Cent. Kan. Med. Ctr. v. Hatesohl — Mar. 2016 (Summary)

CORPORATE PRACTICE OF MEDICINE

Cent. Kan. Med. Ctr. v. Hatesohl
Nos. 113,675, 113,834 (Kan. Ct. App. Mar. 18, 2016)

A family practitioner entered into an employment agreement with a medical center that was operating as an Ambulatory and Surgical Center.  The physician resigned his position and the medical center filed a suit for breach of the non-compete agreement that was part of the employment agreement.  Additionally, the former employer/medical center filed suit against the physician’s new employer for breach of the non-compete agreement.

The district court held in favor of the physician and his new employer on the grounds that the employment agreement between the physician and the medical center was unenforceable because the center was not licensed properly to allow a family practitioner to practice at the facility.  The appellate court reversed, finding that the district court misunderstood the corporate structure of the medical center and the licensing of the medical center and thus the court’s conclusion that the employment agreement was unenforceable was erroneous.

Arapahoe Surgery Ctr., LLC v. Cigna Healthcare, Inc. — Mar. 2016 (Summary)

ANTITRUST

Arapahoe Surgery Ctr., LLC v. Cigna Healthcare, Inc.
Civil Action No. 13-CV-3422-WJM-CBS (D. Colo. Mar. 21, 2016)

The United States District Court for the District of Colorado granted in part and denied in part an insurance company’s motion for summary judgment on claims made by a second insurance company under antitrust law and the Employee Retirement Income Security Act (“ERISA”). This litigation arose from disputes over the handling of billing, payment, and fee-forgiving procedures for patients with no in-network responsibility. The court reasoned that because of a lack of evidence of an antitrust injury there was no way a reasonable jury could find in the second insurance company’s favor on its antitrust claims. The court also reasoned that the second insurance company’s ERISA claims were barred for failure to exhaust administrative remedies as to any claim for benefits that was not appealed through both administrative levels under the plans in dispute.

Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys. — Mar. 2016 (Summary)

ANTITRUST

Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys.
No. 14-4166 (6th Cir. Mar. 22, 2016)

The United States Court of Appeals for the Sixth Circuit reversed the holding of the district court, which had held that a hospital network was a single entity, and dismissed an antitrust case on summary judgment without adjudicating the question of whether the behavior of the network of hospitals constituted impermissible anticompetitive conduct.  The court of appeals found instead that a reasonable juror could determine that four hospitals that participated in a joint operating agreement were a “combination” for purposes of the antitrust laws, rather than a single entity that could not conspire with itself.

The court of appeals found that the complaint contained information that supported the plaintiff’s assertions that the defendant hospitals colluded to keep the plaintiff from competing in the local market.  The evidence included e-mails, letters, direct statements, and the fact that the defendants did not have any shared assets.  The court of appeals held that because the plaintiff presented the evidence above of conduct and business operations that raise the possibility of concerted action among the defendant hospitals, the question remains upon remand whether hospitals that had previously pursued their own interests separately and that continue to seem to compete, combined illegally in restraint of competition.  Thus, the court of appeals reversed the judgment of the district court and remanded the case.

Baptist Health Sys. v. Rutledge — Mar. 2016 (Summary)

PEER REVIEW

Baptist Health Sys. v. Rutledge
No. CV-15-616 (Ark. Mar. 17, 2016)

The Supreme Court of Arkansas ruled that a hospital’s challenge to a state law governing peer review was not capable of being reviewed by the courts because there was no “justiciable controversy.”  Because there was no “actual, present controversy” between the parties, the supreme court dismissed the appeal.

Offor v. Mercy Med. Ctr. — Mar. 2016 (Summary)

EMPLOYMENT DISCRIMINATION

Offor v. Mercy Med. Ctr.
No. 15-CV-2219 (ADS)(SIL) (E.D.N.Y. Mar. 10, 2016)

The United States District Court for the Eastern District of New York granted a medical center’s motion to dismiss claims of national origin and race discrimination, retaliation, libel, slander, and intentional infliction of emotional distress made by a physician. The physician was an African American woman born in Nigeria. Among other things, the physician was denied moonlighting hours, not invited to a training class, denied vacation time, and demoted due to low volume.  Eventually, she was terminated due to unprofessional behavior and improper advice given to parents of a patient. In assessing the claims made by the physician, the court ruled that some of the medical center’s actions did not rise to the level of an “adverse action.”  Also, the physician relied solely on conclusory allegations without providing any sufficient factual allegations from which a jury could plausibly conclude that the medical center’s actions were based on her status as an African American.

