Rowell v. Phoebe Putney Memorial Hosp., Inc. — Sept. 2016 (Summary)

Rowell v. Phoebe Putney Memorial Hosp., Inc. — Sept. 2016 (Summary)

EXCLUSIVE AGREEMENT

Rowell v. Phoebe Putney Memorial Hosp., Inc.
Case No. A16A1304 (Ga. Ct. App. Sept. 14, 2016)

fulltextThe Court of Appeals of Georgia affirmed the trial court’s decision to grant a hospital and the hospital’s Vice President of Medical Affairs summary judgment, dismissing an anesthesiologist’s claims for, among other things, tortious interference with her existing contractual relationship and violation of the hospital bylaws.

An anesthesiologist had an oral agreement to work on nights and weekends for the anesthesia group that was the exclusive provider of anesthesia services at the hospital.  After the anesthesiologist’s employer met with the Vice President of Medical Affairs (“VPMA”) due to concerns about the anesthesiologist’s patient care, the employer informed the anesthesiologist that the VPMA instructed him to stop the anesthesiologist from coming to work, and if she did come back to work, her privileges would be suspended. Following that conversation, the employer called the anesthesiologist back, told her she wasn’t fired, and that she needed to fight the hospital’s instruction. The anesthesiologist chose not to return to work and picked up her last paycheck.  The anesthesia group then terminated her malpractice insurance policy and as a result she no longer qualified for privileges under the Medical Staff Bylaws.

The anesthesiologist initiated an action against the hospital and the VPMA which included claims for tortious interference with her existing contractual relationship and violation of the hospital’s bylaws. In order for the anesthesiologist to succeed in her claim of tortious interference with her existing contractual relationship, she had to prove the VPMA acted with malice by suspending her privileges.

The VPMA met with the anesthesiologist’s employer to tell him that the hospital planned to investigate her patient care, and that the initiation of the investigation would result in a suspension of her privileges. The VPMA’s communications with the employer were made in good faith, as he was acting in the interest of patient safety; and though he had the right to suspend the anesthesiologist’s privileges, he ultimately did not do so. The anesthesiologist never returned to work; therefore, there was no need to initiate an investigation and suspend her privileges. The anesthesiologist failed to prove the VPMA acted with malice since there was no act; therefore, her tortious inference claim cannot stand.

The anesthesiologist also claimed the VPMA failed to follow the hospital’s bylaws because he did not consult with other members of the Executive Committee concerning her suspension before contacting her employer. When the anesthesiologist made the unilateral decision not to return to work, which resulted in the anesthesia group cancelling her malpractice insurance, a suspension of her privileges was no longer necessary because she was no longer qualified to have privileges at the hospital. Because the hospital never imposed a summary suspension of her privileges, the anesthesiologist was not entitled to the hearing rights that were set forth in the medical staff bylaws.  Therefore, the anesthesiologist did not have a claim for a violation of the bylaws based on a suspension of her privileges.

In re: Evanston Nw. Healthcare Corp. Antitrust Litig. — Sept. 2016 (Summary)

In re: Evanston Nw. Healthcare Corp. Antitrust Litig. — Sept. 2016 (Summary)

ANTITRUST – MERGER

In re:  Evanston Nw. Healthcare Corp. Antitrust Litig.
No. 07 C 04446 (N.D. Ill. Sept. 9, 2016)

fulltextThe District Court for the Northern District of Illinois denied in part and granted in part a hospital’s motion for summary judgment on whether a Class action, alleging violations of Federal Antitrust laws, was barred by the applicable statute of limitations.

Defendant hospital merged with another hospital on January 1, 2000.  The hospital informed its customers and affiliated managed care organizations (“MCOs”) of the proposed merger by letter in December 1999.  The hospital, however, did not publicly disclose any intention to raise prices for its services and, in fact, had agreed to honor the same pre-merger rates, terms, and conditions after the merger.  Following the merger, the hospital began negotiating for higher prices in its existing contracts with MCOs.  The first renegotiated contract was signed February 23, 2000.  The Federal Trade Commission (“FTC”) filed an administrative complaint four years later, on February 10, 2004, alleging federal antitrust violations based on the anticompetitive effect of the merger and the hospital’s subsequent decision to substantially raise prices for health care services.  The FTC concluded that the hospital’s merger and price increases violated Section 7 of the Clayton Act.  A Class action lawsuit, filed after the FTC case concluded in August 2007, followed.  The Class alleged violations both of Section 2 and Section 7 of the Sherman Antitrust Act, which prohibit monopolization and anticompetitive mergers or acquisitions, respectively.  Defendant hospital contended that the antitrust violation claims asserted by the Class action lawsuit were barred by the applicable statute of limitations (four years).  The Class cited the Continuing Violations Doctrine and Discovery Rule as alternative theories for delaying or resetting the running of the limitations period.

