2016)

The Court of Appeal of Louisiana granted in part a neurosurgeon’s request for relief and set aside a protective order issued by the trial court shielding from discovery peer review information of other physicians at a hospital.

The neurosurgeon was suspended, and ultimately not reinstated from a leave of absence, following accusations that he was inebriated while in the operating room.  The neurosurgeon sued the hospital and others, asserting claims for breach of contract and unfair trade practices.  The neurosurgeon alleged that the hospital displayed malice and personal bias toward him.  To support this allegation, he sought “evidence from the hospital to support [his] position that other doctors subject to [the hospital’s] peer review process were found to lack competence and to be a threat to quality healthcare, but that those doctors were still granted hospital privileges despite those findings.”  The hospital filed for, and was granted, a protective order.  In granting the protective order, the trial court concluded that the Louisiana peer review statute protected the information sought by the neurosurgeon.  The neurosurgeon appealed the trial court’s decision, arguing that the peer review statute was unconstitutional and that the decision should be set aside.  The court of appeal found that the state peer review statute “[does] not provide a hospital with total immunity from discovery of anything that occurs within the internal committee operation of a medical facility.”  Since the trial court reached the opposite conclusion, the court of appeal granted the neurosurgeon’s request for relief in part and remanded to the trial court “to re-examine each of the individual discovery requests…to determine whether any of the information sought is protected by the privilege created by the [peer review statute].”  The court did not rule on the neurosurgeon’s claim that the peer review statute was unconstitutional but noted that if the trial court found that any of the sought after information was protected under the statute, the neurosurgeon could seek further relief.

Gutierrez v. Santa Rosa Memorial Hosp. — Oct. 2016 (Summary)

EMTALA

Gutierrez v. Santa Rosa Memorial Hosp.
No. 16-cv-02645-SI (N.D. Cal. Oct. 12, 2016)

The United States District Court for the Northern District of California granted, in part, a defendant hospital’s motion to dismiss, but allowed the plaintiff patient leave to amend her complaint, alleging that the hospital, among other things, violated the Emergency Medical Treatment and Active Labor Act (“EMTALA”) by failing to adequately screen and stabilize the patient’s condition before discharge.

The patient, a diabetic with end-stage renal disease, was treated in the hospital’s emergency department.  The patient alleged that despite indications from lab results that she might have a life-threatening disease, the hospital discharged her four hours later.  The patient collapsed shortly after discharge and was transferred to the ICU in a coma.  The patient (and other members of her family) sued the hospital and others, asserting claims for a violation of EMTALA and a violation of California’s Elder Abuse and Dependent Adult Civil Protection Act.  The hospital filed a motion to dismiss the patient’s complaint.  The court granted the motion, in part, and granted the patient leave to amend the complaint.  Specifically, the court dismissed the patient’s “failure to screen” claim under EMTALA because the complaint contained “no allegations that plaintiff was provided with a screening that was not comparable to that provided to other patients who exhibited similar symptoms.”  Nor did the complaint allege “that the screening provided…was ‘at such a minimal level that it properly cannot be said that the screening [was] appropriate.’”  The court also granted the hospital’s motion to dismiss the patient’s claim under California’s Elder Abuse and Dependent Adult Civil Protection Act because the complaint did not allege that the patient was a “dependent adult” as that term is defined by the statute.  On the other hand, the court denied the hospital’s motion to dismiss with respect to the patient’s “failure to stabilize” claim under EMTALA.  According to the court, the patient’s complaint supported this claim by alleging that the hospital ignored results of lab tests showing “the presence of life-threatening disease” and, subsequently, discharged her without stabilizing her.

Methodist Health Servs. Corp. v. OSF Healthcare Sys. — Sept. 2016 (Summary)

ANTITRUST

Methodist Health Servs. Corp. v. OSF Healthcare Sys.
No. 1:13-cv-01054-SLD-JEH (C.D. Ill. Sept. 30, 2016)

The United States District Court for the Central District of Illinois granted a hospital’s motion for summary judgment against federal and state law claims, brought by another, smaller hospital, relating to alleged illicit monopolization and antitrust violations.

