S. Health Corp. of Hous. v. Crausby – May 2015 (Summary)

TORTIOUS INTERFERENCE

S. Health Corp. of Hous. v. Crausby, No. 2014-CA-00603-COA (Miss. Ct. App. May 26, 2015)

The Court of Appeals of the State of Mississippi reversed a jury’s finding that a hospital and its administrators conspired to tortiously interfere with an emergency room nurse’s employment relationship by acquiescing to the demand of the chief of staff that the nurse be fired. However, the court affirmed the jury’s finding that the chief of staff slandered the nurse by making false allegations against her to hospital administrators.

The court held no conspiracy existed because firing the nurse was not an unlawful purpose, nor was it a lawful purpose accomplished by unlawful means. In affirming the jury’s finding that the chief of staff slandered the nurse, the court rejected his argument that the comments he made to the administrators about the nurse were protected by a qualified privilege. Although the court found that the chief of staff was commenting on the emergency room in which he occasionally worked, the court held the jury was entitled to believe that his comments were made with malice, sufficient to overcome the qualified privilege.

Stern v. St. Anthony’s Health Ctr. – June 2015 (Summary)

AMERICANS WITH DISABILITIES ACT – REASONABLE ACCOMMODATION

Stern v. St. Anthony’s Health Ctr., No. 14-2400 (7th Cir. June 4, 2015)

The United States Court of Appeals for the Seventh Circuit affirmed a district court’s grant of summary judgment to defendant health center, which terminated its Chief Psychologist due to short-term memory deficiencies that rendered the psychologist unfit for duty. The psychologist sued the health center under the Americans with Disabilities Act (“ADA”), claiming that the health center failed to engage with him in an interactive process to find reasonable accommodations that would permit him to continue his employment. The health center argued that the reasonable accommodations suggested by the psychologist were contingent upon eliminating essential functions of the Chief Psychologist position, which is not something that is required by the ADA. The court agreed with the health center, noting that even though job restructuring can be required as a reasonable accommodation, it is typically done for duties that take up less than five percent of a person’s work time. Here, the responsibilities that the psychologist wanted to have eliminated from his job duties were supervisory and administrative and took up anywhere from 45 to 80 percent of the Chief Psychologist’s time.

Farnsworth v. HCA, Inc. – May 2015 (Summary)

FALSE CLAIMS ACT – RETALIATION

Farnsworth v. HCA, Inc., No. 8:15-cv-65-T-24-MAP (M.D. Fla. May 29, 2015)

The United States District Court for the Middle District of Florida dismissed a retaliation claim brought by a Vice President of Quality and Risk Management (the “VP”) under the False Claims Act after she was placed on administrative leave for insubordination and was never allowed to return to work. She alleged that she was departed not because of insubordination but, rather, because during her five-month tenure with the organization, she uncovered a number of compliance failures on the part of the hospital that employed her and reported many of those failures to surveyors and government agencies. Many of the compliance failures, she alleged, constituted violations of the False Claims Act because they resulted in improper bills to Medicare and Medicaid.

The court recited the many compliance issues alleged by the VP, including but not limited to: that the hospital’s medical records personnel were actually employed through a third party rather than through the hospital itself, that medical records were improperly altered, that residents performed treatment without appropriate supervision by physicians, that research was conducted without full MEC and Board approval, and that an incident of sexual abuse at the hospital was not promptly reported to the state. Having recited the allegations, the court noted that while the alleged activities of the hospital may be “bad acts or practices,” in many cases the VP did not allege that she tried to do anything to stop those practices or report them to her supervisors so that they could correct them. For the few activities she did report, and for which she alleged she suffered retaliation, she failed to assert a sufficient connection to a bill that was submitted to Medicare or Medicaid. Having found the VP’s allegations to be largely “extraneous, irrelevant, and inflammatory allegations that have no bearing on her FCA claim,” the court dismissed the lawsuit, granting the VP leave to amend her complaint to focus on those instances in which she reported a billing violation to her supervisors.