As to the applicability of the statute of limitations, the court held that, under Section 5 of the Clayton Act, the FTC’s lawsuit tolled, or temporarily froze, the running of the limitations period while the government’s case was ongoing.  Defendant hospital argued that even given this interruption, the Class action would still be barred because the merger took place on January 1, 2000 and the FTC action commenced on February 10, 2004.  The court held that the Class action claims were not barred under either the Second Circuit’s “accrual-on-purchase” approach or under the Discovery Rule because, under both theories, the date of injury or discovery did not occur until sometime on or after February 23, 2000.  Under the “accrual-on-purchase” theory, the Class suffered injury only when they were forced to pay the “supracompetitive prices” demanded by the defendant hospital following the merger.  The statute of limitations, therefore, would begin to run once the Class members had begun to make payments.  Alternatively, the court held that the Discovery Rule, which sets the beginning of the limitations period on the date the injury was discovered, not when it actually occurred, also would apply to both the Section 2 and Section 7 claims.  Thus, the Class’s claim did not ripen until the Class members realized that the merger had caused the injury. Under the Discovery Rule, therefore, the Class would not be barred from filing the claim.  Because the lawsuit would not be barred under either theory, the court ruled that the applicability of the Class’s Continuing Violations Doctrine was valid, with respect to both the Class’s Section 2 and Section 7 claims, but moot.

On the merits of the case, the court held that the Class’s Section 7 claim was valid under the “hold-and-use” doctrine.  Under this theory, the defendant hospital’s merger, while not itself anticompetitive, opened the door for the defendant hospital to renegotiate MCO contracts at much higher prices, thereby causing injury to the Class post-merger.  Because the court found that defendant hospital had no intention to raise prices before it consummated the merger, the injury to the Class could not have occurred on the date of the merger, but only after the MCO contracts were signed and higher prices were charged to members of the Class.

However, the court granted the defendant hospital’s motion for summary judgment, in part, holding that the statute of limitations barred any claims arising before the FTC filed its February 10, 2004 complaint.

Telesford v. Md. Provo-I Med. Servs., P.C. — Sept. 2016 (Summary)

Telesford v. Md. Provo-I Med. Servs., P.C. — Sept. 2016 (Summary)

DISCRIMINATION

Telesford v. Md. Provo-I Med. Servs., P.C.
Civil No. 13-cv-01359 (APM-DAR) (D.D.C. Sept. 2, 2016)

fulltextThe United States District Court for the District of Columbia granted in part and denied in part a hospital’s motion for summary judgment, permitting several African-American physician assistants’ racial discrimination claims to move forward, while dismissing their retaliation claims.

In this case, a white male replaced an African-American as medical director of the emergency department.  Shortly thereafter, a white male physician assistant was promoted to Lead PA, a position that was not advertised to the other physician assistants. The medical director claimed the promoted physician assistant was recommended along with two African-American physician assistants, but was chosen because he was the most qualified. When the medical director learned the other physician assistants were displeased with the promotion, he then changed his story and claimed the promoted physician assistant was actually hired by a corporation that the hospital contracted with to provide doctors and physician assistants. As a result, seven African-American physician assistants filed a discrimination claim with the Equal Employment Opportunity Commission (“EEOC”).

Prior to the PAs filing their discrimination claims, the medical director had announced a new, poorly received, compensation structure for the physician assistants. When the physician assistants expressed dissatisfaction with the new compensation structure, the medical director pointed to the at-will termination clause of their employment contracts and threatened to consider their refusal to agree to the new compensation structure as their resignation. The compensation structure was ultimately made optional and the physician assistants who did not agree with the structure were reimbursed, with interest, any payments they did not receive, but would have received under the previous compensation structure.

Despite this, the African-American physician assistants claimed that they were being retaliated against, through the imposition of a new compensation structure and threat of termination, because they filed discrimination claims. The court concluded that the physician assistants’ retaliation claim could not survive because the threat of termination is not enough to qualify as retaliation, and any adverse effects resulting from their forced commitment to the new compensation structure were remedied.

