Hooper v. Proctor Health Care Inc. — Oct. 2015 (Summary)

DISABILITY DISCRIMINATION

Hooper v. Proctor Health Care Inc.
No. 14-2344 (7^th Cir. Oct. 26, 2015)

The United States Court of Appeals for the Seventh Circuit affirmed a district court’s grant of summary judgment on disability discrimination claims made by a physician, who was hired to work in outpatient clinics. The physician was diagnosed with bipolar disorder and was required to regularly see a psychologist to maintain his medical license in Illinois. After an incident, the physician was given time off and was placed on an immediate paid medical leave of absence. After a psychiatrist determined that the physician could return to work, the employer left messages but the physician did not respond. He was sent a termination notice. The court reasoned that the failure to accommodate claim was meritless because the employer undertook numerous efforts to notify the physician that he was cleared to return to work. Therefore, no reasonable juror could find that the employer acted in a discriminatory manner.

Picard v. Am. Bd. of Fam. Med. — Oct. 2015 (Summary)

CERTIFYING BOARD – FAIR PROCESS

Picard v. Am. Bd. of Fam. Med.
Case No. 13-14552 (E.D. Mich. Oct. 22, 2015)

The United States District Court for the Eastern District of Michigan granted summary judgment to the American Board of Family Medicine (“ABFM”) for claims of violation of due process and defamation made by a physician. The ABFM is a corporate medical specialty board that certifies physicians in the medical specialty of family medicine. Board certification is voluntary; however, it is seen as an indicator of quality and excellence in the practice of family medicine.

The component at issue in this case was professionalism, which requires physicians to maintain a valid, full, and unrestricted medical license. The physician was a recovering drug and alcohol addict, who suffered a relapse. The physician then entered a 90-day residential treatment program, but tested positive for cocaine on a random drug screen. After receiving notice and process, the Michigan Department of Community Health filed an administrative complaint against the physician. This resulted in a summary suspension of the physician’s medical license. Eventually, the physician’s medical license was reinstated and he was placed on probation with monitoring requirements.

Three months later, the ABFM retroactively rescinded the physician’s certification. The physician’s employment was terminated as a result of his inability to gain ABFM certification. The court felt that this decision was not arbitrary or unreasonable because the bases were supported by the evidence and it was substantively rational. Furthermore, the physician was afforded both fair notice and fair procedure during the decertification process, and therefore his procedural rights were not violated.

Baroudi v. Shinseki — Oct. 2015 (Summary)

EMPLOYMENT DISCRIMINATION – NATIONAL ORIGIN, RELIGION, GENDER

Baroudi v. Shinseki
Case No: 8:14-cv-1099-T-30TBM (M.D. Fla. Oct. 20, 2015)

The United States District Court for the Middle District of Florida granted summary judgment to the Department of Veterans Affairs Secretary on claims of retaliation made by a former employed physician. Even though the physician was facing scrutiny for a previously occurring privacy violation, she proceeded to violate the privacy policy a second time by taking photographs of patient records that were left in unsecure locations. She then provided the photographs to the attorney representing her in her discrimination/retaliatory hostile work environment lawsuit against the hospital, in the effort to demonstrate that other employees also violated patients’ privacy but were not treated as harshly. The employer investigated this behavior and placed the physician on a 14-day suspension, which was eventually reduced to a seven-day “paper suspension” with pay.

The physician argued that her actions were part of a “litigation privilege,” which allowed her to violate her employer’s privacy policies, with no consequence. The court was not persuaded by this because it saw that the employer had legitimate, non-discriminatory reasons for suspending the employee and investigating the allegations of privacy breaches. The court also ruled that the employee’s declining performance evaluations and perceived personal animosity were not significant enough to amount to retaliation by the employer.

Nehra v. Rush Univ. Med. Ctr. — Oct. 2015 (Summary)

PHYSICIAN EMPLOYMENT CONTRACTS

Nehra v. Rush Univ. Med. Ctr.
Case No. 14 C 7445 (N.D. Ill. Oct. 20, 2015)

The United States District Court for the Northern District of Illinois granted in part and denied in part a university’s motion for partial summary judgment on a claim for breach of contract made by a urologist. The urologist was hired by the university and signed a Faculty Employment Agreement (“FEA”), which conferred the status of faculty member with the title of professor. The agreement permitted the urologist’s termination either by mutual agreement or for cause.

