Harris v. Advocate Health and Hosp. Corp. — Nov. 2015 (Summary)

MEDICAL MALPRACTICE – DISCLOSURES TO PATIENTS

Harris v. Advocate Health and Hosp. Corp.
No. 1-14-1773 (Ill. App. Ct. Nov. 19, 2015)

The Appellate Court of Illinois granted summary judgment/dismissal for a hospital that was sued by the estate of a patient who died after being struck by an automobile and then, upon admission to the hospital, accidentally overdosed by a nurse who administered 10 mg. of Versed, a sedative, without a doctor’s order.

At the time of the patient’s hospitalization and death, the patient’s daughter was informed the patient died due to injuries sustained from the automobile accident. In fact, it was not until a couple of days after the patient died that the nurse manager of the ED told the ED’s medical director about the overdose. Following that revelation – and the subsequent internal investigation and remediation – it was determined not to inform the patient’s family of the overdose or the fact that it could have contributed to the patient’s death. A new disclosure policy was drafted, however, as a result of the Risk Management Committee’s consideration of this patient’s case – and that policy was implemented at a later date.

When the medical director of the emergency department inquired as to whether the deceased patient’s family had been notified, he was informed that the CEO would not make any disclosures. The medical director of the ED was fired a few months later and sued, claiming that his termination was in retaliation for his advocating that the patient be informed of the Versed incident. During the course of his lawsuit, which was ultimately settled for $1 million, an investigator working on behalf of the medical director’s lawyer contacted the patient’s daughter to obtain authorization to access the patient’s medical records. As a result of that contact, the patient’s daughter was first alerted to the Versed overdose – resulting in this lawsuit against the hospital.

During the course of the litigation, the hospital claimed that the statute of limitations had expired on the medical malpractice claim. The daughter claimed that the statute of limitations should be tolled due to fraudulent concealment by the hospital, which prevented the daughter from discovering the malpractice.

In rejecting the daughter’s claim of fraudulent concealment, the court noted that information concerning the Versed doses was present in the medical record and the hospital made no misrepresentations to the patient’s daughter that prevented her from learning of her claim. Nothing in the record suggested that the physician who spoke with the patient’s daughter at the time of the patient’s hospitalization and death knew of the Versed incident or intentionally concealed it. Furthermore, the court of appeals noted the daughter was unable to show that any of the hospital administrators who knew of the Versed incident also knew about the initial conversation that took place between the daughter and emergency room physician. The court of appeals further held that, regardless of evidence of fraudulent concealment, the patient’s daughter’s claim would still fail because she failed to exercise ordinary diligence in investigating her claim. The patient’s daughter and an attorney had received the medical records in 2000, at the time she sued the automobile driver, and they could have taken steps at that time to learn the cause of the patient’s death.

Rowen v. Gonenne — Nov. 2015 (Summary)

PEER REVIEW PRIVILEGE

Rowen v. Gonenne
No. 161021046; A149358 (Or. Ct. App. Nov. 12, 2015)

A patient and his wife sued a gastroenterologist, his professional corporation, and a surgical facility for malpractice after the patient suffered serious complications after a routine colonoscopy revealed polyps, which were removed and resulted in massive bleeding. The crux of the lawsuit was that the patient’s bleeding was caused by the gastroenterologist’s failure to advise him to stop taking blood thinners in advance of the procedure. In fact, the gastroenterologist’s decision not to require discontinuation of blood thinners prior to a routine colonoscopy was consistent with the surgical center’s policy and was based, at least in part, on the results of a benchmarking study of post-polypectomy bleeding in which the surgical center had participated. At trial, the jury found for the gastroenterologist. The patient and his wife appealed.

Among other things, the patient argued that the benchmarking study should not have been admitted into evidence because it was privileged pursuant to the state peer review statutes. The court of appeals disagreed, holding that although the study was delivered to the peer review body of the surgery center, it was not privileged under the state peer review statute because it was not “prepared for” the peer review body. The court of appeals was not persuaded that a notation on the report indicating the study had been “Discussed at the Quality Management Committee” demonstrated the study was prepared for the peer review body.