The court refused to dismiss the PAs’ racial discrimination claims, however.  Particularly notable was an African-American nursing director’s testimony concerning the promotion, which called the medical director’s motivations into question. She testified that the medical director first acknowledged that the other physician assistants were unhappy with the promotion, but claimed it was not his fault because he did not hire the promoted physician assistant. But she testified that, on a separate occasion, the medical director was prepared to suggest that she recommended and supported the white physician assistant for the position, when in fact she had not.

The court held that because the medical director’s motivations for hiring the white Lead PA could be called into question, a question of fact remained over whether his explanations for why the Lead PA was hired were pretext.

Casares v. Mercy St. Vincent Med. Ctr. — Aug. 2016 (Summary)

Casares v. Mercy St. Vincent Med. Ctr. — Aug. 2016 (Summary)

AGENT OF ESTOPPEL

Casares v. Mercy St. Vincent Med. Ctr.
No. L-15-1313 (Ohio Ct. App. Aug. 26, 2016)

fulltextThe Court of Appeals of Ohio for the Sixth District reversed a lower court’s grant of summary judgment in favor of a patient who brought a medical malpractice lawsuit against a health center, physician, and hospital.

After fracturing his cervical spine in a swimming accident, the patient was transported to a nearby health center. Upon arrival, the patient was placed in the care of one of the health care center’s physicians, but was eventually airlifted to another hospital. Ultimately, the patient suffered permanent injury to his spinal cord and quadriplegia. The patient filed suit against both facilities, alleging that the physician at the first facility negligently failed to take any cervical spine fracture or spinal cord injury precautions, and failed to diagnose and treat his cervical fracture. Additionally, the patient maintained that the flight crew was negligent in failing to secure his cervical spine.  The patient claimed the physician, an independent contractor, acted as an ostensible agent of the health center, thus the health center was responsible under the doctrine of respondeat superior.

The court disagreed with the lower court’s finding that the patient failed to meet his burden of showing that he “looked to” the health center for care, as opposed to the physician, because his lack of consciousness had precluded him from doing so. The court held that a hospital may be held liable under the doctrine of agency by estoppel for the negligent acts of its independent contractors where the patient is unconscious and without notice of the independence of the physician at the time of paramedic transport. Therefore, the court reversed the lower court’s grant of the health center’s motion for summary judgment and remanded the case for further proceedings.

Young v. UC Health — Aug. 2016 (Summary)

Young v. UC Health — Aug. 2016 (Summary)

STATUTE OF LIMITATIONS

Young v. UC Health
Nos. C-150562, C-150566 (Ohio Ct. App. Aug. 26, 2016)

fulltextThe Court of Appeals for Ohio for the First District reversed a lower court’s ruling that the statute of repose, which bars medical claims more than four years after the alleged malpractice, was illegal.  The case had been brought by a patient who had surgery performed by a spine surgeon who had since fled the country.  As a result, two hospitals were also named as defendants.

The court held that the lower court erred by concluding that the claims asserted by the patient were not medical claims. The court reasoned that because the claims arose out of the medical diagnosis, care, or treatment of the patient, the allegations against the hospital constituted medical claims. Additionally, the court found that the lower court erred in holding that the statute of repose was unconstitutional. The court noted that the Ohio Supreme Court has found that the statute of repose is constitutional, and the lower court had no authority to find otherwise. Therefore, the court found that the medical claims against the hospital were barred by the statute of repose and granted the hospital’s motion to dismiss.

U.S. ex rel. Hockenberry v. OhioHealth Corp. — Aug. 2016 (Summary)

U.S. ex rel. Hockenberry v. OhioHealth Corp. — Aug. 2016 (Summary)

FCA

U.S. ex rel. Hockenberry v. OhioHealth Corp.
Case No.: 2:15-CV-666 (S.D. Ohio Aug. 25, 2016)

fulltextThe United States District Court for the Southern District of Ohio dismissed a False Claims Act (“FCA”) suit filed against a health system by a physician.  The physician alleged that he personally witnessed physician-employees of the health system falsely enter notes in patient charges, which constituted a fraudulent billing scheme. However, the physician claimed that because of the Health Insurance Portability and Accountability Act (“HIPAA”), he could not provide patient names, dates of treatment, or content of treatment.

