Arapahoe Surgery Ctr., LLC v. Cigna Healthcare, Inc. (Summary)

ANTITRUST

Arapahoe Surgery Ctr., LLC v. Cigna Healthcare, Inc., No. 13-cv-3422-WJM-CBS (D. Colo. Feb. 20, 2015)

The United States District Court for the District of Colorado denied a motion to dismiss filed by several health insurers in an antitrust suit brought against them by a number of surgery centers. The surgery centers’ suit alleged that the insurers conspired with hospitals and others to restrain trade in violation of the Sherman Act and Colorado’s Antitrust Act. According to the complaint, the insurers joined a conspiracy with two hospitals to compel physicians not to refer patients to the surgery centers by threatening, and acting on these threats, to terminate the referring physicians’ contracts with the insurers.

The insurers filed a motion to dismiss the surgery centers’ Sherman Act and state law antitrust claims.      The court denied the motion, finding that the surgery centers adequately pled an agreement between the insurers and the hospitals, as well as conduct in furtherance of such agreement to demonstrate unlawful conspiracy under federal and state antitrust law. Further, the court concluded that the allegations in the surgery centers’ complaint were sufficient to show that the insurers’ agreement with the hospitals constituted a group boycott that may be considered per se illegal under Section 1 of the Sherman Act.

N.C. State Bd. of Dental Exam’rs v. F.T.C. (Summary)

ANTITRUST – STATE-ACTION IMMUNITY DOCTRINE

N.C. State Bd. of Dental Exam’rs v. F.T.C., No. 13-534 (U.S. Feb. 25, 2015)

The United States Supreme Court affirmed a decision by the United States Court of Appeals for the Fourth Circuit, holding that the North Carolina Board of Dental Examiners (“Board”) was not entitled to immunity from federal antitrust laws under the state-action immunity doctrine for the Board’s attempts to prevent non-dentists from offering teeth whitening services in the state.

Specifically, the Board had issued at least 47 cease-and-desist letters to various non-dentist teeth whitening service providers and product manufacturers. It justified this by arguing that teeth whitening is equivalent to “the practice of dentistry” for legal purposes, and that the unlicensed practice of dentistry is a crime.

The Federal Trade Commission (“FTC”) challenged these actions by filing an administrative complaint against the Board. The FTC claimed that the Board’s activities violated the federal antitrust laws. The Board asserted the state-action immunity doctrine, which permits state actors to engage in anticompetitive conduct under certain limited circumstances.

After a long series of appeals, the dispute between the Board and the FTC eventually reached the Supreme Court. The Court sided with the FTC, explaining that limits on state-action immunity are most important in circumstances where the Board has delegated regulatory power to active market participants. The Court illustrated its point by noting that eight of the ten members of the Board had themselves offered teeth whitening services at some time in the past. Because of this, the Court warned that market participants might be susceptible to hidden dual allegiances that affect their judgment.

Because a controlling number of Board members were active market participants with this kind of dual allegiance, the Court explained that the Board would only receive immunity if it acted under the active supervision of the state. The Board could not show that this active supervision requirement had been met. Therefore, it was not immune to the FTC’s antitrust challenge.

U.S. ex rel. Whipple v. Chattanooga-Hamilton Cnty. Hosp. Auth. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Whipple v. Chattanooga-Hamilton Cnty. Hosp. Auth., No. 13-6645 (6th Cir. Feb. 25, 2015)

The United States Court of Appeals for the Sixth Circuit reversed and remanded the lower court’s grant of summary judgment to a hospital in a False Claims Act suit brought against it, finding that the relator’s claims were not barred under the False Claims Act “public disclosure” rule.

The relator, a former “Revenue Cycle Consultant” and “Interim Director of Care Management” at the hospital, alleged that he had direct knowledge that the hospital was submitting fraudulent claims for reimbursement for, among other things, “inpatient care for patients who should have been billed on an outpatient or observation basis (short-stay claims).” The hospital argued that the relator’s claims were barred by the “public disclosure” bar of the False Claims Act, which precludes False Claims Act claims which have been previously publicly disclosed. Specifically, the hospital contended that the information underlying the relator’s claims was already disclosed to the government and others during an audit and investigation by the government into concerns that the hospital had improperly billed Medicare for inpatient admissions.

The lower court granted the hospital’s motion for summary judgment, but the Sixth Circuit reversed the lower court’s decision because the information garnered in the audit was only disclosed privately, and was not circulated to those not participating in the administrative audit or investigation. Similarly, the results of the internal investigation were submitted to the government but were not released into the public domain. Accordingly, the “public disclosure” bar did not apply.

