Jamaleddin v. Oakland Physicians Med. Ctr. (Summary)

DISCRIMINATION/ BREACH OF CONTRACT

Jamaleddin v. Oakland Physicians Med. Ctr., No. 13–cv–12735 (E.D. Mich. Jan. 12, 2015)

The United States District Court for the Eastern District of Michigan granted a hospital’s motion for summary judgment against a resident’s claim of retaliatory harassment, while denying its motion for summary judgment against the resident’s claims of national origin discrimination and breach of contract.

The resident, who was of Arabic descent, had executed a “residency agreement” with the hospital and accepted appointment as a first year resident in family medicine. The resident received several warnings about his professionalism and his communication skills. In his lawsuit, the resident argued that these warnings were rooted in discriminatory motives. He alleged that one of his direct supervisors had told him to “give up [his] Arabic mentality” and had made jokes about whether the resident was using “Arabic time.”

The resident decided to tell another supervisor that he believed he was being discriminated against because of his Arabic descent. That same evening, the resident asked another physician to complete a patient history for him so that he did not have to stay overtime. The hospital discovered this and then fired the resident a week later. According to the resident, the hospital then forced him to sign a resignation form instead of appealing the decision, threatening him that he would “end up nowhere” unless he complied.

The court ruled in favor of the hospital on the retaliation claim, finding that although the resident alleged that he was fired just a week after complaining about discrimination to his supervisor, there was insufficient proof of a causal connection between the two events. However, the court ruled against the hospital on the discrimination claim, noting that even though the hospital had warned him about a lack of professionalism and deficient interpersonal skills, the resident had immediately corrected many of the flaws after he learned about them. In addition, the resident had shown that several of his supervisors gave him positive performance evaluations in the past, undercutting their argument that he was a problem employee. The court also ruled against the hospital on the breach of contract claim, because the residency agreement itself included a clause preventing discrimination on the basis of national origin.

Thorton v. Md. Gen. Hosp. (Summary)

VICARIOUS LIABILITY

Thorton v. Md. Gen. Hosp., Civil Action No. WMN-13-162 (D. Md. Jan. 7, 2015)

The United States District Court for the District of Maryland denied a defendant hospital’s motion to dismiss, holding that the hospital may be held vicariously liable for the conduct of a non-employee physician and such determination is for the trier of fact after a trial.

A patient presented at the hospital, while in labor. The patient delivered a stillborn infant under the care of an obstetrician who was not an employee of the hospital, but had clinical privileges. Plaintiffs, the patient’s family, brought suit against the obstetrician and the hospital after the patient’s condition worsened and she passed away. The hospital moved to dismiss the case, arguing that it cannot be liable for the obstetrician’s conduct because he is not an agent of the hospital.

The court held that even though the obstetrician was not an actual agent of the hospital, it could still be liable for his conduct if a jury finds that he was an apparent agent of the hospital. Apparent agency is applied when a third person, in this case a patient, justifiably relies upon a principal’s representation, here a hospital, that another is its agent. The court explained that the obstetrician arrived wearing the hospital’s identification badge and said nothing to indicate that he was not an employee of the hospital. Thus, a jury could conclude that the obstetrician appeared to be an agent of the hospital and the patient relied on this representation.

Brown v. St. Mary’s Hosp. (Summary)

EMTALA

Brown v. St. Mary’s Hosp., No. 3:14CV228 (DJS) (D. Conn. Jan. 12, 2015)

The United States District Court for the District of Connecticut denied a defendant hospital’s motion to dismiss a lawsuit which alleged that the hospital violated the Emergency Medical Treatment and Active Labor Act (“EMTALA”) by failing to stabilize a patient’s emergency medical condition prior to his discharge.

The patient was admitted to the hospital based on his belief that he was suffering from diabetic ketoacidosis. While in the hospital, the patient underwent laboratory testing, x-rays, urinalysis, and an electrocardiogram. The patient was discharged while still in a state of diabetic ketoacidosis. He died soon after as a result of diabetes mellitus and diabetic ketoacidosis.

