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.

Hessein v. Am. Bd. of Anesthesiology, Inc. — Oct. 2015 (Summary)

DUE PROCESS

Hessein v. Am. Bd. of Anesthesiology, Inc.
No. 15-2249 (3d Cir. Oct. 7, 2015)

The United States Court of Appeals for the Third Circuit affirmed summary judgment against an anesthesiologist who brought violation of due process claims, Sherman and Clayton Act claims, and state law claims of defamation, tortious interference with contract, and breach of contract against the American Board of Anesthesiology (“Board”) and two of its members.

The anesthesiologist had his license temporarily suspended in two states as a result of an indictment for conspiracy, theft by deception, and numerous counts of health insurance fraud. The Board then revoked his certifications in anesthesiology and pain management.

The court held that the violation of due process claims must fail because the Board was a private association, not a state actor. The court also rejected the anesthesiologist’s claim that the Board and state medical boards conspired to disrupt his practice and revoke his certifications, noting those decisions were independent actions of each entity. The court further rejected the argument that the Board had a monopoly on the specialties of the anesthesiologist, stating the anesthesiologist was not seeking to end the anti-competitive behavior; he was seeking to join it. Lastly, with regard to the anesthesiologist’s state law claims, the court held the Board applied its rules and regulations regarding the revocation of the anesthesiologist’s certification fairly and in good faith. The court found that the Board breached no duty of care owed to the anesthesiologist, breached no contract with him, and did not defame him by posting on the Board’s website that the anesthesiologist’s certifications had been revoked.

Schindler v. Reg’l Health Physicians, Inc. – Sept. 2015 (Summary)

BREACH OF CONTRACT

Schindler v. Reg’l Health Physicians, Inc., No. CIV. 13-5027-JLV (D.S.D. Sept. 23, 2015)

The United States District Court for the District of South Dakota granted partial summary judgment to defendant hospital on breach of contract claims made by a neurosurgeon.

When the neurosurgeon began to experience health problems, the hospital provided a number of measures to accommodate him while he worked. However, eventually, the hospital notified the neurosurgeon that it planned to suspend his surgical privileges to perform elective instrumental cervical and lumbar fusion procedures except those procedures in an emergency situation. The neurosurgeon took a voluntary leave of absence in lieu of the suspension. The hospital terminated the physician immediately “for cause,” due to a failure to maintain medical staff privileges necessary to perform surgery at the hospital, without notice and a period to cure.

The neurosurgeon filed a breach of contract action, based on lack of notice and opportunity to cure, among other things. The court ruled that the hospital was not obligated to give the neurosurgeon notice that he breached his employment contract and a 30-day right to cure, ruling that the voluntary leave of absence constituted a suspension or loss of appointment and privileges, which was subject to the “for cause” immediate termination under the employment agreement, with no notice or opportunity to cure.

Grenier v. Stamford Hosp. – Sept. 2015 (Summary)

EMTALA

Grenier v. Stamford Hosp., Civil Action No. 3:14-cv-0970 (VLB) (D. Conn. Sept. 29, 2015)

The United States District Court for the District of Connecticut denied a hospital’s motion to dismiss failure to screen and failure to stabilize claims, under EMTALA.

A patient was brought to a hospital’s emergency department and was heavily intoxicated. Later, she was discharged after she sobered up. Minutes later, she was readmitted because the staff noticed she was stumbling and walking with an unsteady gait. The patient continued to have difficulty speaking and walking, however no diagnostic tests or treatments were administered. Eventually, it was discovered that the patient had a stroke, but by the time it was diagnosed she could not be revived.

The court did not dismiss the failure to screen claim because it fairly alleged that the various testing and screening done by the hospital deviated from the type of examination normally performed. Also, the court did not dismiss the failure to stabilize claim because there were stark differences between the medical entries claiming she was alert and observations stating she was stumbling.

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.