Nahas v. Shore Med. Ctr. – May 2015 (Summary)

PROFESSIONAL REVIEW ACTION DISPUTE

Nahas v. Shore Med. Ctr., Civil No. 13-6537 (RBK/AMD) (D.N.J. May 29, 2015)

The United States District Court for the District of New Jersey granted in part and denied in part a surgeon’s motion requesting permission to amend his complaint, which alleged unlawful activity by a medical center and several of its physician leaders with respect to their refusal to reinstate, and subsequent suspension of, the surgeon’s clinical privileges. The court had dismissed the surgeon’s original, 50-page complaint in full on the basis that it failed to state a claim upon which relief could be granted. Subsequently, the surgeon amended the complaint, expanding it to fill 127 pages by detailing additional facts, removing a few claims, and adding several new legal theories pursuant to which he seeks relief. The surgeon also took the opportunity to name additional defendants, including the Medical Executive Committee. The medical center and other defendants opposed the surgeon’s motion to amend the complaint, on the basis of futility.

In reaching its decision to allow some of the surgeon’s claims to move forward, while dismissing others on the basis that they fail to state a claim, the court made a few interesting findings. First, it held that the surgeon’s Section 1, Sherman Act claim was pled sufficiently to survive dismissal – even if it was not yet clear that he would be able to prove his claims at trial. In that claim, the surgeon alleged that the members of the MEC acted in concert to adopt new criteria that would bar the surgeon from “restoring” his privileges. It dismissed the Section 2, Sherman Act claim, however, noting that the surgeon failed to plead sufficient allegations of intent by the parties to monopolize a relevant market.

The court also allowed the surgeon’s claim for racial discrimination to survive dismissal, noting several allegations of the surgeon: First, that other, similarly-situated but non-Arab physicians were allowed to resume their privileges after a period of absence, while under the supervision of a proctor – but that he was not given the same allowance. Second, the court observed that the medical center and its physician leaders may have departed so significantly from their normal procedures that their course of action is evidence of an impermissible purpose.

Finally, the court noted that New Jersey law allows surgeons to state a claim for judicial review of private hospitals’ decisions to deny staff privileges. Accordingly, the court will entertain the surgeon’s claim that the medical center denied the surgeon’s privileges in an arbitrary and capricious manner that violated his right to fundamental fairness.

Colo. Med. Soc’y v. Hickenlooper – June 2015 (Summary)

SUPERVISION OF CRNA SERVICES

Colo. Med. Soc’y v. Hickenlooper, Supreme Court Case No. 12SC671 (Colo. June 1, 2015)

The Supreme Court of Colorado affirmed the dismissal of a lawsuit brought by the Colorado Medical Society and Colorado Society of Anesthesiologists, both of which were challenging the governor’s decision to opt out of the requirement, under federal regulations, that hospitals, critical access hospitals, and ambulatory surgery centers may bill Medicare for anesthesia provided by CRNAs only if those CRNAs are supervised by a physician. While the court held that the medical associations did have standing, it found that they failed to state a claim. Notably, the court clarified that the governor’s decision to opt out of the federal regulations’ requirement for CRNA supervision did not constitute an interpretation of Colorado law governing the supervision of CRNAs (a matter which was disputed by the medical associations and governor).