The court stated that EMTALA placed two obligations on the hospital – to provide a medical screening examination to determine if an emergency medical condition exists and, if one does exist, to stabilize it. The hospital argued that it was not liable under EMTALA since it provided the same treatment to the patient as it did to all other patients with diabetic ketoacidosis. In support of this argument, the hospital cited cases that stated EMTALA was violated if there was disparate treatment in stabilization. However, the court stated that those cases were not binding precedent, stated that some courts held that the stabilization requirement is not met by dispensing uniform treatment, and denied the hospital’s motion to dismiss.

Med. Staff of Avera Marshall Reg’l Med. Ctr. v. Marshall (Summary)

MEDICAL STAFF BYLAWS; MEDICAL STAFF AS AN ORGANIZATION

Med. Staff of Avera Marshall Reg’l Med. Ctr. v. Marshall, No. A12-2117 (Minn. Dec. 31, 2014)

The Minnesota Supreme Court reversed a lower court and held that the medical staff of an Avera hospital could sue the hospital itself, in the process holding that the medical staff bylaws were a contract between the hospital and the individual members of the medical staff and that the medical staff as an entity is capable of bringing a lawsuit.

The legal dispute began in 2012, when the Board of Avera Marshall Regional Medical Center, a nonprofit hospital, announced its plan to repeal and revise the hospital’s medical staff bylaws. The medical staff, along with its chief of staff and chief of staff-elect, brought an action in the courts for a declaration that medical staff bylaws were an enforceable contract between the hospital and the medical staff.

According to the provisions of the bylaws, the chief of staff, the Medical Executive Committee, the Board, or one-third of the active medical staff members could propose amendments to or the repeal of the medical staff bylaws. To effect a change, an affirmative vote of two-thirds of the eligible medical staff members was required. However, the bylaws also stated that the amendment and repeal process could not supersede the general authority of the Board as set forth under the corporate bylaws and applicable common law. Although the Board had stated that its repeal of the bylaws would not be submitted for a vote by the medical staff, the medical staff nevertheless voted on the proposed changes and rejected the repeal.

When the revised bylaws took effect on May 1, 2012, the medical staff sued. At the trial level, the district court dismissed the case, concluding that the medical staff bylaws were not an enforceable contract and that the medical staff did not have the legal standing to sue the hospital. After the court of appeals affirmed this decision, the medical staff appealed to the Minnesota Supreme Court.

The Minnesota Supreme Court explained that under Minnesota law, unincorporated associations have the right to sue if they can meet statutory criteria. The court found that the medical staff met those requirements, since the physicians associated and acted together for the purpose of ensuring proper patient care at the hospital.

The supreme court next addressed the issue of whether the bylaws created an enforceable contract and determined that they were. The court noted that physicians who seek privileges at the hospital must agree to be bound by the medical staff bylaws as a condition of appointment. It reasoned that a physician might choose not to join the medical staff because of those bylaws. Consequently, the court concluded that there was a bargained-for exchange of promises and mutual consent to the exchange.

The lawsuit has now been remanded to the district court for further proceedings.

U.S. ex rel. Sheldon v. Kettering Health Network (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Sheldon v. Kettering Health Network, No. 1:14-cv-345 (S.D. Ohio Jan. 6, 2015)

The U.S. District Court for the Southern District of Ohio dismissed a relator’s False Claims Act (“FCA”) claim against a hospital, holding that the relator failed to allege that the hospital submitted any false claim to the government. The relator alleged that her estranged husband began an extramarital relationship while being an employee of defendant, a hospital. In furtherance of this relationship, the relator alleged that her estranged husband accessed and shared her protected electronic health care information with others. The relator sued the hospital for violating the FCA. The relator claimed that the hospital failed to adhere to the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) and falsely certified its compliance with the HITECH Act, thereby collecting undeserved “Meaningful Use” dollars from the federal government.

