Barnum v. Ohio State Univ. Med. Ctr. — Feb. 2016 (Summary)

RETALIATION AND THE ADA

Barnum v. Ohio State Univ. Med. Ctr.
No. 15-3450 (6th Cir. Feb. 19, 2016)

The United States Court of Appeals for the Sixth Circuit affirmed a district court’s grant of summary judgment in favor of a medical center with regard to a CRNA’s claims that she was retaliated against in violation of the First Amendment and discriminated against in violation of the Americans with Disabilities Act (“ADA”). After exhibiting concerning work-related behavior, including expressing suicidal ideation to coworkers, the medical center required that the CRNA undergo a psychiatric evaluation. The CRNA was placed on paid leave and was told that she could return to work after clearing a fitness for duty examination by a psychiatrist of her choosing if the psychiatrist discussed his findings with the chief of the anesthesiology department. Eventually, the CRNA’s paid leave expired and she was moved to unpaid leave. The CRNA was ultimately reinstated after satisfying the conditions related to the psychiatric evaluation.

Nonetheless, the CRNA sued the medical center claiming that it retaliated against her in violation of the First Amendment for protected speech regarding privacy practices. The CRNA filed a complaint with the U.S. Department of Health and Human Services (“HHS”), alleging that the medical center violated federal standards by not restricting her protected health information from being shared and used by her husband. The court of appeals rejected this claim, concluding that the retaliation of which the CRNA complained, including placing her on leave, all occurred before she lodged the complaint with HHS. The court of appeals also rejected the CRNA’s claim that the medical center violated the ADA by requiring her to submit to a medical examination. The court of appeals noted that the inability to perform routine tasks and expression of suicidal thoughts “constitute[d] significant evidence that would cause a reasonable person to inquire whether the employee is still capable of performing her job.” Accordingly, the medical examination requirement was held not to have violated the ADA.

Estate of Ray v. Forgy — Feb. 2016 (Summary)

PEER REVIEW PRIVILEGE

Estate of Ray v. Forgy
No. COA15-236 (N.C. Ct. App. Feb. 16, 2016)

The Court of Appeals of North Carolina reversed an order from the trial court that ordered a hospital to produce documents in a medical malpractice suit. The family of the patient sought documents regarding the physician’s malpractice insurance coverage history and the physician’s recredentialing history, among other things.

On appeal, the hospital argued that all of the documents were protected from discovery by the state peer review statutes. The court agreed stating that the requested documents contained records and materials produced by the hospital’s medical review committees and were privileged. The court also reasoned that the medical review committees’ materials survived a merger between the original hospital, where the patient received care, and the health system that currently owns the hospital. The medical review committees were properly maintained by the new owner in accordance with the medical staff bylaws. Therefore, the medical review committees met the requirements of the peer review statute and the documents in question were privileged.

Intermountain Stroke Ctr., Inc. v. Intermountain Health Care, Inc. — Feb. 2016 (Summary)

FALSE ADVERTISING

Intermountain Stroke Ctr., Inc. v. Intermountain Health Care, Inc.
No.14-4045 (10th Cir. Feb. 9, 2016)

The 10^th Circuit Court of Appeals upheld a district court ruling which dismissed a claim under the federal Lanham Act and remanded a state law claim to state court.

A neurologist specializing in stroke care and her employer, a stroke center (“plaintiffs”), alleged violations of the state’s Truth In Advertising Act (“TIAA”) and claims of unfair competition through false advertising under the federal Lanham Act against a parent corporation that operated a network of hospitals, and two subsidiaries of the parent, one which operated medical facilities and the other which operated a health maintenance organization (“defendants”). The plaintiffs claimed that the defendants misled prospective customers regarding the nature and quality of defendants’ services, causing the stroke center to close its doors. The district court dismissed the Lanham Act claim and remanded the TIAA claim to state court and the plaintiffs appealed to the 10^th Circuit Court of Appeals.

Under the Lanham Act, a plaintiff must plausibly allege: (1) that a defendant made material false or misleading representations of fact in connection with the commercial advertising or promotion of its product; (2) in commerce; (3) that are either likely to cause confusion or mistake as to the origin, association or approval of the product with or by another or the characteristics of the goods or services; and (4) injure the plaintiff.

The district court ruled that defendants’ general marketing statements, such as those pertaining to “best medical practices,” were not statements of fact but were mere “puffery” and thus not in violation of the Lanham Act.

Also, the district court found that three specific statements alleged by the plaintiffs to be in violation of the Lanham Act were not actionable because the statements were not false or misleading under the Act. In the first specific statement, the plaintiffs attacked the defendants’ website alleging that it misled consumers in the way the website listed physicians and that consumers could be deceived in thinking more specialists worked for the facility than actually did. The district court held that the statement was true and not misleading. The second specific statement was that the defendants did not adhere to their internal ethics code. The court held that the ability or inability to adhere to an ethics code is not relevant to a false advertising claim. The third specific statement was that a stroke pamphlet published by the defendants had incorrect information regarding stroke care. The court held that the language is not actionable because it is unrelated to the nature, characteristics, or qualities of the provider’s services. Therefore, the court of appeals upheld the findings of the district court.

