Valfer v. Evanston Nw. Healthcare — May 2016 (Summary)

PEER REVIEW IMMUNITY

Valfer v. Evanston Nw. Healthcare
No. 119220 (Ill. May 19, 2016)

The Supreme Court of Illinois affirmed the Appellate Court of Illinois’ dismissal of a breach of contract claim brought by a physician against a hospital, holding that the hospital was immune from liability pursuant to the state peer review statute in the absence of willful and wanton misconduct. After a medical staff peer review committee at the hospital determined that at least 50% of the surgeon’s surgical cases lacked necessary indications for intervention, the surgeon’s operating privileges were suspended and, ultimately, the hospital denied the surgeon’s reappointment, citing patient safety concerns. Following a three-day medical staff hearing and an appellate review process, the hospital board adopted the recommendation to deny, after which the surgeon sued.  Finding that the hospital did not violate the bylaws, the lower courts determined that the hospital had immunity conferred by the state’s peer review statute.  The lower courts also determined that the case did not fall within the “willful and wanton misconduct” exception to peer review immunity, finding that the plain text of the statute required a showing of physical harm by an affected practitioner. The physician was unable to show physical harm when he alleged that the hospital did not follow its bylaws relating to suspension of privileges. The court reasoned that if the exception to immunity included any and all types of intentional harm, including harm to one’s reputation or economic well-being, it would negate any immunity provided by the peer review statute. Also, the court clarified that this case should not be interpreted as condoning sham peer review, explaining that hospitals do not have absolute immunity from all legal challenges to all decisions made by peer review committees. As examples, it offered the possibility of injunctive relief for decisions about compliance with hospital bylaws and tort actions for physical harm brought by willful and wanton misconduct, neither of which the court found in this case.

Doctor v. LifePoint Hosps., Inc. — May 2016 (Summary)

REVOCATION OF PRIVILEGES — TRO

Doctor v. LifePoint Hosps., Inc.
No. 2015 CA 0979 (La. Ct. App. May 12, 2016)

After being reinstated from a summary suspension, an OB/GYN’s privileges were revoked when new concerns arose which violated the probationary conditions that were put on his practice.

After receiving a hearing and appeal, the OB/GYN filed for a temporary restraining order (“TRO”) enjoining the hospital from revoking his clinical privileges and making an adverse report to a third party or agency, which was initially granted and later reversed by the trial court.

The hospital then suspended the OB/GYN’s clinical privileges and medical staff membership and the OB/GYN appealed. The court of appeals denied the hospital’s motion to dismiss the OB/GYN’s appeal as moot, holding that the reporting to third parties and agencies was not a “one-time event” and the suspension was for “no less than one year,” presenting a justiciable controversy.

The court of appeals went on to affirm the judgment of the trial court, finding that the trial court did not error when it refused to allow the physician to present evidence from three other physicians, noting that two of those physicians’ testimony was in the Hearing Committee Report provided to the trial court judge and the other physician was not affiliated with the hospital in any way.  The court of appeals also agreed with the trial court that evidence that other physicians violated the same rule was irrelevant and inadmissible. The court of appeals rejected the physician’s argument that he should have been granted a fair hearing when the conditions for reinstatement were imposed, noting he agreed to the conditions. Additionally, the OB/GYN was not able to show the trial court he would have likely succeeded on the merits, as the MEC decision was “made after a reasonable effort to obtain the facts and after affording [the physician] adequate notice and hearing procedures.”

Winger v. Meade Dist. Hosp. — May 2016 (Summary)

Employment Termination – Liberty Interest vs. Property Interest

Winger v. Meade Dist. Hosp.
No. 15-3075 (10th Cir. May 12, 2016)

The Tenth Circuit of the United States Court of Appeals found that a physician who’s employment had been terminated by a hospital did have a valid liberty interest claim, but not a property interest claim. The physician sued the hospital, claiming he was fired without due process and that the hospital infringed upon his liberty interest in his professional reputation by reporting his termination to the state board.