One year later, the urologist was appointed to the position of Chairperson of the Department of Urology, the details of which were set forth in an offer letter. The offer letter, which provided for a five-year appointment term, stated that the FEA would continue to be in effect with an amended effort allocation section to reflect his new duties. Importantly, the offer letter was silent on termination. Within the next year, the university removed the urologist from the position of Chairperson and notified him that his clinical privileges would cease shortly thereafter, at which point, the urologist sued, alleging breach of contract. Four months later, the university notified him that it would not renew his FEA when it expired and that he was being placed on administrative leave.

The parties disputed how the urologist’s FEA and the offer letter interrelated when it came to termination or non-renewal. The offer letter did not say anything about whether or why Rush could terminate the urologist from the department chairperson position. The court ruled that it could not resolve the dispute at this stage, given multiple ambiguities and because extrinsic evidence and discovery could help fully resolve the issue. However, the court did grant summary judgment on two issues relating to recoverable damages. First, the court held that the urologist could not recover damages for breach of contract that extend beyond the date of the trial. Second, the urologist could not recover damages for loss of reputation even if he prevailed on his breach of contract claim.

Scates v. Shenandoah Mem’l Hosp. — Oct. 2015 (Summary)

FALSE CLAIMS ACT

Scates v. Shenandoah Mem’l Hosp.
No. 5:15-cv-00032 (W.D. Va. Oct. 19, 2015)

An ultrasound technician at a hospital filed a complaint against her former employer for terminating her employment in retaliation for her complaints about allegedly false billing practices for ultrasound exams. The ultrasound technician reported to her supervisor that there was an inconsistency between the hospital’s ultrasound practices and the number of ultrasound photos required by the Current Procedural Terminology (“CPT”) codes. The technician complainant also reported concerns about a fellow employee to the hospital and the hospital told her that it would take no action against the employee because it would seem retaliatory. The hospital’s reasoning was related to prior complaints that the accused employee had made against the complainant technician in the past.

In responding to the hospital’s motion to dismiss, the court held that to proceed with the claims, the complainant had to allege sufficient facts to raise a plausible inference that there was an objectively reasonable possibility that the conversations between her and her employer were in furtherance of a False Claims Act (“FCA”) suit or an effort to stop an FCA violation. The court noted that the complainant “only highlighted ‘inconsistencies’ in billing practices, and never asked the hospital to change its ultrasound policies, objected to these policies, nor mentioned her belief that the hospital’s billing policies might be illegal.”

As such, the court held that the complainant failed to show how the conversations with her employer would have induced fear in the employer of an FCA claim. The court also held that the complainant did not meet any of the three exceptions for wrongful termination claims in the Commonwealth of Virginia, given that she failed to cite any statute that would support her claim, failed to show how her termination was in violation of public policy according to statute, and failed to show how her behavior was a refusal to engage in criminal conduct. Thus, the court dismissed the complainant’s wrongful termination claim with prejudice, but did allow her leave to amend on her FCA retaliation complaint against the hospital.

Southern Baptist Hosp. of Fla., Inc. v. Charles — Oct. 2015 (Summary)

PATIENT SAFETY AND QUALITY IMPROVEMENT ACT

Southern Baptist Hosp. of Fla., Inc. v. Charles
Case No. 1D15-0109 (Fla. Dist. Ct. App. Oct. 28, 2015)

The Florida District Court of Appeal, First Circuit granted a hospital’s petition for certiorari review, quashed the discovery orders of a lower court compelling the production of a hospital’s occurrence reports, and held that the occurrence reports were protected as Patient Safety Work Product under the Patient Safety and Quality Improvement Act (“Patient Safety Act”).

The hospital develops “occurrence reports” of events that are not consistent with the routine operations of the hospital (or care of a patient) or that could result in an injury. These occurrence reports are collected and maintained under the hospital’s Patient Safety Evaluation System and submitted to a Patient Safety Organization, consistent with the process outlined in the Patient Safety Act.

In a medical malpractice action, the plaintiff sought discovery of these reports pursuant to Amendment 7. Amendment 7 was a ballot initiative adopted in 2004 which amended the Florida Constitution and gives individuals “a right to have access to any records made or received in the course of business by a health care facility or provider relating to any adverse medical incident.”