U.S. ex rel. Schramm v. Fox Valley Physical Servs. — Feb. 2016 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Schramm v. Fox Valley Physical Servs.
No. 12C8262 (N.D. Ill. Feb. 11, 2016)

The United States District Court for the Northern District of Illinois denied a motion to dismiss allegations of violations of the False Claims Act (“FCA”), payment under mistake of fact, and unjust enrichment against various defendants.

A physician’s assistant was employed by a health care entity. She alleged facts against the entity, including that she was not given her own password to log into the electronic medical record system to enter Medicare bills. She was told to log in using a physician’s login identification and enter information falsely under the physician’s name so that the service would be billed at the physician rate instead of the physician assistant rate of billing. She also alleged that slips of paper were used to record patient treatment records instead of entering the information directly into patient files. This was done so that the services could be billed under a different individual’s name who was CMS authorized so that the provider could receive payment from CMS. She also claimed that bills were made for services that were never rendered. The court held that her amended complaint described above contained sufficient information and that the “who, what, when, and how” were explicitly described and therefore the motion to dismiss was denied.

W. Va. ex rel. Wheeling Hosp., Inc. v. Wilson — Feb. 2016 (Summary)

PEER REVIEW PRIVILEGE

W. Va. ex rel. Wheeling Hosp., Inc. v. Wilson
No. 15-0558 (W. Va. Feb. 9, 2016)

The Supreme Court of Appeals of West Virginia granted a writ of prohibition to preclude the enforcement of a discovery order issued by a lower court in a medical malpractice and negligent credentialing suit by a patient who suffered bilateral vocal cord paralysis after experiencing complications from a thyroidectomy.  During discovery, the patient requested access to her doctor’s application materials for the renewal of his staff privileges. The lower court granted this request, reasoning that the documents fell under the “original source” exception to the peer review privilege because they “were not created solely for the hospital’s [credentialing] committee but are otherwise available from original sources extraneous to that committee.”

The Supreme Court of Appeals disagreed with the lower court, stating that the requested records were created specifically for and exclusively used by a peer review committee, and therefore shielded by the peer review statute. The court also reasoned that peer review protection does not stem from a document being reviewed by a peer review committee. (Notably, the Illinois Supreme Court recently reached the opposite conclusion, in Klaine v. S. Ill. Hosp. Servs., No. 118217 (Ill. Jan. 22, 2016) with respect to the discoverability of documents considered by credentials committees.)

Fowler v. Coast to Coast Health Care Servs., Inc. — Feb. 2016 (Summary)

WHISTLEBLOWER, DEFAMATION

Fowler v. Coast to Coast Health Care Servs., Inc.
Civil Action No. 3:15-CV-00071-GFVT (E.D. Ky. Feb. 8, 2016)

The United States District Court for the Eastern District of Kentucky granted in part and denied in part a motion to dismiss claims of whistleblower retaliation and tortious interference with a business relationship brought by the former director of clinical services of a health system against a physician staffing organization. The staffing organization provided physicians to staff the emergency department of the health system. The director made numerous allegations of fraud and misconduct against the staffing organization and its employees. First, the director reported to the health system CEO that one of the emergency room physicians failed to treat a patient who came to the emergency room. Second, the director reported the staffing organization had made a fraudulent claim for services to her insurance provider because none of the staffing organization’s physicians performed any services in relation to her husband’s cataract surgery. Finally, the director sent a peer review report criticizing some of the staffing organization’s physicians to the medical executive committee of the health system. The following month, the director alleged the staffing organization threatened to terminate its contract with the health system because of the “slanderous and libelous comments by [the health system]’s staff.” Approximately one week later, the health system fired the director. The director filed claims of whistleblower retaliation and tortious interference with a business relationship against the staffing organization.

The district court granted the staffing organization’s motion to dismiss the former director’s whistleblower claim, holding the Kentucky whistleblower statute does not apply to a third party who is not an employer. However, the district court denied the staffing organization’s motion to dismiss the director’s tortious interference with a business relationship claim, holding that the director’s at-will employment status did not bar her from bringing such a cause of action.

Am. Hosp. Ass’n v. Burwell — Feb. 2016 (Summary)

MEDICARE – TIMELY CLAIMS PROCESSING

Am. Hosp. Ass’n v. Burwell
No. 15-5015 (D.C. Cir. Feb. 9, 2016)

The United States Court of Appeals for the District of Columbia Circuit held that the Secretary of Health and Human Services is statutorily required to process Medicare claims appeals in a timely fashion and hospitals have the right to demand compliance by seeking a writ of mandamus ordering the Secretary to comply. Hospitals filed suit against the Secretary of HHS because of a massive backlog of undecided claims. The hospitals have a significant amount of money tied up during the appeals process and the statutory period within which the appeal should have been resolved has expired. The hospitals are unable to do renovations or buy needed materials such as ICU beds not knowing the status of their funding. The district court held that the writ was unwarranted because the political branches were working on a resolution to the problem. The case moved to the United States Court of Appeals, which stopped short of actually granting the writ. The Court of Appeals remanded the matter to the lower court for consideration of whether “compelling equitable grounds” exist to issue a writ of mandamus at this time. The court’s opinion strongly suggested, however, that if Congress and/or the Secretary do not solve this problem soon, a writ of mandamus will be inevitable.