Methodist Health Services Corporation (“Methodist”) sued St. Francis Medical Center (“St. Francis”) after St. Francis entered into exclusive contracts with the largest commercial insurers in the area.  Methodist argued that these exclusive arrangements unreasonably restrained trade and created an unlawful monopoly by diverting higher-reimbursing, commercially-insured patients to St. Francis facilities instead of Methodist facilities.  Methodist argued that St. Francis’ provision of certain specialized and essential services enabled it to use its market influence to “coerce commercial payers into excluding Methodist from their provider networks,” which inevitably created a “substantial foreclosure of competition.”  However, the district court held that a market foreclosure of slightly more than 50 percent constituted insufficient evidence upon which to predicate a claim of substantial foreclosure.

In its analysis, the court emphasized that although Methodist could not compete for some individuals insured by the largest insurer in the market, it was theoretically able to compete at other levels within the market, including employee benefit plans established by area employers.  Additional factors, such as the short duration of the exclusive contracts (one to two years) and Methodist’s alternative means by which it could reach the market of commercial patients, indicated that there was not foreclosure from the market of inpatient services rising to the level of a Sherman Act antitrust violation.  Accordingly, the court held that the exclusive contracts that St. Francis maintained did not “substantially lessen competition in the…market” in the coverage for either inpatient or outpatient services.

Markow v. Rosner — Oct. 2016 (Summary)

NEGLIGENCE/OSTENSIBLE AGENT

Markow v. Rosner
No. B260715, B262530 (Cal. Ct. App. Oct. 4, 2016)

The Court of Appeal for the Second District of California reversed a superior court’s ruling, holding that a patient was not entitled to damages from a hospital for the negligence of a physician.

The patient underwent a series of pain management treatments administered by the medical director of the pain center at the hospital.  After the pain management treatment, the patient experienced tremendous pain and began to develop neurological problems.  The patient’s condition deteriorated, and eventually left him quadriplegic.  A jury found the hospital was liable for the patient’s injuries because the court believed the physician was an ostensible agent of the hospital based on the fact that the patient found the physician on the hospital’s website, the physician was the medical director of a center at the hospital, and that when the patient chose the physician, he believed the physician was an employee of the hospital.

The appellate court disagreed, finding that the patient had substantial notice that the physician was not an employee of the hospital.  Before the patient underwent each pain management procedure, he signed conditions of admissions forms that contained an express provision informing the patient that his physician is not an agent of the hospital.  The patient also made payments for his care to the physician’s actual employer, not the hospital.  The court determined that the patient received actual notice that the physician was not an agent of the hospital, and, therefore, the hospital could not be held liable for the physician’s negligence.

Hernandez v. Avera Queen of Peace Hosp. — Sept. 2016 (Summary)

BREACH OF CONTRACT/DEFAMATION

Hernandez v. Avera Queen of Peace Hosp.
No. 27662 (S.D. Sept. 28, 2016)

The Supreme Court of South Dakota affirmed a circuit court’s decision to dismiss an employee physician’s claims against multiple persons associated with a hospital.

After providing the physician with incentives such as an office, support staff, and loan forgiveness, the physician claimed that when she arrived, her office was not prepared, she did not have adequate support staff, and she did not have sufficient equipment.  Once the physician was able to commence her practice, she experienced complications during her first three surgeries.  The physician claimed these complications were due to an improperly trained support staff and inadequate equipment.  The physician was assigned a proctor due to her complication rates.  The proctor advised that the physician be monitored closely if she was going to continue her practice, because he was concerned about her surgical techniques and how she used the equipment.

A month after beginning her practice, the physician became ill and had to take a medical leave of absence.  During her medical leave, the hospital terminated her employment due to the volume of patient complications and summarily suspended her privileges due to her inability to perform surgical procedures without supervision.  After terminating the physician, the hospital continued a peer review investigation of the physician’s cases with complications and its decision to suspend her privileges.  The investigation was ultimately terminated because the physician let her medical license lapse.  A physician must have a license to have privileges at the hospital.  Since the physician let her license lapse, she was ineligible to hold privileges, and the investigation was no longer necessary.  The hospital then reported the physician’s license forfeiture and privileges suspension to the National Practitioner Data Bank (“NPDB”).

The physician brought a claim against the hospital and multiple persons associated with the hospital for defamation, discrimination, wrongful termination, and wrongful suspension of privileges.  The circuit court dismissed all of these claims.  The physician believed the court erred when it dismissed her claims.  The physician first claimed defamation against the hospital because it reported her license forfeiture and privileges suspension to the NPDB.  For this claim of defamation to survive, the physician needed to prove that the hospital reported to the NPDB with knowledge that its report was false.  The hospital also has immunity from civil suit for the report, absent a showing that it was done with false information.  The physician did not show that the report was false, nor did she claim it was false, therefore her defamation claim against the hospital must be dismissed.  For the same reasons, the physician’s defamation claims against persons associated with the hospital were dismissed as well.

