Moore v. Warr Acres Nursing Ctr., LLC — Mar. 2016 (Summary)

EMPLOYMENT

Moore v. Warr Acres Nursing Ctr., LLC
No. 113098 (Okla. Mar. 8, 2016)

The Supreme Court of Oklahoma reversed a grant of summary judgment in favor of a nursing center, holding that Oklahoma public policy prohibited the termination of an employee who missed several days of work because he was infected with influenza.  The nurse, who had been subject to frequent disciplinary complaints (including disregarding and failing to follow a supervisor’s instructions, spreading rumors, failing to complete tasks, and rebellious behavior), was sent home by the director of nursing after he vomited at work.  He followed the nursing center’s handbook by reporting his illness and obtaining a note from his physician that he stay home from work for three days.  When the nurse returned to work, he found he had been terminated.

A majority of the Supreme Court of Oklahoma held that, even though the nurse was an at-will employee, summary judgment was inappropriate because Oklahoma health codes and federal regulation articulated a public policy against spreading communicable diseases in the workplace.  The court pointed out that the employee’s history appears to show a pattern of constantly moving from one job to the next.  “These facts may reflect that the termination was neither pretextual, post hoc rationalization, nor a violation of public policy.  Nevertheless, that issue is for the jury to decide.”

Estate of Doyle v. Covenant Med. Ctr., Inc. — Mar. 2016 (Summary)

MALPRACTICE CLAIM/RETAINED SPONGE AND PEER REVIEW PRIVILEGE

Estate of Doyle v. Covenant Med. Ctr., Inc.
Docket No. 324337 (Mich. Ct. App. Mar. 3, 2016)

Full Opinion

Concurring-in-part and Dissenting-in-part Opinion

The Court of Appeals of Michigan reversed in part and affirmed in part a trial court’s ruling that a patient’s estate was time-barred from bringing a claim for medical malpractice.  This litigation arose from cardiac bypass surgery that was performed in 2003.  Unknown to the patient, a surgical sponge was left inside the surgical site and lodged against his heart.  For close to eight years, the patient suffered, without diagnosis, from unexplained shortness of breath, fatigue, sweating and pain.  Finally, when the patient underwent a sternotomy, the missing sponge, which was surrounded by “green foul fluid,” was discovered.  The patient filed a malpractice action, eight years after the initial surgery, against the surgeon, the group that employed the surgeon, and the hospital (collectively, the “surgeon”).

In response to the complaint, the surgeon asserted that the patient’s claims were time-barred because the claims were not filed within the six-year statute of repose.  The surgeon also alleged that the patient failed to sufficiently plead that he had acted fraudulently by concealing the existence of the sponge.

The trial court dismissed the complaint, finding that “a discrepancy in the [sponge] count does not equate to knowledge of a retained sponge.”  However, on appeal, the court found that failing to disclose that there was a missing sponge deprived the patient of an opportunity for early treatment and deprived the patient of facts underlying a claim for malpractice.  The appellate court found that the surgeon owed the patient a fiduciary duty to disclose the fact that there was a missing sponge and the intentional failure to do so constituted fraudulent concealment.  Thus, the court concluded that the time frame the patient had to file the malpractice action should be extended.

The appellate court affirmed the trial court’s ruling that an incident improvement report was privileged under the state peer review statute and was thus not discoverable.  The appellate court also affirmed the trial court’s decision that a letter sent to the patient by the hospital’s director of risk management, after the sponge was discovered, acknowledging that the hospital “would assume all costs associated with the incident,” was inadmissible because it was an offer of compromise.

U.S. ex rel. Sheldon v. Kettering Health Network — Mar. 2016 (Summary)

FALSE CLAIMS ACT AND HIPAA

U.S. ex rel. Sheldon v. Kettering Health Network
No. 15-3075 (6th Cir. Mar. 7, 2016)

The United States Court of Appeals for the Sixth Circuit denied a Relator’s motion to amend her complaint and granted a health network’s motion to dismiss.  The court held that the Relator lacked personal knowledge of False Claims Act (“FCA”) violations, and the complaint failed to sufficiently allege a false claim for payment.

Underlying this litigation was a disclosure by the health network that its employees (Relator’s ex-spouse and others) had impermissibly accessed the Relator’s protected health information (“PHI”).  In its disclosure, the health network informed the Relator that the unauthorized access of her PHI violated its internal policy, as well as the law, and that the health network would be reporting the breach to the Department of Health and Human Services.