Lawrence and Mem’l Hosp. v. Burwell — Feb. 2016 (Summary)

MEDICARE – RECLASSIFICATION RULE

Lawrence and Mem’l Hosp. v. Burwell
Docket No. 15-164-cv (2d Cir. Feb. 4, 2016)

The United States Court of Appeals for the Second Circuit held that a regulation issued by the Secretary of Health and Human Services violated the Medicare Act and the Administrative Procedure Act. The regulation in question is known as the “reclassification rule,” which provided that a hospital that has been reclassified from “urban” to “rural” may not receive additional reclassification by the Medicare Geographic Classification Review Board. Certain hospitals are able to be reclassified as “rural” in order to qualify for preferable drug pricing under Medicare’s Drug Discount Program. Without the “reclassification rule,” the same hospital could reclassify a second time back to “urban” to receive an increased wage index as an additional benefit, while keeping the preferable drug pricing status.

A hospital challenged the regulation in order to attempt to receive both “urban” and “rural” classifications. The court agreed with the hospital, reasoning that the plain language of the statute, and its legislative history, supported the hospital’s interpretation. The regulation was held to be invalid and the case was remanded to the district court to impose appropriate remedies.

Univ. of Va. Med. Ctr. v. Jordan — Feb. 2016 (Summary)

WRONGFUL TERMINATION

Univ. of Va. Med. Ctr. v. Jordan
No. 0790–15–2 (Va. Ct. App. Feb. 2, 2016)

The Court of Appeals of Virginia affirmed the ruling of a hearing officer that a state-employed nurse who accessed the medical record of her sick ex-husband, at his request and after he signed appropriate authorization forms, should be reinstated and awarded back pay.

The ex-husband suffered from an advanced stage of multiple myeloma, and he was treated for this disease at the same medical center where the nurse was employed. The nurse and her ex-husband remained close after their divorce, and he executed a number of documents providing the nurse with access to his medical records, including a durable power of attorney, an advanced medical directive, and an authorization form. At her ex-husband’s request, the nurse accessed his medical record to help him understand the significance of some of his test results. An internal audit by the medical center revealed the nurse had accessed her ex-husband’s medical record four times. When questioned by the medical center, the nurse explained she had accessed the records on her ex-husband’s behalf. The ex-husband corroborated the story.

The medical center sought to fire the nurse for “serious misconduct” resulting from numerous violations of company policy. The nurse filed a grievance challenging the medical center’s action, and a hearing officer ruled in her favor. The hearing officer’s decision was affirmed by the Department of Human Resources Management and the circuit court. The medical center then appealed to the court of appeals.

The medical center framed the issue for the appellate court as follows: “The fundamental questions on appeal are whether the Medical Center may develop and enforce policies containing rules that limit employee access to an electronic medical record which it owns and is its property under Virginia law and whether any employee of the Medical Center can authorize another employee to intentionally violate prohibitions and rules established in those policies.”

The court of appeals noted that under state law governing the review of personnel actions by state agencies, it had no authority to second-guess whether the hearing officer correctly interpreted agency policy. The court of appeals could only review whether the hearing officer’s decision was “contradictory to law.” The court ruled that it was not contradictory.

The court of appeals held the nurse was acting as an agent on behalf of her ex-husband when she accessed his medical records for his benefit and at his direction. Furthermore, the court of appeals held that no provision in HIPAA prevented the disclosure because the nurse was acting on her ex-husband’s behalf and he had filled out the necessary authorization form.

The medical center argued that it would be impossible to audit and account for these types of disclosures. The court of appeals rejected the argument, noting that an internal audit had revealed the disclosures and that the medical center need not account for disclosures of patients’ private health information that is made to patients themselves.

Sumner v. Summerlin Hosp. Med. Ctr. LLC — Feb. 2016 (Summary)

EMTALA

Sumner v. Summerlin Hosp. Med. Ctr. LLC
No. 2:14-cv-02121-JAD-VCF (D. Nev. Feb. 1, 2016)

The federal district court for Nevada dismissed an EMTALA complaint against a hospital, joining the many other courts who have ruled that EMTALA does not create a federal cause of action for malpractice. The litigation arose out of the death of a 91-year-old patient. The patient was taken to the emergency room where she complained of chest pain. After receiving a CT scan, the family was assured that she was not in immediate danger and that there was no life-threatening condition. However, early the next morning, she died from gallbladder torsion.

The family argued that the hospital violated EMTALA’s screening and stabilization requirements. However, the court disagreed because EMTALA violations do not occur if a hospital fails to detect or misdiagnoses an emergency condition. Furthermore, the court added that allegations of substandard care are cognizable under state tort law, not under EMTALA. The judge declined to exercise supplemental jurisdiction in relation to the remaining state law claims and remanded these claims back to a Nevada state court.