The physician then claimed discrimination against the hospital in violation of the Family Medical Leave Act (“FMLA”) and the ADA.  These discrimination claims were dismissed because the physician did not assert a claim under the FMLA since she took a medical leave of absence, not an FMLA leave.  The physician also did not present evidence that she was disabled or that the hospital perceived her as disabled under the ADA.

The physician lastly claimed wrongful termination and wrongful suspension of privileges against the hospital.  The physician claimed she was wrongfully terminated because the hospital failed to follow statutory procedure and procedure under the hospital’s bylaws.  She then claimed the hospital wrongfully suspended her privileges and wrongfully reported her suspension to the NPDB in violation of her rights because she was not notified or given an opportunity to be heard.  These claims were rightfully dismissed because the physician never brought this cause of action and she could not point to how this issue could be before the court on appeal.

Howerton v. Se. Emergency Physicians, Inc. — Sept. 2016 (Summary)

CONTRACT DISPUTE

Howerton v. Se. Emergency Physicians, Inc.
No. 2015–CA–000456–MR (Ky. Ct. App. Sept. 30, 2016)

The Court of Appeals of Kentucky affirmed a circuit court’s decision granting summary judgment in favor of a physician staffing company and a hospital.

A physician was contracted by a physician staffing company to work in a hospital’s emergency department.  While under contract, the physician clashed with the hospital administration over his responsibility to care for non-emergent patients who arrived at the emergency department.  The physician believed the emergency room is for emergencies only, and he would refer non-emergent patients to primary care physicians instead of treating them after an initial screening.

After the physician turned away a patient who came to the emergency department with a skin rash, the CEO of the hospital contacted the physician staffing company’s regional manager and made clear that she did not want the physician working at the hospital’s emergency facilities anymore.  The regional manager then called the physician and informed him that he would no longer be scheduled at the facility, but that he could be scheduled at another facility.  The physician was also offered compensation for the 120-day period he would have worked if he was given notice as specified by the contract.  The physician refused the regional manager’s offer for relocation, refused compensation, and was terminated based on the without-cause provision of his employment contract.

The physician did not accept that he was terminated without cause, and he sued the staffing company and the hospital for various contract and tort liabilities.  The circuit court rejected each of the physician’s claims and granted summary judgment for the company and the hospital.  The physician’s breach of contract claim against the staffing company could not survive because his employment contract expressly provided either party with the ability to terminate the agreement without cause, and nothing in the contract required written notice of termination.  The physician’s tortious interference with a contract claim against the hospital could not survive because he could not show that the hospital acted maliciously or engaged in wrongful conduct when it contacted his regional manager to inform him of its dissatisfaction with the physician’s performance and its desire to remove him from the facility.  The hospital did not wrongfully induce the company to terminate the physician, and the physician was offered other employment options.  The hospital’s motivation for requesting that the physician be removed was supported by a legitimate business interest, not solely to spite the physician.  Therefore, the hospital’s interference with the physician’s employment contract was proper.

Ferris v. Milton S. Hershey Med. Ctr. — Sept. 2016 (Summary)

PARENT REFUSES TREATMENT FOR KID/LAWSUIT ENSUES

Ferris v. Milton S. Hershey Med. Ctr.
No. 1:12-cv-0442 (M.D. Pa. Sept. 29, 2016)

The Middle District of Pennsylvania granted two physicians and a social worker’s motion for summary judgment against a former patient who obtained counsel through the Home School Legal Defense Association to file Fourth and Fourteenth Amendment claims – as well as a false imprisonment claim – against them.

After giving birth to a child with a number of health issues, the patient was transferred to the department of obstetrics where she refused to allow her child to receive vaccinations and other treatments to prevent further complications.  Subsequently, the physicians contacted Children and Youth Services and alerted the social worker to the patient refusing to allow treatment for her child.  The social worker was also unable to convince the patient to allow treatment for the child, so the social worker contacted the police department, which ultimately concluded that the child’s removal from the custody of the patient was necessary and had an emergency custody order issued.