According to the physician’s contract, he was hired for an initial term of one year and could be terminated without cause on 60 days’ notice or immediately for “good cause.” Not long after he started, the hospital’s risk management committee conducted an investigation after receiving complaints about the physician. Based upon the findings of the investigation, the hospital revoked the physician’s temporary privileges for failing to practice within the expected standard of care. The hospital’s bylaws provided that temporary privileges could be terminated at any time without a right to appeal. The physician’s contract was then terminated “with cause” for failing to meet the “standards of care required of physicians in the community.” Reports were filed with the state board, which reported the termination to the National Practitioner Data Bank.

While a district court granted summary judgment to the hospital, the circuit court reversed the lower court’s findings, finding that under Kansas law, the physician had a property interest in his continued employment because his contract provided that he could only be terminated immediately if there was “good cause” and that it was a question for the jury as to whether he had received adequate due process. However, the circuit court did affirm the district court’s finding of summary judgment for the hospital with regard to the physician’s liberty interest claim, holding that the hospital was required to report the termination of the physician’s clinical privileges by statute.

U.S. ex rel. Cieszynski v. LifeWatch Servs., Inc. — May 2016

False Claims Act – Qui Tam Action

U.S. ex rel. Cieszynski v. LifeWatch Servs., Inc.
Case No. 13 CV 4052 (N.D. Ill. May 13, 2016)

A district court granted a physician’s motion to dismiss a counterclaim brought by his former employer – a medical device company – stating the physician had breached his confidentiality agreement and the company’s privacy policy when he disclosed documents to his attorney and the government for the purposes of filing a qui tam suit. The physician had disclosed a spreadsheet that contained the names of individuals on both private and government insurance who used the company’s medical device. The district court held that this document alone did not expose the physician to liability for the confidentiality agreement he signed, stating public policy strongly favored supporting the efforts of relators to report fraud. Similarly, the district court held the company failed to state a claim with regard to the physician’s alleged breach of the privacy policy as well. The company did not plead sufficient facts to show the privacy policy was part of the physician’s employment agreement. The district court also held the physician’s disclosure was sufficiently narrow to avoid liability for the privacy policy as well. Additionally, the district court noted that HIPAA provides a safe harbor for employees who disclose protected health information to a government agency or attorney, “if such employee has a good faith belief that the HIPAA-covered employer has engaged in unlawful conduct.”

Dark v. Houston Methodist San Jacinto Hosp. — May 2016 (Summary)

EMPLOYMENT DISCRIMINATION – NURSE

Dark v. Houston Methodist San Jacinto Hosp.
Civil Action No. H-14-3540 (S.D. Tex. May 12, 2016)

The District Court for the Southern District of Texas granted a hospital’s motion for summary judgment with regard to a former nurse’s ADA, Title VII, and §1981 claims of disability and racial discrimination. The former nurse was an RN II at the hospital. After receiving a flu shot, the nurse was diagnosed with Unspecified Connective Tissue Disease, an autoimmune disease, and she applied for short-term disability in January 2014. The hospital informed the nurse in May 2014 that her short-term disability would expire in July 2014 unless she returned to work or received an extension as an accommodation. The nurse provided documentation that she could not return to work and requested an extension, but both requests were denied. The hospital informed the nurse that her leave would be exhausted on October 2, 2014, and she would be terminated from her position unless she returned to work. After her termination, the nurse filed a lawsuit.

The district court held the nurse failed to present evidence that the open and available positions she indicated would be appropriate would not involve patient contact. The former nurse’s claim that the hospital did not engage in an interactive process to accommodate her disability were also rejected. The hospital’s human resources director communicated with the nurse regarding her limitations, and noted that telecommuting would not be an option because all nurse positions at the hospital required patient contact. The district court also held the nurse failed to cite evidence that her request for an extended leave of absence constituted a reasonable accommodation, holding the nurse never provided the hospital an estimate of when she could resume her job duties and that the hospital was not required to wait indefinitely for the nurse’s medical condition to be resolved.