Hunt v. Macon Orthopaedic & Hand Ctr., P.A. (Summary)

INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

Hunt v. Macon Orthopaedic & Hand Ctr., P.A., Civil Action No. 5:14–CV–298 (MTT) (M.D. Ga. Feb. 17, 2015)

The U.S. District Court for the Middle District of Georgia denied a physician’s motion to dismiss a lawsuit for intentional infliction of emotional distress. The lawsuit was filed by a physician’s assistant who had formerly worked at the physician’s orthopedic clinic.

The physician’s assistant alleged that the physician had subjected her to harassment and verbal abuse for a period of three years. Specifically, she claimed that he regularly demeaned her in front of other employees, treated her less favorably than male employees, and had threatened to terminate her when she missed work to go to a previously scheduled and approved doctor’s appointment. When she eventually complained about this behavior to the clinic’s CEO, she was terminated a month later.

In its opinion, the court explained that a claim for intentional infliction of emotional distress generally requires the conduct at issue to be “extreme and outrageous.” The standard that courts use to assess this is to ask whether an average member of the community would find the behavior so egregious as to say, “Outrageous!” In this case, the court concluded that the incidents cited by the physician’s assistant were not extreme in isolation. However, it determined that these incidents, when viewed with the larger pattern of behavior, illustrated conduct that could potentially be seen as outrageous. It therefore denied the physician’s motion to dismiss the lawsuit.

Sood v. Graham (Summary)

EXHAUSTION OF ADMINISTRATIVE REMEDIES

Sood v. Graham, No. 13-1911 (Iowa Ct. App. Feb. 11, 2015)

The Court of Appeals of Iowa reversed and remanded a lower court’s ruling that the director of nuclear medicine at a university medical school violated another physician’s due process rights by revoking the physician’s clinical privileges at a university-affiliated hospital.

On appeal, the director argued that the due process claim against him was not legally valid because, among other things, the physician failed to exhaust the administrative remedies available to him.

The court agreed with the director, explaining that state employees generally must exhaust other state remedies before bringing a claim for deprivation of due process. In this case, the court noted that the physician had the opportunity to take advantage of post-termination procedures under the hospital’s bylaws and under the university’s operations manual. These procedures included a right to appeal to the board of regents and to petition later for judicial review. Since the physician never invoked any of the post-deprivation administrative procedures, he had failed to exhaust his other state remedies and his due process claim was held to be invalid. Also, since the physician had access to this post-termination process, it was not necessary for the hospital to afford him an elaborate pre-termination process.

Romney v. Franciscan Med. Grp. (Summary)

EMPLOYMENT AGREEMENT

Romney v. Franciscan Med. Grp., No. 71625-5-I (Wash. Ct. App. Feb. 17, 2015)

The Court of Appeals of Washington upheld an arbitration provision in an employment contract between a defendant medical group and its former employees.

The medical group entered into employment contracts with three individuals, which included an agreement to arbitrate all employment-related disputes between the parties. The employees brought claims of wage violations on behalf of themselves and a class of physicians, medical assistants and nurse practitioners, and at the same time requested that the court find the arbitration provision unconscionable. The medical group moved to compel arbitration, but the trial court found that the contract was unconscionable and invalid.

The appellate court reversed and remanded the trial court’s opinion, determining that the arbitration provision should be upheld even if other specific provisions of the employment agreement are found to be unconscionable. The court found that while other unconscionable provisions may be severed from an employment contract, those provisions should not affect the underlying arbitration provision. Also, the arbitration provision itself was found not to be procedurally or substantively unconscionable, because the terms were not one-sided. The court further determined that in a class action suit such as this, the arbitration provisions can be imposed on class members who did not sign the agreement.

Ducharme v. Nova Cas. Co. (Summary)

DISCOVERY/PEER REVIEW

Ducharme v. Nova Cas. Co., Civil Action No. 6:13-3108 (W.D. La. Feb. 10, 2015)

The United States District Court for the Western District of Louisiana quashed an insurance company’s subpoena against a hospital, holding that the information sought was protected by the peer review privilege.

Plaintiff was hit by a car insured by the defendant, an insurance company. The insurance company subpoenaed the hospital inquiring about the plaintiff’s treating physician’s disciplinary record. The hospital objected to the subpoena and moved to quash it.

The court held that the disciplinary record of the physician was protected by the peer review privilege because the information requested was within the ambit of the hospital’s personnel committee, had nothing to do with plaintiff’s personal injury claims and the insurance company was only seeking this information so it could impeach the treating physician if he testified at trial.

Quinones v. Univ. of Puerto Rico (Summary)

AMERICANS WITH DISABILITIES ACT

Quinones v. Univ. of Puerto Rico, Civil No. 14-1331 (JAG) (D. P.R. Feb. 13, 2015)

The U.S. District Court for the District of Puerto Rico granted in part and reversed in part a medical school’s motion to dismiss claims brought by a resident who was terminated from its residency program due to her addiction to and illegal use of prescription drugs.