The lower court concluded that the occurrence reports, even though they existed in the protected space of the hospital’s Patient Safety Evaluation System, were not Patient Safety Work Product and, thus, not privileged under the Patient Safety Act because they were created or maintained pursuant to Florida statutory and regulatory requirements. The court of appeal disagreed, finding that the reports were entitled to protection under the Patient Safety Act because they met the statutory definition for Patient Safety Work Product. Specifically, the documents were entitled to protection as Patient Safety Work Product, regardless of whether state law or regulation required their creation and maintenance, because they were placed into the hospital’s Patient Safety Evaluation System, where they remained pending submission to a Patient Safety Organization. The court of appeal also held that Amendment 7 was expressly and impliedly preempted by the Patient Safety Act.

Doe v. Rogers — Oct. 2015 (Summary)

NATIONAL PRACTITIONER DATA BANK

Doe v. Rogers
No. 12-01229 (TFH) (D.D.C. Oct. 9, 2015)

The United States District Court for the District of Columbia granted in part and denied in part a motion to dismiss filed by the Secretary of the Department of Health and Human Services (“HHS”) in a suit brought by a surgeon alleging that the Secretary unlawfully accepted, maintained, and continued to release an inaccurate, fraudulent, and untimely Adverse Action Report that was submitted to the National Practitioner Data Bank (“NPDB”) by the physician’s prior employer. This litigation arose out of an emergency laparoscopic appendectomy in which the surgeon mistakenly removed a segment of a 14-year-old patient’s Fallopian tube. Shortly after, the surgeon “voluntarily suspend[ed]” his surgical privileges and, then, “tendered a short letter of resignation.” Two months later, the hospital submitted a report to the NPDB indicating, among other things, that the surgeon resigned while under investigation.

After unsuccessfully challenging the report with the NPDB, the surgeon brought a suit for damages and declaratory and injunctive relief against HHS, the NPDB, and three NPDB officials. The surgeon asserted a litany of claims, including a claim that the NPDB’s actions regarding the report were unlawful because although it was classified as a “voluntary surrender of clinical privileges, while under, or to avoid, investigation relating to professional competence or conduct,” there was no evidence that an investigation was occurring either before or at the time the surgeon surrendered his surgical privileges and resigned. The court disagreed, referencing the administrative record which contained substantial evidence that an investigation was underway at the time of his resignation.

The court also rejected the surgeon’s argument that an investigation was not commenced because there was no formal request for an investigation by the Credentials Committee, per the medical staff bylaws. The court observed as follows: “Nowhere…does the Health Care Quality Improvement Act, [HHS] regulations implementing the Act, or the NPDB Guidebook state that, to qualify as an ‘investigation’ for the purpose of the mandatory reporting requirements, the Hospital’s actions must be taken in accordance with its own internal bylaws or policies. The reportable event is based on an ‘investigation’ as that term is contemplated by the statute, not as contemplated by a health care entity’s individualized and internal governing documents. To hold otherwise would result in ad hoc reporting and reporting inconsistencies across the multitude of health care entities throughout the nation.”

Similarly, the court dismissed the surgeon’s argument that the NPDB should have rejected the report because it was untimely. According to the court, “[b]ecause the statute imposes a significant sanction for the failure to submit a report – i.e., the potential loss of immunity pursuant to the [Health Care Quality Improvement Act] – the clear message is that Congress intended to compel all reporting required by the statute.” The court also found that the surgeon’s due process rights were not violated by defendants concluding that, among other things, “[t]he harm in this case…is the result of private hospitals responding to information contained in the [NPDB] and not the result of government action that changed [the surgeon’s] [employment or clinical privileges] status.” However, the court remanded to the Secretary the question of whether the statement that “the hospital’s quality assurance review of this matter indicates departures by the physician from standard of care” was reportable.

Shervin v. Partners Healthcare Sys., Inc. — Oct. 2015 (Summary)

GENDER DISCRIMINATION

Shervin v. Partners Healthcare Sys., Inc.
No. 14-1651 (1st Cir. Oct. 9, 2015)

The United States Court of Appeals for the First Circuit affirmed a jury verdict in favor of a healthcare system and others in a suit brought by a female physician claiming gender discrimination and retaliation. The physician was part of the Harvard Combined Orthopedics Residency Program. In her fourth year of her residency, she was put on probation. The probation was imposed after a colleague raised specific patient care issues and expressed concerns about the physician’s professionalism and technical competence. According to the opinion, the program’s director imposed probation without attempting less significant interventions because of the physician’s “stoic response to his concerns” and “in his 35 years of supervising residents, he had never disciplined a woman resident and not seen her cry.” The physician alleged that this incident “marked the beginning of a steady stream of retaliatory and discriminatory acts that clouded the remainder of her residency” and ultimately adversely affected her job prospects.