Spalding v. Spring View Hosp., LLC — Mar. 2016 (Summary)

NEGLIGENT CREDENTIALING

Spalding v. Spring View Hosp., LLC
No. 2013-CA-000842-MR (Ky. Ct. App. Mar. 11, 2016)

The Court of Appeals of Kentucky consolidated three cases with similar claims of negligent credentialing.  Prior to these cases, the Commonwealth of Kentucky did not recognize the tort of negligent credentialing.  However, because the court saw no legal or policy-based argument persuasive enough to continue not recognizing the tort, it reasoned that it should recognize negligent credentialing as a cause of action and as a means by which individuals can hold hospitals liable for the hospital’s negligent extension or renewal of staff privileges and credentials to independent contractor physicians.

The first of the consolidated cases dealt with an orthopedic surgeon whose knee replacement surgery resulted in numerous complications for a patient. Here, the court affirmed summary judgment granted to the hospital because the patient failed to establish a proper standard of care and a deviation therefrom.

The second consolidated case dealt with the same orthopedic surgeon whose separate patient also experienced numerous complications after receiving knee surgery. Here, the court affirmed the denial of the hospital’s motion for summary judgment emphasizing that the statute of limitations did not bar the patient’s claims.

The final consolidated case dealt with a different surgeon and a patient whose spinal stabilization procedure resulted in complications. Here, the court reversed the circuit court’s dismissal of this patient’s negligent credentialing claim and remanded the case for further proceedings.

U.S. ex rel. Phillips v. Pediatric Services of America — Nov. 2000 (Summary only)

U.S. ex rel. Phillips v. Pediatric Services of America
No. 3:97CV360-P (W.D.N.C. Nov. 30, 2000)

A former employee of a pediatric group filed a Medicare False Claims Act (“FCA”) complaint as a qui tam relator alleging that the group allowed non-physician employees to complete charts. The government declined to intervene. The U.S. District Court for the Western District of North Carolina denied the group’s motion to dismiss, holding that qui tam relators are subject to enough specific controls by the government, including intervention and management of the suit, as to avoid the possibility that the qui tam relator will “impermissibly undermine” the government to such a degree that it would violate the doctrine of separation of powers or the “take care” clause of the Constitution.

Wyttenbach v. Board of Tennessee Medical Examiners — Mar. 2016 (no Summary)

Gallagher v. Penobscot Cmty. Healthcare — Mar. 2016 (Summary)

ADEA

Gallagher v. Penobscot Cmty. Healthcare
Civil No. 1:15-CV-244-DBH (D. Me. Mar. 15, 2016)

The United States District Court for the District of Maine granted a health center’s motion to dismiss age discrimination claims made by one of its physicians whose employment was terminated.  The physician practiced dermatology and received complaints, including that he was “old school.” The court dismissed the physician’s Age Discrimination in Employment Act (“ADEA”) and constitutional claims because he failed to file a timely complaint with the Equal Employment Opportunity Commission.  The court also dismissed the physician’s suit against the federal government, holding that even though the health center and its employees were entitled to Federal Torts Claim Act immunity, this did not permit the physician to sue the government in an employment or peer review matter.  The court dismissed the physician’s state law claims without prejudice.

Liu v. Cook Cnty. — Mar. 2016 (Summary)

DISCRIMINATION AND RETALIATION

Liu v. Cook Cnty.
No. 14-1775 (7th Cir. Mar. 15, 2016)

The United States Court of Appeals for the Seventh Circuit affirmed a lower court’s grant of summary judgment for a government hospital on claims of Title VII and section 1981 discrimination and retaliation brought by a former employed physician of Chinese descent.  The court concluded that defendants honestly believed that the employee posed a danger to patients and that reprimands were not related to her membership in any protected class.  The hospital took the challenged action based on the surgeon’s repeated refusal to operate on patients with appendicitis, which she allegedly refused to do so over several years.