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.

Luedecke v. Tenet Healthcare Corp. (Summary)

ADA/DISCRIMINATION

Luedecke v. Tenet Healthcare Corp., Civil Action No. 3:14-CV-1582-B (N.D. Tex. Jan. 5, 2015)

A federal court in Texas dismissed an anesthesiologist’s claim that he was discriminated against when his hospital employer refused his request for accommodation.

The anesthesiologist first requested that he be removed from the emergency room on-call schedule due to neck pain in 2010. His request was denied, and he remained on the on-call list. The anesthesiologist provided a letter from his doctor stating that his neck condition allowed him to work, but should excuse him from night call. His request for accommodation was once again denied. After the anesthesiologist requested again that he be removed from the on-call schedule, the hospital ordered him to undergo an examination by his doctor. The Medical Board in two subsequent meetings maintained that the anesthesiologist was still required to be on call in accordance with the hospital’s bylaws. The anesthesiologist then filed a discrimination charge, claiming that the hospital had discriminated and retaliated against him due to his disability and requests for accommodation.

The court found that the anesthesiologist did not allege sufficient facts to support his claim that he falls under the definition of “disabled” as described by the Americans with Disabilities Act (“ADA”). While he claimed to have pain in his neck, he did not specify what “major life activities” were limited or adversely affected by this pain. The letter from his doctor was similarly insufficient, as it did not indicate how the anesthesiologist’s pain or medication would prevent him from fulfilling his on-call requirements. The anesthesiologist’s claims of retaliation were dismissed because the denial of his request for accommodation does not constitute retaliatory conduct.

Valentin-Lugo v. Hosp. Matilde Brenes Inc. (Summary)

EMTALA

Valentin-Lugo v. Hosp. Matilde Brenes Inc., Civil No. 12-1757 (PAD) (D.P.R. Dec. 18, 2014)

Memorandum and Order

The Magistrate Judge’s Report and Recommendation

The U.S. District Court for the District of Puerto Rico granted a hospital’s motion for summary judgment against an EMTALA lawsuit. The EMTALA lawsuit was filed by an employee of the hospital, who became a patient there after she developed sudden abdominal pain during her lunch break.

At issue in the case was whether the hospital conducted an adequate screening of the patient before transferring her to see her personal obstetrician. When the patient developed a sudden onset of abdominal and pelvic pain, she was taken to the hospital’s “Labor Room” for an examination by its resident obstetrician. However, she refused to consent to this examination, instead requesting that the hospital transfer her to see her personal obstetrician at another location. Prior to the transfer, the hospital conducted a “Non-Stress Test” and determined that the fetal heart rate was normal and that she was not undergoing contractions. The hospital also conducted several other tests, including a pelvic examination, blood test, urinalysis, and renal sonogram. All of these indicated that it was safe for the patient to be transferred. The parties in the lawsuit differed over whether the patient displayed any indications of trouble during transit. The hospital argued that her vital signs were normal, but the patient claimed that the paramedic record showed premature contractions and the possibility of hypovolemic shock and class II hemorrhage. Tragically, when the patient arrived at the destination hospital, the receiving nurse found no fetal heart rate. A subsequent examination revealed a ruptured uterus and intrauterine death of the fetus.

In her lawsuit, the patient alleged that the hospital failed to perform a complete medical examination before transferring her. The hospital countered by arguing that it had complied with EMTALA, and that it had treated her as it would any patient with similar symptoms. In addition, the hospital argued that although the patient claimed the Non-Stress Test did not last long enough, she had failed to submit any other evidence demonstrating that her screening was inadequate or that the hospital had failed to comply with EMTALA.

A magistrate judge initially heard the case and found that the hospital had complied with EMTALA. The judge noted that the hospital had ordered tests to identify the source of her pains and had transferred her to a hospital in her hometown after it deemed her stable. Consequently, the judge recommended that the hospital’s motion for summary judgment be granted. The U.S. District Court concluded that the magistrate judge had made the proper ruling and affirmed. It dismissed the case with prejudice.

 

Morman v. Campbell Cnty. Mem’l Hosp. (Summary)

GENDER DISCRIMINATION

Morman v. Campbell Cnty. Mem’l Hosp., No. 13-CV-243-ABJ (D. Wyo. Dec. 5, 2014)

A federal court in Wyoming dismissed an orthopedic surgeon’s motion alleging that gender discrimination from a county hospital resulted in damage to her compensation and conditions of employment by that hospital. Soon after becoming employed by the hospital, the surgeon began noting several issues with the hospital’s management of the clinic in which she practiced. She objected to the name change of the clinic and complained that the clinic did not have effective advertising, managerial staff, office space, or billing personnel, all of which combined, she claimed, put her at a competitive disadvantage with other orthopedic surgeons and affected the productivity bonus payments she would have received under her contract. Shortly after the surgeon renegotiated her employment contract, the terms of which were highly publicized in the area, the hospital entered into agreements with three male orthopedic surgeons from the area surgery center where the plaintiff surgeon had previously practiced. Under these agreements, which were not highly publicized, the hospital paid for the surgery center’s advertising campaign, radiology services and billing and allowed the surgeons to remain in their modern office space. She then sued the hospital and individually named board members for discrimination, alleging disparate treatment on the basis of gender.

The court determined that while the board members were not entitled to absolute legislative immunity, they were entitled to qualified immunity, because the surgeon failed to show that their conduct in approving the contracts of the three male surgeons was a violation of a clearly established constitutional right. Furthermore, the court dismissed the surgeon’s discrimination claim, finding that she had not alleged a plausible claim that she was treated differently than other similarly situated employees. Rather, the court found, the male surgeons from the surgery center brought more to the bargaining table than the plaintiff surgeon. This meant that they were not similarly situated, and thus could not be compared.