The court of appeals also held that the trial court appropriately denied the patient the ability to cross-examine the gastroenterologist on a research report that was published after the patient’s procedure, finding that even though the report could have impeached the gastroenterologist by suggesting he was not knowledgeable about recent research, introduction of the report would run the risk of misleading the jury into thinking that the gastroenterologist’s conduct should have been informed by the report – which was not available to the gastroenterologist at the time of the patient’s procedure.

Kim v. Humboldt Cnty. Hosp. Dist. — Nov. 2015 (Summary)

TERMINATION OF EMPLOYMENT

Kim v. Humboldt Cnty. Hosp. Dist.
Case No. 3:12-cv-00430-MMD-WGC (D. Nev. Nov. 12, 2015)

The District Court for the District of Nevada denied a hospital’s motion for summary judgment with regard to a general surgeon’s claim that her First Amendment rights were violated when her employment was terminated in retaliation for seeking re-election to the Board of Trustees.

While the surgeon was serving her first term, the Board adopted a new conflict of interest policy to address conflicts of interest arising from employees’ service on the Board. Pursuant to the new policy, hospital employees were prohibited from engaging in any employment, activity or enterprise, including service on the hospital Board, which was in conflict with their duties as employees. If a conflict of interest were to arise, the policy provided that an employee could either resign from employment before taking office or accept paid or unpaid leave. Shortly after the policy was passed and after the surgeon applied for re-election to the Board, the Board voted to terminate her contract based on its decision to move from a single surgeon arrangement to a surgical services group. The surgeon sued, claiming that the pursuit of a surgical group was pretext – and that she was really fired in retaliation for seeking re-election to the Board, which was an activity protected by the First Amendment of the Constitution.

Because neither party asserted that the surgeon’s employment was terminated based on the new conflicts of interest policy adopted by the Board, the court disregarded the parties’ arguments over whether that policy was, in and of itself, constitutional. It denied summary judgment to the hospital on the retaliation claim, noting that there was a genuine issue of fact under dispute concerning whether the hospital’s purported reason for termination (pursuit of a group contract) was pretext.

U.S. ex rel. Ortiz v. Mount Sinai Hosp. — Nov. 2015 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Ortiz v. Mount Sinai Hosp.
No. 13 Civ. 4735 (RMB) (S.D. N.Y. Nov. 9, 2015)

The United States District Court for the Southern District of New York denied a hospital’s motion to dismiss claims made under the False Claims Act (“FCA”).

The relators who brought forth the claims were employed by the hospital as patient coordinators. They alleged that during their tenure they witnessed on a near-daily basis instances where the radiology billing department billed Medicare and Medicaid fraudulently and improperly for services purportedly provided. Specifically, they alleged that department engaged in doctor swapping, upcoding, phantom billing, multiple billing, combination misbilling, and wrongful retention.

The hospital responded by arguing that the relators improperly obtained confidential patient records as the basis for their complaint; that the medical records integral to the complaint contradict the allegations; and that the allegations failed to plead sufficient facts.

The court reasoned that it was premature to conclude that the records were obtained improperly because there is a strong public policy in favor of protecting those who report fraud against the government. The court also stated that it would be inappropriate to discredit the factual allegations of a complaint merely because they are contradicted, and that the relators adequately pled their claims.

Wellness, Inc. v. Pearl River Cnty. Hosp. — Nov. 2015 (Summary)

CONTRACTS – ARBITRATION/MEDIATION

Wellness, Inc. v. Pearl River Cnty. Hosp.
No. 2014-CA-01696-SCT (Miss. Nov. 19, 2015)

The Supreme Court of Mississippi denied a defendant-contractor’s motion to compel mediation and arbitration in a lawsuit brought by a hospital.

The chief executive officer of the hospital and the contractor executed an agreement pursuant to which the contractor was to renovate certain areas of the hospital. The hospital sued the contractor, among others, for fraud, conspiracy and other causes of action. The contractor argued that the agreement contained a mediation and arbitration clause, and filed a motion to compel mediation and arbitration with the trial court. The hospital countered that there was not a valid mediation and arbitration agreement. The trial court denied the contractor’s motion and appealed the denial.

The Supreme Court of Mississippi reasoned that a valid mediation and arbitration agreement did not exist because, although the chief executive officer and the contractor executed the agreement, the hospital board’s minutes did not include sufficient reference to obligations to arbitrate. The language in the minutes was considered general and imprecise. Therefore, it was not enough to draw an enforceable arbitration clause from the meeting minutes.