Baker v. Banner Health – May 2015 (Summary)

FALSE CLAIMS ACT/NONPHYSICIAN SUPERVISION OF RADIOLOGY SERVICES

Baker v. Banner Health, Civil Action No. 12-cv-3029-WJM-CBS (D. Colo. May 28, 2015)

The United States District Court for the District of Colorado granted a qui tam relator’s motion for partial summary judgment in a lawsuit she brought alleging violation of the False Claims Act by a medical center and its medical group, on the basis that they inappropriately billed Medicare for external beam radiation therapy despite having no qualified physician on the premises. The medical center argued that it could provide Medicare-reimbursable radiation therapy in the absence of a specialized physician as long as an advanced practice nurse (“APN”) supervised the procedure. The relator argued, on the other hand, that federal regulations allow “direct supervision” to be done by a non-physician practitioner only if the non-physician practitioner may “personally furnish” the relevant service in accordance with state law. In this case, the court noted that Colorado regulations do not permit non-physician practitioners to personally furnish radiation therapy services. Accordingly, the medical center was not permitted to bill Medicare for radiation therapy services provided without the presence of a specialized physician. The court noted that its decision did not resolve the question of intent, a matter which must also be considered in determining liability under the False Claims Act.

In re Mem’l Hermann Hosp. Sys. – May 2015 (Summary)

PEER REVIEW PRIVILEGE

In re Mem’l Hermann Hosp. Sys., No. 14-0171 (Tex. May 22, 2015)

The Supreme Court of Texas ordered a hospital to turn over certain protected peer review documents to a physician who was suing the hospital alleging a number of anti-competitive actions.

The documents were requested by a cardiothoracic surgeon who had resigned from the medical staff of the hospital and sued, claiming restraint of trade, disparagement, tortious interference with prospective business relations, and defamation. According to the surgeon, who had pioneered “off-pump” and robotic-assisted heart surgeries at the hospital, administration engaged in a “whisper campaign” to destroy his professional reputation after it became known that he also intended to practice at the newly opened competing hospital in town. The surgeon alleged that representatives of the hospital spread rumors about his mortality rate, ceased all promotion and marketing of his practice, and presented manipulated data of his mortality rate to his cardiology colleagues, upon whom he relied for referrals. The campaign culminated with the CEO of the hospital system publicly ridiculing the surgeon, stating the surgeon was targeted for his “affiliation” with the rival hospital system and the destruction of the surgeon’s reputation was a “preemptive warning” to other physicians.

The Texas Supreme Court held that while the state peer review privilege was applicable to the documents requested, the anticompetitive exception to the peer review privilege, which limits the provision of confidentiality under the privilege, applied to a number of the documents that had been requested. Specifically, the court determined that documents containing data on mortality rates of other cardiovascular surgeons, physician volume, plans to review mortality data, references to appropriate parameters for calculating mortality data, and maps identifying the locations of physicians and hospitals in the geographic area were not privileged because they were considered relevant to anticompetitive actions pleaded by the surgeon.

Lai v. Gottlieb Mem’l Hosp. – May 2015 (Summary)

NATIONAL PRACTITIONER DATA BANK

Lai v. Gottlieb Mem’l Hosp., No. 1-14-2319 (Ill. App. Ct. May 22, 2015)

The Appellate Court of Illinois affirmed a lower decision denying a physician’s request for an injunction against a hospital seeking to prevent the hospital from filing a report with the National Practitioner Data Bank (“NPDB”).

The litigation arose out of the hospital’s summary suspension of the physician’s surgical privileges which was based on complications that a patient experienced. Shortly after the hospital’s medical executive committee voted to uphold the suspension and terminate the physician’s privileges, the physician resigned from the medical staff. The hospital informed the physician that because he did not request a hearing of the summary suspension, two reports would be filed with the NPDB, one related to the summary suspension action which became final when he did not request a hearing and one related to his resignation because it occurred while he was under investigation. The physician’s request for the injunction sought to enjoin the hospital from filing either report based on his argument that the summary suspension process did not comply with state law.

The trial court held that the physician’s resignation while under investigation was a separate and distinct matter from the summary suspension and that the hospital was required to report that resignation whether or not appropriate procedures that complied with state and federal law had been followed for the summary suspension action. The appellate court agreed, noting that the reporting of a physician’s surrender of privileges during an investigation is a separate and distinct legal question from a hospital’s authority to report a summary suspension after a physician has had an opportunity to exercise his or her due process rights. Here, the physician’s due process rights were not violated because the hospital agreed not to report the physician’s summary suspension to the NPDB until defendant exercised the proper procedures.