The resident was released from an alcohol rehabilitation program shortly before her enrollment in the residency program. However, after enrollment, the resident began abusing the prescription drugs Soma, Ambien, and Adderall which caused her to have problems complying with the program’s requirements. The resident met with the program committee several times to discuss her addiction and performance, and after being terminated from the program, she was granted a hearing, after which her request for permanent reinstatement was rejected. The resident then filed complaints of retaliation and disability discrimination under the Americans with Disabilities Act (“ADA”) and the Federal Rehabilitation Act (“Rehabilitation Act”).

The court held that the resident did not qualify as disabled under the ADA because she was currently engaged in the illegal use of drugs. Although the ADA offers protection for those who are in recovery for a significant period of time, the court determined that being drug-free for three months is not enough time to be classified as a rehabilitated drug user. The court also stated that the resident could not be disabled under the ADA because she was still using the drugs illegally at the time of her termination. Further, the court held that, even if the resident were to qualify as a disabled individual, she still would not meet the requirements for protection under the ADA because her drug use would have rendered her unqualified to perform the functions of her job as a resident. Finally, the court held that since the resident failed to qualify under the ADA, her claim under the Rehabilitation Act also failed.

On the retaliation claim, the court found that the resident had alleged sufficient facts to support the claim that the medical school retaliated against her by denying her reinstatement into the program and permanently terminating her. The court found the proximity between her conduct and the adverse employment action to be “sufficient to establish a causal link at this preliminary stage.”

Willis v. UPMC Children’s Hosp. of Pittsburgh (Summary)

AGE DISCRIMINATION

Willis v. UPMC Children’s Hosp. of Pittsburgh, Civil Action No. 13-131 (W.D. Pa. Feb. 10, 2015)

The United States District Court for the Western District of Pennsylvania dismissed a nurse’s claim under the Age Discrimination in Employment Act (“ADEA”) against a hospital holding that the nurse failed to establish that she was the victim of intentional discrimination.

Plaintiff, a 61-year-old nurse, was employed at defendant hospital and within a five-month period was written up three times for cursing around a patient and his family, confronting the leadership staff, and leaving a shift without completing a patient’s history and physical. The nurse was terminated after the last incident and brought a claim under the ADEA.

The court stated that the nurse proved that she was at least 40 years old, suffered an adverse employment decision and was qualified for the position, thus satisfying three of the four elements for a case of prima facie discrimination. Therefore, the sole dispute was whether she satisfied the forth element – can an inference of discrimination be made because younger employees replaced the nurse.

The court held that the nurse did not satisfy the fourth element because there was no evidence in the record regarding the ages of the new employees, or whether the employees assumed the duties of the nurse. The court also found that the fourth element was not satisfied because requiring her to prove that she was replaced by a younger employee “eliminates no common, lawful reasons for her discharge and is not necessarily inconsistent with [her] ultimate burden of showing she suffered intentional discrimination because of her age.” Thus, the court concluded that the nurse did not put forth evidence that would permit an inference of intentional discrimination.

Also, the court stated that even if the nurse did establish a prima facie case of age discrimination, the hospital terminated her for legitimate nondiscriminatory reasons, and there was no indication that these reasons were pretextural. Therefore, although the nurse mentioned that she intended to retire at 65, the court stated that it was not an unusual employment practice to ask an employee how long he or she intends to work, and that it might be prudent for future staffing needs, given the large turnover experienced by the nursing staff at the hospital.

Jackson v. Mercy Behavioral Health (Summary)

HIPAA – NO PRIVATE RIGHT OF ACTION

Jackson v. Mercy Behavioral Health, Civil No. 14-1000 (W.D. Pa. Jan. 28, 2015)

The U.S. District Court for the Western District of Pennsylvania granted a hospital’s motion to dismiss a patient’s claims that her civil rights were violated under HIPAA.

A patient was receiving treatment at a hospital and was placed into a 30-day residential diversion program. During that time, the patient’s medical records were sent to her dentist without her consent. A hospital employee then told the patient to sign an after-the-fact consent for the release of records, saying that failure to do so would result in early discharge from the residential program. The patient refused to sign the release, and was discharged from the program three days early. She then alleged that the hospital violated HIPAA and engaged in unlawful retaliation when she did not sign the after-the-fact consent.

The court dismissed the patient’s claims, finding that the court lacked subject matter jurisdiction over the action because HIPAA violations are within the jurisdiction of the Department of Health and Human Services and the Department of Justice’s Office of Civil Rights. Additionally, the court held that the patient did not have a claim upon which a relief could be granted, as HIPAA does not provide a private cause of action on individuals.