U.S. ex rel. Jacobs v. CDS, P.A. – Sept. 2015 (Summary)

QUI TAM

U.S. ex rel. Jacobs v. CDS, P.A., Case No. 4:14-cv-00301-BLW (D. Idaho Sept. 28, 2015)

The United States District Court for the District of Idaho granted in part and denied in part a medical center’s motion to dismiss a physician-relator’s qui tam suit, and denied a clinic’s motion to dismiss the physician-relator’s qui tam suit.

The physician-relator alleged that his former employers, a medical center and a women’s health clinic, falsely and fraudulently submitted claims for medical services provided to Medicare and Medicaid patients who were referred to the medical center by the clinic in violation of the Anti- Kickback Statute and the Stark Law. The physician-relator alleged that the medical center and clinic engaged in a scheme to shift the clinic’s overhead costs to the medical center as a reward to the clinic for referring patients to the medical center. Both the medical center and the clinic moved to dismiss these claims. The court denied the clinic’s motion by rejecting its argument that the physician-relator failed to plead with particularity. The court granted in part and denied in part the medical center’s motion, granting the physician-relator more time to present facts to support his complaint. The court noted that evidence of a scheme is enough at this stage to allow the case to go forward; evidence of a particular referral is not necessary.

Pac. Emp’rs Ins. Co. v. Travelers Cas. and Sur. Co. – Sept. 2015 (Summary)

PROFESSIONAL LIABILITY INSURANCE

Pac. Emp’rs Ins. Co. v. Travelers Cas. and Sur. Co., No. 3:11-cv-924 (SRU) (D. Conn. Sept. 25, 2015)

This is a declaratory judgment action involving a hospital’s insurance carriers and the scope of their policies based on claims filed against the hospital by victims of a physician who was alleged to have sexually abused children who were his patients.

The hospital carried two insurance policies, a general liability policy (“GL”) and a hospital professional liability policy (“HPL”), which were supplemented by a blanket catastrophe policy. The insurers disagreed about the scope of their policies regarding the abuse and the coverage of the settlement payments related to the abuse.

The blanket catastrophe insurer basically argued that both the HPL and GL must be exhausted before its policy was triggered, rather than just the HPL. The hospital objected to that position, essentially arguing that it would be left with uncovered costs if the HPL was exhausted because the GL was inapplicable to the claims. The court held in favor of the hospital that if the HPL coverage limits are reached for a claim that would otherwise have been covered, the excess catastrophe policy begins paying.

Byars v. UAB Hosp. Mgmt., LLC – Sept. 2015 (Summary)

HIPAA VIOLATIONS/DISCRIMINATION

Byars v. UAB Hosp. Mgmt., LLC, Civil Action No. 2:14-CV-1338-WMA (N.D. Ala. Sept. 25, 2015)

The District Court for the Southern Division of the Northern District of Alabama granted a hospital management organization’s motion for summary judgment with regard to a white nurse’s Title VII claims of racial discrimination. The court held the plaintiff nurse could not establish she was treated differently from similarly situated employees because, although two African-American nurses at the hospital were not fired for violations of the hospital management organization’s HIPAA policy, the plaintiff nurse’s alleged HIPAA violations were “qualitatively and quantitatively” different. While the other nurses’ HIPAA violations were single offenses where the nurses accessed limited information, the plaintiff nurse had numerous HIPAA violations, including accessing her own medical records, accessing her daughter’s medical records, and accessing the medical records of other employees. Additionally, the plaintiff nurse had accessed the full medical records of two participants in a research study without the requisite pre-screening checklist form, in violation of the HIPAA policy approved IRB protocol.

The court also held the plaintiff nurse failed to show her termination was pretextual because the nurse stated in her EEOC complaint she was terminated because of a “HIPAA violation; which [she] admitted”; she admitted that accessing her own medical records, her daughter’s medical records, and the medical records of a coworker were all in violation of the hospital management organization’s HIPAA policy; and she failed to refute the report of the security and privacy coordinator who concluded the plaintiff nurse had violated the HIPAA policy and presented a “high risk of harm” to the patients whose information she had accessed. The court noted that a letter from the Alabama board of nursing stating her conduct “did not constitute a provable violation of the Nurse Practice Act” was of diminished probative value because neither the plaintiff nurse nor the letter included any information of how the Nurse Practice Act was analogous to the HIPAA policy of the hospital management organization.

Isom v. Wesley Med. Ctr. – Sept. 2015 (Summary)

RACIAL DISCRIMINATION AND RETALIATION

Isom v. Wesley Med. Ctr., Civil Action No. 2:14-CV-190-KS-MTP (S.D. Miss. Sept. 23, 2015)

The District Court for the Southern District of Mississippi denied a defendant medical center’s motion to dismiss an anesthesiologist’s Title VII racial discrimination claims against it, as well as the anesthesiologist’s retaliation claims against the chief executive officer.

The medical center argued that the anesthesiologist was an independent contractor, not an employee, for purposes of the Title VII claim, and pointed to the services agreement between it and the anesthesiologist. The court held that whether an individual is an employee under Title VII is a “fact-intensive inquiry” that relies upon a multi-factored analysis, and that it would be “imprudent” to rely solely upon the language of the agreement.

The court also denied the CEO’s motion to dismiss with regard to the anesthesiologist’s claims for racial discrimination and retaliation. The court held the anesthesiologist had alleged sufficient facts to make a plausible claim of discrimination and retaliation because the anesthesiologist alleged he was terminated by the CEO one week after lodging a complaint against the CEO with the medical staff because the anesthesiologist had been prohibited from firing a white physician even after the anesthesiologist reported the physician’s clinical weaknesses to the CEO.