The court reasoned that the doctor failed to plead his FCA claim with particularity because he failed to identify any of the physicians involved in the alleged fraudulent activities. The court noted that his contention of not being able to offer any details was insufficient because he could have referred to the physicians and patients involved in the alleged fraud by their initials or requested that the court enter a HIPAA qualified protective order to avoid any violations.

Yarbrough v. Nw. Memorial Hosp. — Aug. 2016 (Summary)

Yarbrough v. Nw. Memorial Hosp. — Aug. 2016 (Summary)

APPARENT AGENCY

Yarbrough v. Nw. Memorial Hosp.
No.1-14-1585 (Ill. App. Ct. Aug. 19, 2016)

fulltextIn answering a certified question from a lower court, the Appellate Court of Illinois for the First District, Fifth Division held that a hospital can be held vicariously liable under the doctrine of apparent agency for the acts of the employees of an unrelated, independent clinic that is not a party to the present litigation.

This interlocutory appeal arose in the context of a malpractice case that was based on a premature birth of a baby girl.  The infant’s mother had received prenatal care at a federally funded clinic that was not affiliated with the defendant hospital, but at which she had been informed that she would deliver her baby and receive certain aspects of her pregnancy care, such as ultrasounds and other diagnostic testing at defendant hospital.  The mother experienced complications prior to the delivery and ultimately she delivered the infant at only 26 weeks’ gestation, with the infant experiencing numerous complications.

She and the infant’s father sued a number of defendants for various malpractice-based claims; however, the claim at issue in this appeal was the allegation that despite the fact that the hospital was not affiliated with the federally funded clinic, the hospital should nonetheless be held liable for the allegedly negligent acts by certain healthcare providers who provided the mother’s prenatal care at the clinic under the theory of apparent authority. The defendant hospital argued that the theory of apparent authority could not possibly apply here as the allegedly negligent conduct did not occur at the hospital, but at an unrelated and independent clinic.

The court disagreed, determining that the infant’s parents had sufficiently pled the elements of an apparent authority claim, noting a number of factors, including that the defendant hospital promotes itself as a “community oriented hospital that collaborates with neighborhood centers,” including the clinic where the mother received her prenatal care, the hospital publicized its relationship with that clinic on its website, the hospital promoted the fact that “100%” of the prenatal patients at the clinic delivered at the defendant hospital, and that per an affiliation agreement between the hospital and the clinic, the hospital was designated as the primary site for any acute care services that clinic patients required and also called for a hospital representative to sit on the clinic board.

Laster v. Henry Ford Health Sys. — Aug. 2016 (Summary)

Laster v. Henry Ford Health Sys. — Aug. 2016 (Summary)

APPARENT AGENCY

Laster v. Henry Ford Health Sys.
Docket No. 324739 (Mich. Ct. App. Aug. 23, 2016)

fulltextThe Court of Appeals of Michigan reversed a lower court’s denial of a request for summary judgment in favor of a health system in a malpractice lawsuit filed by a patient who was attempting to hold the health system liable for the acts of an independent contractor physician on the theory of vicarious liability.

The patient had come to the emergency room complaining of sharp abdominal pain, nausea, vomiting, and a history of Crohn’s disease.  Following a CT scan, the emergency department contacted the on-call general surgeon, believing the patient had appendicitis.  The surgeon required the patient to sign a consent form prior to performing an appendectomy, which stated, among other things, that she acknowledged that the surgeon was not an employee of the hospital.  Following the procedure, the patient continued to experience complications.  Ultimately, after two additional surgical procedures, it was determined the patient was suffering from a bowel perforation, secondary to her Crohn’s disease.  The patient alleged that the surgeon was negligent in evaluating her condition and performing surgery because he failed to diagnose and treat the perforation of her bowel, and further alleged that the health system was vicariously liable for the doctor’s malpractice, claiming that the on-call policy of the hospital, under which the surgeon came to be involved in her care, was evidence of sufficient control over the surgeon to establish liability on behalf of the health system under the theory of apparent agency.