The court dismissed the relator’s suit, holding that the relator failed to allege that the hospital was not compliant with the HITECH Act or submitted any false claims or certifications to the government for payment. The relator incorrectly argued that an isolated privacy breach constituted a violation of the HITECH Act. However, the court found that the hospital was compliant with the HITECH requirements and followed its instructions after it discovered the relator’s breach. Furthermore, the relator did not have adequate personal knowledge of any false claims or certification by the hospital. The relator was never an employee of the hospital or involved in any claim or certification. Instead, she based her whole argument on secondhand knowledge from her estranged husband.

U.S. v. Babaria (Summary)

FRAUD & ABUSE/ANTI-KICKBACK

U.S. v. Babaria, No. 14-2694 (3rd Cir. Dec. 31, 2014)

The federal Third Circuit Court of Appeals affirmed a court’s upward adjustment in a medical director’s sentencing, holding that the medical director was in a position of trust when he committed the wrongdoings. Plaintiff, a medical director, pleaded guilty to violating the anti-kickback statute. At sentencing, the court ruled that the medical director abused his position of trust and adjusted his sentencing guidelines upward. Facing a sentence of 70 to 87 months in prison, the medical director appealed the upward adjustment, arguing that he did not use his position of trust when making illegal payments for referrals.

The Third Circuit held that the medical director used his position of trust to supervise and conceal the payments of kickbacks, thus the upward adjustment was appropriate. The court explained that the medical director lacked supervision because his decisions were given considerable deference; therefore, he was in a position of trust. This lack of supervision helped the medical director facilitate his illegal payments because they were extremely difficult to detect.

U.S. ex rel. Dalitz v. Amsurg Corp. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Dalitz v. Amsurg Corp., No. 2:12-cv-02218-TLN-CKD (E.D. Cal. Dec. 24, 2014)

The U.S. District Court for the Eastern District of California denied an ambulatory surgical center’s motion to dismiss two nurses’ False Claims Act (“FCA”) claims, holding that liability attached when the ambulatory surgical center submitted forms for payment while not complying with Medicare regulations. Plaintiffs, two nurse anesthetists, were employed by defendant, an ambulatory surgical center. The two nurses became concerned about the ambulatory surgical center’s adherence to Medicare conditions, specifically, performance of a patient’s medical history and physical assessment, pre-surgical assessment, and anesthetic risk assessments before surgery.

After the nurses voiced their concerns to management, four patients underwent surgery at the ambulatory surgical center. The nurses alleged that these four patients did not have the proper pre-surgery assessments completed prior to their surgeries and that the ambulatory surgical center submitted claims to Medicare for payment. The nurses once again expressed their concerns to management; they were terminated four days later. The nurses sued, claiming that the ambulatory surgical center violated the FCA and retaliated against them. The ambulatory surgical center argued that the nurses failed to identify any false material statements made to the government for payment.

The court held that under the implied false certification theory, the nurses had only to identify the false claims in order to allege an FCA violation. The court explained that the ambulatory surgical center does not have to explicitly certify its compliance with Medicare regulations to violate the FCA. The certification is implied with the language of the Medicare payment form that the ambulatory surgical center submitted to the federal government. Moreover, the submitted form states that payment is conditioned on compliance with Medicare regulations.

Hammond v. Saini (Summary)

PEER REVIEW PRIVILEGE

Hammond v. Saini, No. 492PA13 (N.C. Dec. 19, 2014)

The Supreme Court of North Carolina affirmed a lower court’s ruling that certain documents were not protected by the state’s peer review privilege. Plaintiff, a patient who suffered first and second degree burns on her face during surgery, sued defendant, a hospital, for negligence. During discovery, the patient requested documents relating to the accident. The hospital asserted the peer review privilege for documents entitled “Root Cause Analysis Report.” Additionally, the hospital attached an affidavit which stated that the Root Cause Analysis Team is a peer review committee established pursuant to the peer review privilege statute. The lower court held that the peer review privilege did not apply to these documents because the hospital had not shown that the documents were part of a medical review committee’s proceeding. The hospital appealed, arguing that the Root Cause Analysis Team constitutes a medical review committee.