In her complaint against the health network, the Relator alleged that her ex-spouse, a director at the health network, and his subordinate accessed her PHI in furtherance of the extramarital affair they were having.  She further alleged that the health network had falsely certified its compliance with certain provisions of the HITECH Act, and received meaningful-use incentive payments as a result.  The Relator claimed that the individual breaches constituted violations of the Act and/or that the health network failed to implement security policies and procedures in violation of the Act.  The Relator also claimed that the health network failed to regularly run reports, which help monitor inappropriate access to PHI and that this failure constituted a breach of its duties under the Act.

Shortly after filing the complaint in federal court, the Relator filed a complaint in state court in which she alleged various torts arising from the same breach of her electronic health records.  The state court claims were dismissed because “HIPAA does not allow private causes of action.”

The federal district court dismissed the complaint, holding that the Relator failed to allege a specific false claim and failed to plausibly plead that the health network did not meet the HITECH Act’s standards.  On appeal, the Sixth Circuit Court of Appeals upheld the dismissal of the complaint, finding that the Relator failed to allege a specific false claim, failed to adequately plead a false claim for payment, and lacked personal knowledge of the FCA violation.

U.S. ex rel. Willette v. Univ. of Mass., Worcester — Mar. 2016 (Summary)

DISCOVERY

U.S. ex rel. Willette v. Univ. of Mass., Worcester
Civil Action No. 4:13-CV-40066-TSH (D. Mass. Mar. 3, 2016)

The United States District Court for the District of Massachusetts held that a university and the state of Massachusetts had to submit to limited discovery for the purpose of determining whether a relator in a False Claims Act suit was entitled to any recovery.  The False Claims Act suit was brought against the university and a former employee who was deceased.  The relator alleged that the former employee misappropriated more than $3 million during his employment in the Estate Recovery Unit.  The university repaid the commonwealth and the relator filed a motion for a relator’s share.

The court concluded that limited discovery would be necessary to determine whether the relator was entitled to such a share.  There is an alternative remedy provision that preserves the relator’s right to a share of the proceeds when the government seeks an alternative remedy rather than intervening in the relator’s qui tam suit.  The court granted two months’ time to conduct limited discovery regarding the circumstances under which the university repaid the commonwealth.  The university and the commonwealth moved for protective orders to bar discovery.  The court denied the protective orders, noting that neither party is entitled to sovereign immunity or protection from discovery in the instant case.

Haines v. Cherian — Feb. 2016 (Summary)

PEER REVIEW PRIVILEGE & MCARE

Haines v. Cherian
Civil No. 1:15-cv-00513 (M.D. Pa. Feb. 29, 2016)

A medical negligence action before the United States District Court for the Middle District of Pennsylvania was brought against a physician and others employed by a medical center.  In the suit, a pregnant woman alleged that she was misdiagnosed with a pulmonary embolus when she was a patient at the medical center.  In fact, she just had the flu.  As a result of the misdiagnosis, the woman was improperly treated with a blood thinner that caused internal hemorrhaging and severe brain damage to her gestating twins.  During discovery, the patient requested incident reports, investigative notes, memoranda, correspondence, and adverse event letters.  A dispute arose over the production of these documents.

The medical center argued that the requested documents are protected from discovery by the Pennsylvania Peer Review Protection Act (“PRPA”) and the Pennsylvania Medical Care Availability and Reduction of Error Act (“MCARE”).  The court noted that MCARE protection applies only if the documents were created solely for the purpose of compliance with the MCARE Act’s serious events reporting requirements, if the documents arise out of matters reviewed by the patient safety committee and if the documents are not otherwise available from original sources.  The court further noted that if the investigation of the incident was not commenced at the request of or by the Patient Safety Committee, the confidentiality protections would not apply.  Similarly, PRPA protection would apply only to records used or produced during the peer review process that were not available from original sources.

The court held that confidential e-mails and other information which was subject to the Quality Care Review Committee’s responsibilities were protected from discovery.  However, other documents which “were not solely subject to the purpose of MCARE Act or PRPA compliance” were not protected.  The court did not require the production of documents related to an article published by a resident because the request was overly broad.  The court did order the production of all documents made, received and reviewed by an involved physician relating to a CT scan because the defense did not present any valid statutory protection for these relevant documents.

Essex Ins. Co. v. Galilee Med. Ctr. S.C. — Mar. 2016 (Summary)

INSURANCE

Essex Ins. Co. v. Galilee Med. Ctr. S.C.
Nos. 14-1791, 14-1801 (7th Cir. Mar. 4, 2016)

An insurance provider brought suit against a medical clinic and a physician employed by that clinic seeking to rescind a professional liability policy due to material misrepresentations in the policy application.  The physician and the medical clinic, when filling out applications for insurance, had both indicated that they did not provide weight reduction drugs and did not perform experimental procedures.  Subsequently, in a malpractice claim brought by an injured patient, the physician admitted to treating more than 5,000 patients with mesotherapy to reduce fat areas and contour body shape. Mesotherapy had not been approved by the U.S. Food and Drug Administration for any purpose.