Gonzalez-Morales v. Presbyterian Cmty. Hosp., Inc. — Nov. 2015 (Summary)

EMTALA

Gonzalez-Morales v. Presbyterian Cmty. Hosp., Inc., Civ. No. 13-1906 (PG) (D. P.R. Nov. 17, 2015)

The United States District Court for the District of Puerto Rico granted in part and denied in part a hospital’s motion to dismiss EMTALA-related claims made by a patient.

The patient was taken to the hospital’s emergency room presenting with symptoms of swelling and redness of the left arm, a recent insect bite to the left hand, and severe right hip pain. The patient was prescribed intravenous antibiotics and pain medication, and was discharged. However, she claimed that although the pain in her left arm had subsided, she had continued to complain of right hip pain and difficulty walking prior to being discharged. One day later she returned to the hospital but was discharged without being admitted. The patient then returned to the hospital three days later but was once again discharged without being admitted. As a result of her condition, she claimed to have suffered destruction of her right hip bone, chronic pain, and difficulty walking.

The first claim brought by the patient was a failure to screen claim. The court was unwilling to dismiss this claim because the patient had sufficiently articulated her cause of action. Also, the hospital had failed to counter the allegation that the screening she was provided during her three visits was not uniform to the level of screening the hospital provides other patients presenting with similar complaints. The second claim brought by the patient was a failure to stabilize claim. The court dismissed this claim because the patient never alleged that she was suffering from or was diagnosed with an emergency medical condition before her discharge.

Troilo v. Michner — Nov. 2015 (Summary)

APPARENT AUTHORITY

Troilo v. Michner
Civil Action No. 13-2012 (D.N.J. Nov. 13, 2015)

The District Court of New Jersey denied a medical center’s motion for summary judgment with regard to a medical malpractice action brought by a patient who claimed the medical center was liable for a physician’s negligent stillbirth of the patient’s child.

The patient had received medical care from the physician at the medical center on two occasions, the first after falling on her stomach, and the second for the delivery of her stillborn child. Although the medical center had provided a “conspicuous disclaimer” of the independent status of the physician, the court explained such a disclaimer was only one factor among many that must be considered to determine whether the physician was acting under the apparent authority of the medical center. The court held a jury could find the medical center failed to take sufficient measures to provide notice of the doctor’s independence because of the patient’s difficulty with reading. Additionally, the court noted the patient was not provided an opportunity to reject the care of the physician, further supporting the decision to dismiss the motion.

Malanga v. NYU Langone Med. Ctr. — Nov. 2015 (Summary)

FALSE CLAIMS ACT – RETALIATION

Malanga v. NYU Langone Med. Ctr.
No. 14cv9681 (S.D. N.Y. Nov. 12, 2015)

The District Court for the Southern District of New York denied a motion to dismiss a claim brought by a former director of research against a university and her supervisor regarding retaliation under the False Claims Act (“FCA”), among other things.

The director alleged university employees were unlawfully billing the federal government for blood tests, overcharging federal grants for patient visits, and paying the salary of a post-doctorate employee out of an unrelated federal grant. Furthermore, the director reported the university to the Department of Defense for allegedly failing to adhere to study protocols by failing to follow up with 300 patients, at least one of whom died. The study was suspended as a result. In alleged retaliation, the director claimed her supervisor corroborated false complaints to the university human resources department made by another employee.

The district court upheld the director’s retaliation claim under the FCA, holding that if the court accepted the director’s allegation that the university’s billing practices were outside the scope of her job duties, the court could not determine whether she was subject to a heightened pleading standard as a “fraud alert” employee. Additionally, the district court held it was “inappropriate” to consider performance evaluations that alleged the director altered medical records and exhibited unprofessional conduct at an early stage of litigation. The district court also held the director did not waive her right to a federal retaliation claim by bringing a claim under a New York Labor Law prohibiting retaliatory conduct against employees who report improper patient care because the Supremacy Clause trumped any waiver of rights and remedies contained in the state law.