On appeal, the physician argued, among other things, that the district court erred in calculating the statute of limitations for her discrimination and retaliation claims. The physician contended that her claims did not accrue until the probation hindered her ability to obtain a medical license. The court disagreed, stating that the statute of limitations for a cause of action for discrimination begins “upon the time of the discriminatory acts, not upon the time at which the consequences of the acts [become] most painful.” Further, the physician not only had immediate notice of the adverse effects of the probation but also recognized the gravity of the probation based off of her efforts to reverse it immediately. The court also found that several evidentiary rulings were not improper and that the district court did not abuse its discretion in giving the challenged jury instruction.

Pharm. Research & Mfrs. of Am. v. U.S. Dep’t of Health and Human Servs. — Oct. 2015 (Summary)

340B

Pharm. Research & Mfrs. of Am. v. U.S. Dep’t of Health and Human Servs.
No. 14-1685 (RC) (D.D.C. Oct. 14, 2015)

The United States District Court for the District of Columbia granted a motion for summary judgment filed by Pharmaceutical Research and Manufacturers of America (“PhRMA”) in a suit it filed against the United States Department of Health and Human Services (“HHS”) challenging an interpretive rule issued by HHS regarding the 340B discount drug program.

The 340B program places price caps on the medications that drug manufacturers sell to certain healthcare facilities, including Critical Access Hospitals (“CAHs”). However, a section of the Patient Protection and Affordable Care Act excluded CAHs from having 340B program pricing for medications designated as orphan drugs.

HHS issued an interpretive rule allowing CAHs to have 340B program pricing for an orphan drug when the orphan drug is used for a purpose other than the rare diseases for which it was developed and designated. PhRMA objected to this interpretive rule and moved for summary judgment, arguing that the rule was a final agency action that conflicted with the plain language of the 340B program statute.

The issue before the court was whether the orphan drug exclusion to the 340B program pricing for CAHs applied to any use of the orphan drug or whether the exclusion was limited to when the orphan drug was actually used for the rare disease or condition for which it has been designated.

The court granted PhRMA’s motion for summary judgment, holding that HHS’s interpretive rule was, indeed, a final agency action and that it contravened the plain language of the 340B program statute, which excluded any use of orphan drugs from 340B program pricing.

Shannon v. Testen — Oct. 2015 (Summary)

PEER REVIEW

Shannon v. Testen
No. COA15-64 (N.C. Ct. App. Oct. 6, 2015)

The North Carolina Court of Appeals affirmed the dismissal of an ophthalmologist’s claims that a social worker, a counselor, and a state-sponsored peer review agency breached their statutory duties and violated his statutory due process rights under federal and state peer review statutes. The court held that the ophthalmologist failed to show that any of the defendants acted in bad faith, as well as holding that neither the state nor the federal peer review statutes provided a private cause of action.

The hospital where the ophthalmologist practiced temporarily suspended his privileges and referred him to a psychiatrist and psychologist in response to two incidents at the hospital. After this initial evaluation, the hospital referred the ophthalmologist to a state-sponsored peer review agency. The ophthalmologist met with a social worker and a counselor, both employees of the peer review agency. After meeting, the social worker and counselor both wrote a letter to the state medical board and the hospital recommending that the ophthalmologist immediately receive further professional evaluation. This letter allegedly contained factual errors and omissions regarding the two incidents with the ophthalmologist. In a second letter written a few months later, both repeated their call for the ophthalmologist to receive further evaluation, noting they had received information from the ophthalmologist’s earlier psychiatric evaluations and found the information to be “informative and concerning.” After receiving the second letter, the hospital informed the ophthalmologist that his privileges would not be reinstated. Also, the ophthalmologist surrendered his medical license to the state medical board.

The court held the ophthalmologist had failed to show the defendants acted in bad faith by allegedly failing to include certain facts and interview certain witnesses, noting that such actions were more akin to carelessness, not “willfulness” required for a showing of bad faith. The court also held that neither the Health Care Quality Improvement Act nor the state peer review statute provided the ophthalmologist with a private cause of action. The court also noted that even if the state peer review statute did give the ophthalmologist a private cause of action, the memorandum of understanding between the hospital and the state medical board indicated the activities of the peer review agency would be carried out “in accordance with due process,” thereby satisfying their statutory obligation.