The court affirmed the lower court’s ruling, holding that, pursuant to the peer review privilege statute, the hospital failed to provide specific evidence that explains how the committee was created or how its operations were adopted. The court stated that the affidavit was insufficient to demonstrate that the Root Cause Analysis Team met the criteria to be a medical review committee. Instead, the affidavit simply recited the language of the statute in conclusory fashion. The hospital should have explained the formal organizational process that led to the adoption of the Root Cause Analysis Policy and the creation of the Root Cause Analysis Team.

Parungao v. Piper (Summary)

CREDENTIALING RELEASE OF LIABILITY

Parungao v. Piper, No. 3-14-0197 (Ill. App. Ct. Dec. 18, 2014)

The Appellate Court of Illinois affirmed a lower court’s dismissal of a surgeon’s defamation claim against a hospital’s chief of staff, holding that the statements made were not defamatory and that the surgeon was barred from bringing suit because he signed a release of liability form.

Plaintiff, a surgeon, was privileged at a hospital, but began to seek employment elsewhere. As part of the credentialing process, another health care facility sent defendant, the hospital’s chief of staff, requests for information. Included with a request was a release of liability form signed by the surgeon. The chief of staff responded to the request with a letter stating that the surgeon had active status, there had been clinical concerns which resulted in a peer review matter being opened, but that no disciplinary actions or restrictions had ever been placed on the surgeon’s privileges. The “clinical concerns” comment was under the “other actions” section of the document that included potential participation in an impaired practitioner program. The surgeon sued, claiming that the chief of staff defamed him because a person could imply that the surgeon participated in an impaired practitioner program.

The court affirmed the lower court’s dismissal of the suit, holding that the statements made were not defamatory. There was no suggestion, implied or explicit, causing the reader to conclude that the surgeon was suspected of being an impaired practitioner since he was still allowed to exercise full medical privileges while on staff at the hospital. Additionally, the surgeon signed a release of liability form barring him from bringing a defamation suit. The court concluded that the release of liability was enforceable because the chief of staff’s letter did not exceed the scope of the information authorized in the surgeon’s form.

Kaplan v. Blue Hill Mem’l Hosp. (Summary)

EMTALA

Kaplan v. Blue Hill Mem’l Hosp., Civil No. 1:14-CV-276-DBH (D. Me. Dec. 17, 2014)

Order Affirming Recommended Decision of the Magistrate Judge

Recommended Decision Denying Defendant’s Motion to Dismiss

The U.S. District Court for the District of Maine denied a hospital’s motion to dismiss a couple’s Emergency Medical Treatment and Active Labor Act (“EMTALA”) retaliation claim, holding that the couple engaged in protected activity. Plaintiffs, a physician assistant and a physician, were married and employed at the defendant, a hospital. The physician assistant alleged that throughout her employment she would inform the hospital about various practices she believed were in violation of EMTALA. Additionally, she allegedly documented EMTALA violations found in 300 patient charts. She was terminated after the hospital replaced physician assistants with licensed physicians in its emergency room.

The physician alleged that throughout his employment he notified hospital management of practices that he believed were in violation of EMTALA, such as stabilization issues, refusing to promptly admit patients, and patient dumping. After a professional review action against the physician, the hospital terminated the physician from its medical staff and reported this information to the National Practitioner Data Bank.

The couple brought suit claiming that they were both terminated for reporting potential EMTALA violations to hospital management. The hospital argued that the couple had failed to report any actual EMTALA violations, but instead only raised quality of care issues, not disparate treatment of uninsured patients.

The court denied the hospital’s motion to dismiss, holding that the couple’s complaints to management could reasonably be construed as relating to violations of EMTALA. The court explained that the couple’s complaints specifically addressed the screening, transfer, and stabilization requirements of EMTALA.