Molleston v. River Oaks Hosp., Inc. — Nov. 2015 (Summary)

Molleston v. River Oaks Hosp., Inc.
No. 2014-CA-00421-COA (Miss. Ct. App. Nov. 10, 2015)

The Mississippi Court of Appeals reversed a decision of a trial court, holding a hospital violated the due process rights of a neurosurgeon by failing to comply with the hospital’s own bylaws during the credentialing process. The neurosurgeon applied for medical staff privileges at the hospital, which were denied by the MEC upon recommendation of the Credentials Committee. The neurosurgeon requested a hearing before the hospital’s Fair Hearing panel, in accordance with the hospital’s bylaws. With regard to the composition of the committee, the hospital bylaws stated, “No Staff member or Board member who has actively participated in the consideration of the adverse recommendation or decision shall be appointed a member of this hearing committee.” However, the chair of the Credentials Committee was appointed to the Fair Hearing panel, where he participated in the panel’s deliberations, vote, and decision. After the Fair Hearing panel and Board both voted to uphold the denial of appointment and privileges, the neurosurgeon brought suit. While the trial court found that the hospital had shown “substantial compliance with its bylaws and procedural due process,” the appeals court disagreed, holding that the hospital failed to provide the neurosurgeon with an opportunity to be heard at a “meaningful time and in a meaningful manner” because the chair of the Credentials Committee served on the Fair Hearing panel.

Chattanooga-Hamilton Cnty. Hosp. Auth. v. UnitedHealthcare Plan of the River Valley, Inc. — Nov. 2015 (Summary)

Chattanooga-Hamilton Cnty. Hosp. Auth. v. UnitedHealthcare Plan of the River Valley, Inc.
No. M2013-00942-SC-R11-CV (Tenn. Nov. 5, 2015)

A hospital that was a non-contract provider for a Tenncare MCO’s beneficiaries claimed the MCO was underpaying the hospital for emergency services. The hospital claimed that, under the Deficit Reduction Act of 2005, the MCO was obliged to pay the hospitals which rates were negotiated by contract “the average contract rate that would apply under the State plan for general acute care hospitals or the average contract rate that would apply under such plan for tertiary hospitals” for emergency services. Tenncare had submitted two amendments to the state Medicaid plan to CMS, requesting the reimbursement for emergency outpatient services provided by non-contract providers to be set at “74% of the 2006 Medicare rates for those services,” and reimbursement regarding inpatient hospital admissions at non-contract provider hospitals required as a result of emergency outpatient services to be set at “57% of the 2008 Medicare Diagnostic Related Groups (DRG) rates.” CMS approved both of these amendments, and Tenncare promulgated regulations consistent with these amendment plans.

The hospital filed a complaint with the Chancery Court requesting declaratory judgment that the MCO was required by Tennessee law to pay the hospital “at the rate equal to the prevailing average contract rate payable by TennCare MCOs” for EMTALA-mandated services and “at a reasonable rate of reimbursement for” services provided to patients not mandated by EMTALA. The hospital also brought claims of unjust enrichment and breach of contract in relation to the underpayments. The MCO contended that because the hospital was challenging the applicability of the Tenncare regulations, the hospital’s complaint must be dismissed because the hospital failed to obtain a declaratory judgment from Tenncare, thereby failing to exhaust its administrative remedies as required by the Uniform Administrative Procedures Act (“UAPA”). Additionally, the MCO asserted a defense of set-off and recoupment, arguing it had paid the hospital for non-contract EMTALA-mandated services in excess of $6 million. The trial court dismissed all of the claims, holding the court was without jurisdiction until the hospital exhausted its administrative remedies. The Court of Appeals reversed, holding the dispute between the hospital and the MCO was “merely a disagreement over the interpretation of the regulations,” and that the hospital was not required to exhaust its administrative remedies. The MCO appealed the decision to the Tennessee Supreme Court.

On appeal, the Tennessee Supreme Court held that the resolution of the hospital’s claim would “necessarily require” the trial court to render a declaratory judgment concerning the validity of the Tenncare regulations, and the court was unable to do so until the hospital had exhausted its administrative remedies with Tenncare. The hospital was required to exhaust its administrative remedies despite Tenncare not being a party to the suit between the hospital and MCO. The court did reverse the trial court’s decision to dismiss the hospital’s claims for money damages and the MCO’s counterclaim for recoupment, noting the validity of the Tenncare regulations is implicit in each of these claims. Therefore, the court remanded these claims to the trial court to be held in abeyance pending the resolution of the Tenncare proceedings.