In reviewing the nurse’s racial discrimination claim, the district court held the nurse had failed to establish a prima facie case. The nurse did not dispute she was no longer qualified for her previous position or any available position currently at the hospital. Additionally, the district court held the nurse failed to provide sufficient evidence of disparate treatment because those employees who were treated “more favorably” than her were not similarly situated: one nurse had suffered a broken wrist and the other was pregnant, both temporary conditions. The district court held the nurse had failed to show the hospital’s decision to terminate her employment, namely that no reasonable accommodation would have enabled the nurse to perform the essential functions of her job as an RN II, was merely a pretext for racial discrimination.

U.S. House of Representatives v. Burwell — May 2016 (Summary)

AFFORDABLE CARE ACT

U.S. House of Representatives v. Burwell
No. 14-1967 (RMC) (D.D.C. May 12, 2016)

The United States District Court for the District of Columbia entered summary judgment in favor of the United States House of Representatives in a suit brought against the Secretary of the United States Department of Health and Human Services (“HHS”) and the United States Treasury.  The court enjoined the use of unappropriated monies to reimburse cost-sharing subsidies offered by insurers under Section 1402 of the Affordable Care Act.  Section 1402 of the Affordable Care Act requires insurers offering qualified health plans through the Affordable Care Act exchanges “to reduce deductibles, coinsurance, copayments, and similar charges for eligible insured individuals enrolled in their plans, with the government providing reimbursement to insurers for these cost-sharing reductions.”

The court distinguished Section 1401 of the Affordable Care Act, which provides tax credits to subsidize health insurance for certain individuals, noting that these tax credits are permanently funded by law.  However, the Section 1402 cost-sharing subsidies are annually funded.  Thus, paying out reimbursements for these subsidies by HHS and the Treasury without an annual appropriation from Congress violates the Constitution.  The court concluded that “Congress authorized reduced cost sharing but did not appropriate monies for it, in the FY 2014 budget or since.  Congress is the only source for such an appropriation, and no public money can be spent without one.”  The court stayed its injunction pending any appeal by the parties.

Sunderland v. Bethesda Health, Inc. — May 2016 (Summary)

ADA – TITLE III

Sunderland v. Bethesda Health, Inc.
No. 13-80685-CIV-HURLEY (S.D. Fla. May 11, 2016)

The United States District Court for the Southern District of Florida granted a hospital’s motion for summary judgment in a suit seeking, among other things, injunctive relief brought by former patients who were hearing disabled.  The patients claimed that the hospital “failed to provide interpreting services adequate to ensure effective communication with them during each of their respective hospital stays, and that this lack of effective communication violated their rights under Title III of the [ADA]…and section 504 of the Rehabilitation Act of 1973….”

The patients argued that the hospital excluded them from, or denied them the benefits of, “the hospital’s services or programs by failing to provide live, on-site [American Sign Language] interpreter services after plaintiffs expressed dissatisfaction with the efficacy of [the hospital’s Video Remote Interpreting Computer on Wheels] and a preference for live, on-site interpreters.”  According to the court, there was sufficient evidence presented to create a genuine issue of fact that the hospital’s “default reliance on VRI as an auxiliary aid resulted in patient comprehension failures – known to hospital staff – and corresponding impediments to each patient’s ability to meaningfully understand and participate in his or her own course of medical treatment.”  Nonetheless, the court concluded that the patients did not have standing to seek injunctive relief because they could not “show the existence of a ‘real and immediate’ threat of future hospitalization at a [hospital] facility.”