Lynch-Ballard v. Lammico Ins. Agency, Inc. – Sept 2015 (Summary)

PROFESSIONAL LIABILITY INSURANCE

Lynch-Ballard v. Lammico Ins. Agency, Inc., No. 14-CA-793 (La. Ct. App. Sept. 23, 2015)

A Louisiana Court of Appeals dismissed a physician’s claims against her professional liability insurance carrier for settling a medical malpractice case against her without her consent, using her name in the settlement documents after agreeing it would not do so and reporting the settlement to the National Practitioner Data Bank.

The court held that under the clear terms of the insurance policy the carrier was not required to obtain the physician’s consent to settle the case because she was no longer paying for the policy. The court also ruled that there was an absence of evidence or factual support for the physician’s claim that the carrier agreed to not include her name in the settlement agreement. Finally, the court held that the physician had no claim in regard to her allegation of wrongful reporting of the settlement to the National Practitioner Data Bank, since the report of the settlement was not false.

Jarrell v. Kaul – Sept. 2015 (Summary)

NEGLIGENT HIRING

Jarrell v. Kaul, No. A-42-13 (072363) (N.J. Sept. 29, 2015)

The Supreme Court of New Jersey ruled that a negligent hiring claim may be asserted against a health care facility that granted privileges to a defendant physician who had not complied with a state statute that requires medical malpractice insurance.

The patient was operated on by a physician who had been granted privileges at a health care facility, but who had no medical malpractice insurance, as mandated by a state statute. The patient experienced new pain after the surgery, and filed a lawsuit against the health care facility, among others, for allowing an uninsured physician to perform procedures at the facility. The trial court dismissed the claim, since the patient lacked an expert who would testify that the facility deviated from acceptable standards by permitting an uninsured physician to practice at its facility. Finally, the court ruled that the patient could bring a negligent hiring claim against the hospital for hiring a physician without liability insurance, and the issue was remanded to trial because discovery would be necessary to clarify surrounding issues.

Ralph v. St. Anthony’s Med. Ctr. – Sept. 2015 (Summary)

TORTIOUS INTERFERENCE WITH CONTRACT

Ralph v. St. Anthony’s Med. Ctr., No. ED 102035 (Mo. Ct. App. Sept. 22, 2015)

A physician whose surgical privileges were revoked at a hospital sued the hospital for tortious interference with contract due to his inability to continue his staff membership at or ownership interest in an ambulatory surgical center.  The physician needed to have privileges at a local hospital in order for these to continue.  The Missouri court held that it could only rule on whether the hospital had properly followed the due process and hearing provisions in its medical staff bylaws, which it had done. The physician had no ability to sue the hospital as to his relationship with the ambulatory surgical center.

U.S. ex rel. Fowler v. Evercare Hospice, Inc. – Sept. 2015 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Fowler v. Evercare Hospice, Inc., Civil Action No. 11-cv-00642-PAB-NYW (D. Colo. Sept. 21, 2015)

In this False Claims Act lawsuit, the court found that the facts supported the government’s case and denied the hospice’s motion to have the case dismissed. The court found that the hospice was submitting false claims to the government for payment for treatment received by patients who did not qualify for hospice care.

The court found that the defendant provided hospice care in this case to patients who should not have been certified by Medicare standards to receive the care.  The court found that the hospice provider pressured and incentivized employees to admit patients into hospice care.  The employees were also paid bonuses for each patient admitted.

Jackson v. United States – Sept. 2015 (Summary)

PEER REVIEW

Jackson v. United States, Case No.: 3:14-cv-15086 (S.D. W. Va. Sept. 8, 2015)

The United States District Court for the Southern District of West Virginia denied a patient’s request for production of certain documents for use in a medical negligence action that the hospital claimed were protected from discovery by the State Peer Review Statute. The patient claimed that a medical center improperly withheld documents that were not generated as part of a peer review process. Instead, claiming that since the documents were prepared in the ordinary course of business, they were discoverable.

Following an “in camera” review of the documents at issue, the court disagreed. The court ruled that the documents were clearly prepared as part of the hospital’s peer review process. The court also disagreed with the patient’s claim that the hospital had waived the peer review privilege when its employees met and discussed the patient’s treatment outside of the formal peer review process.

Hsu v. Prime Healthcare Servs. III, LLC – Sept. 2015 (Summary)

ARBITRATION

Hsu v. Prime Healthcare Servs. III, LLC, E060953 (Cal. Ct. App. Sept. 14, 2015)

The Court of Appeal for the Fourth District of California affirmed the denial of an entity’s motion to compel arbitration with a physician, holding the physician’s advocacy for patient care and participation in a lawsuit against a hospital that was owned by the Employer, were outside the scope of the arbitration clause set forth in the physician’s employment contract.

The physician, who was the head of a medical group, became the medical director of a hospital owned by the Employer in 2008. The physician’s medical director agreement provided that “[a]ny dispute or controversy concerning non-professional issues…shall be determined and settled by arbitration.” In 2013, the physician raised concerns on behalf of his medical group that a second hospital owned by the Employer was allegedly increasing its revenue by admitting patients of the medical group to the second hospital instead of placing them in observation status. The medical group filed suit against the second hospital with the help of the physician medical director. One month after the suit was filed, the Employer terminated the physician from his medical director position at the first hospital. The physician alleged he was terminated for advocating on behalf of his patients at the second hospital, and filed a whistleblower action in response.

The Employer filed a motion to compel arbitration of the whistleblower action, arguing the physician’s advocacy at the second hospital was a “non-professional” issue, requiring arbitration. The trial court disagreed and the appellate court affirmed the trial court’s decision, holding that the physician’s claims under the whistleblower statute “necessarily relates” to the physician’s standards of professional practice, and thus were not covered by the arbitration provision.