The insurance company denied coverage to both the medical clinic and the physician in this malpractice suit and sought to rescind the policy.  The court held in favor of the insurance company, finding that the clinic and the physician had made misrepresentations on the insurance application by not indicating the types of weight reduction techniques that would be used.  Specifically, the court noted that any reasonable person would have understood from the application that the insurance company wanted to know whether nontraditional weight loss medications and procedures were being used to assess whether to issue a policy or increase premiums.

Long v. Parry — Feb. 2016 (Summary)

DATA BANK REPORTING

Long v. Parry
Case No. 2:12-cv-81 (D. Vt. Feb. 29, 2016)

A physician brought claims of professional negligence, breach of contract, breach of fiduciary duty, and violation of consumer protection laws against the attorney who represented him in litigation with a hospital.  The litigation centered on whether the hospital appropriately reported the physician to the data bank when he resigned from the medical staff.  After several years, the litigation with the hospital was ultimately resolved through mediation, which resulted in a $4 million settlement in favor of the physician. However, a dispute over how to distribute the funds arose once the settlement was paid out. After a tortured retrying of various facts involved in the earlier litigation with the hospital, the court granted the physician’s attorney’s motion for summary judgment on all of the physician’s claims.

Cerciello v. Sebelius — Mar. 2016 (Summary)

DATA BANK REPORTING

Cerciello v. Sebelius
Civil Action No. 13-3249 (E.D. Pa. Mar. 1, 2016)

The United States District Court for the Eastern District of Pennsylvania dismissed a physician’s challenge of a report that was made to the National Practitioner Data Bank by the American Academy of Orthopaedic Surgeons and the American Association of Orthopaedic Surgeons after they suspended his membership. The district court found the physician asserted no identifiable cause of action against the defendants and, even if he did, injunctive relief was inappropriate as he had other adequate remedies under the law.

In re Rockwall Reg’l Hosp., LLC — Mar. 2016 (Summary)

PEER REVIEW PRIVILEGE

In re Rockwall Reg’l Hosp., LLC
No. 05-15-01554-CV (Tex. App. Mar. 2, 2016)

The Court of Appeals of Texas granted a writ of mandamus requested by a hospital to vacate a trial court’s ruling to produce certain documents allegedly protected by medical peer review committee and medical committee privileges. The litigation with a physician-owned hospital arose out of a dispute about the buy-back of a physician’s shares after he ended his relationship with the hospital. Believing that other physicians received more favorable compensation for their shares, the physician sought the production of peer review and credentialing files related to other practitioners.

The trial court applied a routine business records exception in the state peer review statute to the requested documents when it determined that they were not privileged. The Court of Appeals disagreed when it conducted an in-camera review. It reasoned that the documents on their face related to the credentialing or re-credentialing process. Accordingly, the documents were protected by the medical peer review committee privilege and the trial court abused its discretion.

Farha v. Cogent Healthcare of Mich., P.C. — Feb. 2016 (Summary)

DISCRIMINATION AND WHISTLEBLOWER CLAIMS

Farha v. Cogent Healthcare of Mich., P.C.
Case No. 14-14911 (E.D. Mich. Feb. 29, 2016)

The United States District Court for the Eastern District of Michigan granted in part and denied in part a medical practice’s motion for summary judgment on claims made by a former employed hospitalist who sued the group after being terminated. The practice alleged that it fired the physician because she complained about her schedule for two years, was constantly tardy, and that she threatened to refuse to work when scheduled. The practice also noted she provoked a blowup with her supervisor in the middle of the hospital. The physician argued that the termination violated her employment contract, as she was never formally confronted about the complaints that had been raised about her tardiness. She also alleged that her termination violated the Americans with Disabilities Act (“ADA”) and the Family and Medical Leave Act (“FMLA”), alleging her scheduling issues were based on the treatment she was receiving for a detached retina. Finally, she brought a claim under the Michigan Whistleblower Protection Act, alleging that her termination was in retaliation for raising clinical concerns about another physician.

The court determined that it was not appropriate to grant summary judgment on the breach of contract claims, as the parties provided very different accounts of the physician’s employment and whether she was indeed arriving late for work.  The physician’s discrimination claim under the ADA would also go forward, as would her discrimination claims under the FMLA and the state whistleblower statute.  However, the court did grant the practice summary judgment on the ADA accommodation claims, finding the practice had engaged in the interactive process to determine a reasonable accommodation, as well as the physician’s FMLA interference claim.