FTC v. Penn State Hershey Med. Ctr. — May 2016 (Summary)

ANTITRUST

FTC v. Penn State Hershey Med. Ctr.
No.:  1:15-cv-2362 (M.D. Pa. May 9, 2016)

The United States District Court for the Middle District of Pennsylvania denied a motion for a preliminary injunction filed by the Federal Trade Commission (“FTC”) seeking to enjoin Penn State Hershey Medical Center (“Hershey”) from taking any steps to consummate its proposed merger with Pinnacle Health System (“Pinnacle”).

The court first held that the FTC had failed to set forth a relevant geographic market and, thus, failed to establish a prima facie case under the Clayton Act.  According to the court, the FTC’s four county “Harrisburg Area” relevant geographic market “is unrealistically narrow and does not assume the commercial realities faced by consumers in the region.”  In coming to this conclusion, the court relied upon, among other things, evidence indicating that over half of Hershey’s revenue is generated from patients outside the FTC’s proposed geographic market.  The court also “weighed the equities” in the case and concluded that “[a]fter a thorough consideration of the equities in play, we find the majority of these factors [involved in the merger] weigh in the public interest.”  In support of this conclusion, the court noted that the merger would alleviate some of Hershey’s capacity constraints and assist the hospitals in responding to the movement toward risk-based contracting with payors.  The court ended its opinion by observing as follows:  “Our determination reflects the healthcare world as it is, and not as the FTC wishes it to be.  We find it no small irony that the same federal government under which the FTC operates has created a climate that virtually compels institutions to seek alliances such as the Hospitals intend here.  Like the corner store, the community medical center is a charming but increasingly antiquated concept.  It is better for the people they treat that such hospitals unite and survive rather than remain divided and wither.”  One day after this opinion was issued, on May 10, 2016, the FTC filed a motion for injunction pending appeal of the district court’s decision.

Conn v. Rebustillo — May 2016 (Summary)

NEW JERSEY PATIENT SAFETY ACT PRIVILEGE

Conn v. Rebustillo
No. A-1421-15T3 (N.J. Super. Ct. App. Div. May 4, 2016)

The Superior Court of New Jersey, Appellate Division reversed a trial court order compelling a hospital to disclose the underlying facts of a root cause analysis submitted to the New Jersey Department of Health and Senior Services (the “Department”) pursuant to the New Jersey Patient Safety Act.  The issue arose in a medical malpractice action brought by the wife of a patient who died after falling from his hospital bed.  During discovery, the plaintiff filed a motion to compel the discovery of a root cause analysis prepared by the hospital and submitted to the Department.  The hospital filed for a protective order.  The trial court granted the motion to compel in part, requiring the hospital to provide the “underlying facts” of the root cause analysis.  On appeal, the appellate court reversed this order, finding that the privilege under the Patient Safety Act is “absolute” and “not subject to review to determine whether the health care facility complied with the ‘process requirements’ set forth in the [Patient Safety Act].”

Thornhill v. Jackson Parish Hosp. — May 2016 (Summary)

EMTALA

Thornhill v. Jackson Parish Hosp.
No. 15-01867 (W.D. La. May 4, 2016)

The United States District Court for the Western District of Louisiana granted summary judgment to a hospital in an Emergency Medical Treatment and Active Labor Act (“EMTALA”) suit brought by the administrator of the estate of a deceased patient.  The patient was admitted to the hospital after presenting to the emergency department with shortness of breath and decreased level of consciousness.  His family requested that the hospital transfer the patient to another hospital.  During the transfer, the patient died.  The administrator of his estate sued, arguing that the hospital violated EMTALA by not providing an appropriate transfer.  The court rejected this argument and granted summary judgment to the hospital.  In doing so, the court accepted the Centers for Medicare & Medicaid Services’ interpretation of EMTALA found in the EMTALA regulations.  Those regulations state that a hospital’s obligation to stabilize a patient ends when the hospital, in good faith, admits a patient in order to stabilize a patient’s emergency medical condition.  According to the court, because the patient was admitted for inpatient treatment, “and because there is no indication [the hospital] took this action in bad faith, the hospital satisfied its duty to Plaintiffs under EMTALA.”