With respect to the Fourth Amendment claim against the physicians, the court reasoned that the physicians acted reasonably in determining that emergency circumstances existed posing an immediate threat to the safety of the child.  The court found the patient’s refusal to allow her child to receive treatment and the fact that the patient had failed to retain a midwife to care for her following discharge were enough to show that the physicians acted reasonably in light of the surrounding circumstances.  Additionally, the court noted that even if a Fourth Amendment violation had occurred, based on the information available to the physicians, a reasonable official in the physician’s position would have concluded that the seizure of the patient’s child was supported by exigent circumstances.  Therefore, even if the court had found a Fourth Amendment violation, the physicians were entitled to qualified immunity and exemption from liability regarding the patient’s Fourth Amendment claims.

Turning to the patient’s Fourteenth Amendment claim against the physicians, the court rejected the patient’s argument that there was no emergency circumstance to justify deprivation of custody without parental consent, finding that the physicians were reasonable in concluding that the patient’s child was in imminent danger, and therefore emergency circumstances in fact existed to justify the patient’s deprivation of custody.

As to the patient’s claims against the social worker, the court first rejected the social worker’s contention that she qualified for absolute immunity because the actions that allegedly involved constitutional violations occurred prior to the emergency order for removal of the child being issued.  However, the court found that the patient’s Fourth Amendment claim against the social worker failed because the record before the court lacked any evidence of an actual seizure.  While the social worker informed the officer who confiscated the child of pertinent details, the court found that her involvement did not rise to a level that constituted an actual seizure.  Moreover, the court found that even if the Fourth Amendment violation had been established, the social worker was entitled to qualified immunity because she acted reasonably under the circumstances.

Having determined that the physicians’ actions were reasonable, the court concluded that the patient’s Fourteenth Amendment claim against the social worker failed because the social worker was entitled to consider the professional opinions of the medical staff when she formulated her own opinion about taking custody of the patient’s child.  The court found that the social worker was justified in her reliance on the professional opinions of the physicians and that her conclusion to remove the patient’s child was proper because emergency circumstances that posed an immediate threat to the safety of the child existed.  Lastly, the court rejected the patient’s false imprisonment claim, reasoning that the patient’s child being removed from her custody was necessary and the detention was not unlawful.  As a result, the court granted summary judgment in favor of the physicians and social worker on all claims against them.

Levitin v. Nw. Cmty. Hosp. — Sept. 2016 (Summary)

TITLE VII

Levitin v. Nw. Cmty. Hosp.
No. 13 C 5553 (N.D. Ill. Sept. 28, 2016)

The United States District Court for the Northern District of Illinois dismissed a lawsuit brought by a physician who claimed that she was subjected to a hostile work environment by the hospital.  The physician filed suit when her clinical privileges were terminated following four levels of internal review.

In her complaint, the physician alleged a violation of Title VII of the Civil Rights Act and various state law claims.  Focusing on the Title VII claim, the court sought to determine if the physician could be considered an “employee” under the law.  To determine whether an employment relationship existed, the court examined “the economic realities of the relationship and the degree of control that the employer exercises over the employee.”  Although other courts have determined that a physician who has been granted medical staff appointment and clinical privileges may claim to be an employee for the purposes of alleging discrimination under federal law, the court declined to recognize the existence of an employment relationship in this case.  Although the physician argued that the hospital exercised control over the facilities, equipment, and instruments that she used and dictated the scope of her duties and responsibilities for general surgeries and procedures, the court ruled that the physician’s claims did not “adduce [any actual] evidence to back up her allegations.”

The court found that although the physician was required to follow hospital guidelines, the physician’s “primary authority and fairly wide latitude to determine how best to treat her patients” indicated that she was not an employee of the hospital.  While the court noted that hospitals are required to exercise some measure of physician oversight in the heavily regulated health care market, such as requiring record-keeping, this type of compulsory supervision did not amount to control over the physician’s practice in this case.  In support of its determination, the court indicated that the physician did not receive employment benefits from the hospital (such as vacation days or health insurance) and did not have private office space.  The court also found that the hospital did not pay for her worker’s compensation, malpractice insurance, professional organization dues, licensing fees, or Social Security taxes.

Although the physician received some income from the Physician Hospital Organization, that was not a “sufficient” source of income.  There was no evidence that the hospital compensated her directly other than paying the physician on behalf of the PHO.  Thus, since the physician “largely controlled the means and manner of her delivery of patient services,” the court held that she was not an employee of the hospital and, therefore, could not recover under Title VII.  Accordingly, the court dismissed the physician’s Title VII claims.  The court also decided not to exercise jurisdiction over the physician’s state law claims and dismissed those claims as well.