The court disagreed, concluding that the health system had very little control over the surgeon, noting that he was free to treat patients how he saw fit, he billed his patients directly, and that he was part of an entirely separate group practice with its own staff and employees. Additionally, the hospital never compensated the doctor for his services, and he was free to obtain privileges at other hospitals. Accordingly, the court reasoned that because the patient’s claim was based on the doctor exercising professional judgment, over which the hospital had no control, the court held that the doctor was not an agent of the hospital. Consequently, the court reversed the lower court’s decision to deny the health system’s motion for summary disposition and remanded back to the lower court with instructions to grant the summary disposition in favor of the health system.

Scott v. Memorial Health Care Sys., Inc. — Aug. 2016 (Summary)

Scott v. Memorial Health Care Sys., Inc. — Aug. 2016 (Summary)

EMTALA

Scott v. Memorial Health Care Sys., Inc.
No. 15-6173 (6th Cir. Aug. 22, 2016)

fulltextThe United States Court of Appeals for the Sixth Circuit affirmed a lower court’s grant of summary judgment on an Emergency Medical Treatment and Active Labor Act (“EMTALA”) claim in favor of a hospital against an executrix representing herself and her deceased husband.

After arriving at the hospital’s emergency room, medical staff noted that the decedent was slurring his speech and exhibiting a facial droop. After running several diagnostic tests, the decedent was diagnosed with Bell’s palsy, a medical condition that is not related to a stroke. However, less than two hours later, the decedent experienced additional changes in his mental status which led to a finding of an occluded artery, and a transfer was initiated to another hospital for more advanced treatment.  After being released from the second hospital, the decedent died eight months later after suffering a second stroke.

The executrix alleged that the hospital violated EMTALA by providing inappropriate screening when her husband arrived at the emergency room suffering stroke-like symptoms and failing to offer treatment to stabilize his condition.  She further alleged that the hospital failed to provide the proper written certification for the transfer and failed to forward the decedent’s medical records in a proper and organized fashion.

The court, however, held that the executrix’s failure to provide expert medical testimony showing that the harm that the decedent suffered was not the result of the stroke he had, but was the result of the hospital’s failure to provide an appropriate screening, the hospital’s failure to stabilize him properly, or the hospital’s deficiencies in the transfer process “dooms” her EMTALA claims. The court concluded that the executrix failed to establish that the subsequent decline of the decedent’s condition was not attributable to the earlier stroke or its natural progression, but rather to the later medical steps that the hospital’s staff did or did not take. As a result, the court affirmed the lower court’s grant of summary judgment.

Moore v. Grady Memorial Hosp. Corp. — Aug. 2016 (Summary)

Moore v. Grady Memorial Hosp. Corp. — Aug. 2016 (Summary)

RACIAL DISCRIMINATION

Moore v. Grady Memorial Hosp. Corp.
No. 14-14719 (11th Cir. Aug. 19, 2016)

fulltextThe United States Court of Appeals for the Eleventh Circuit affirmed in part and reversed in part a motion to dismiss granted to a hospital by a lower court in a lawsuit filed by a surgeon alleging, among other things, racial discrimination in connection with the summary suspension of his privileges at the hospital.

The surgeon, who is of African American descent, was employed by a medical school which entered into an affiliation agreement with the defendant hospital. Shortly after he began performing surgeries at the hospital, a dispute occurred about whether procedures that he was performing were bariatric procedures, which were not authorized because the hospital did not have a program in place to support bariatric procedures.  While that dispute was ongoing, the surgeon complained to the director of the operating room that surgeons associated with another medical school that had an affiliation agreement with the hospital were being given greater access to operating rooms than those affiliated with his employer medical school which disparity, he claimed, was based on the fact that the majority of the surgeons affiliated with his medical school were African American. Shortly thereafter, the surgeon received a letter informing him that his clinical privileges were suspended due to his continued performance of unauthorized bariatric procedures.  After the medical executive committee determined to continue his suspension, the surgeon sued alleging racial discrimination and retaliation.

The lower court dismissed the claims, finding that the surgeon did not demonstrate the existence of a contractual relationship that had been impaired by the allegedly discriminatory acts – the summary suspension of his privileges, the diversion of patients to white physicians, and failing to provide operating rooms to African American physicians.  On appeal, the primary issue was whether such a contractual relationship existed.  The surgeon claimed that the acts impaired a third-party contract – his employment contract with the medical school – because as part of that contract, he had to maintain clinical privileges at the hospital.  The court agreed, finding that the surgeon pled sufficient factual allegations to support the discrimination claims and reversed the lower court’s dismissal of the doctor’s retaliation claim with directions to re-examine.