Brandner v. Bateman – May 2015 (Summary)

IMMUNITY – PHYSICIAN ACTION

Brandner v. Bateman, No. S–15513 (Alaska May 15, 2015)

The Supreme Court of Alaska affirmed a lower court’s ruling granting summary judgment to several doctors who had been sued by one of their colleagues. The lawsuit arose after a hospital terminated a physician’s privileges over a violation of hospital policy.

The physician had come under scrutiny during 2010, when the Alaska State Medical Board received a report that he had threatened an employee in the governor’s office over a child support matter. The Medical Board ordered the physician to submit to psychiatric and medical evaluations in order to assess his ability to practice medicine. These evaluations confirmed that the physician was fit to practice and the investigation was resolved.

Then, in early 2011, the physician allegedly made a series of strange, “disjointed” statements at an executive committee meeting, raising concerns at the hospital over his ability to practice. When the executive committee ordered him to undergo psychiatric evaluation, he explained that he had recently had one and had been found fit to practice. The hospital reviewed the records of this evaluation and discovered the involvement of the Medical Board.

Under hospital policy, the physician was required to report any condition the Medical Board placed on his ability to practice. The executive committee determined that requiring the physician to submit to a psychiatric evaluation placed a condition on his ability to practice medicine, and therefore voted to terminate the physician’s hospital privileges over his failure to report. After an unsuccessful appeal to the hospital’s fair hearing panel, the physician filed this lawsuit. He sued not only the hospital, but also the doctors on the executive committee, the hearing panel, and the witnesses who testified at the hearing.

On appeal, the Alaska Supreme Court held that the individual doctors were immune to the lawsuit. It found that the doctors had made reasonable efforts to ascertain the facts upon which their recommendations were based, had acted in the reasonable belief that their recommendations were warranted, and had acted in a manner not motivated by malice. It emphasized the key point that the executive committee and hearing panel had relied on a reasonable reading of hospital policy and had imposed a corresponding sanction. Consequently, even if the sanction seemed unduly harsh (as the plaintiff-physician argued on appeal), the panel did not act inappropriately in terminating his privileges. The court affirmed the entry of summary judgment on all of the physician’s claims against the individual doctors.

Mohan v. Orlando Health, Inc. – May 2015 (Summary)

NEGLIGENT CREDENTIALING

Mohan v. Orlando Health, Inc., No. 5D13–3869 (Fla. Dist. Ct. App. May 15, 2015)

The Fifth District Court of Appeal of Florida reversed a trial court’s ruling dismissing a patient’s negligent credentialing claims against a hospital. These claims arose out of a medical malpractice lawsuit alleging that a physician had mistakenly removed a patient’s ureter instead of his appendix.

Although the operation took place at South Lake Hospital (“South Lake”), the patient had sued Orlando Health for negligent credentialing, arguing that Orlando Health was liable because it had assumed control of governance at South Lake. Orlando Health denied this charge and argued that South Lake was solely responsible for all decisions related to its medical staff and credentialing.

The court found that the contract between Orlando Health and South Lake did not conclusively establish that South Lake was solely responsible for its credentialing decisions. It highlighted certain contractual provisions that required South Lake to consult with Orlando Health in determining the qualifications and duties of its personnel and noted that Orlando Health was responsible for day-to-day operational management of the hospital.

In addition, the court explained that Orlando Health could be liable to the patient based on its business relationships with South Lake and with South Lake’s CEO and board members. Specifically, the court ruled that Orlando Health could be liable to the patient based on its partnership/joint venture affiliation with South Lake and ruled that Orlando Health might be vicariously liable for the actions of the CEO and the board members, since it had an employment relationship with these individuals. The case has been remanded to the lower court for further proceedings.