Ramirez-Ortiz v. Corporacion del Centro Cardiovascular de Puerto Rico y Del Caribe (Summary)

Vicarious Liability – Corporate Negligence

Ramirez-Ortiz v. Corporacion del Centro Cardiovascular de Puerto Rico y Del Caribe, No. 12-2024 (FAB) (D.P.R. Aug. 13, 2014)

A district court in Puerto Rico denied two requests for summary judgment, holding that there still existed a genuine issue of fact regarding whether a patient entrusted his health to a hospital system or to specific physicians.

A patient was hospitalized, and treatment was provided by two interventional cardiologists who held hospitalization privileges. After the patient’s untimely death, his survivors brought claims against the hospital for negligence, claiming that the patient entrusted his health to the hospital, not to the individual doctors.

When a patient enters a hospital and is assigned a physician, the hospital may be held vicariously liable to the patient. However, if the patient goes to the hospital by recommendation of a particular physician, the hospital is not liable for the physician’s negligence. The court denied the plaintiff’s motion for summary judgment, stating that genuine issues of material fact still existed regarding the patient’s relationship with the doctors at the time of his treatment. The court stated that more facts will be necessary to determine whether the patient first entrusted his care to the hospital or the doctors.

For similar reasons, the court also denied the hospital’s request for summary judgment. Because it is still unclear whether the patient relied on the physicians specifically or the hospital generally, the issue of vicarious liability cannot yet be addressed. The court cannot determine whether there was a “private patient” relationship between the patient and physician while the details surrounding the patient’s admittance to the hospital are still heavily in dispute.

The court also found that the nursing staff may have violated the standard of care by failing to inform the doctor of material changes made to his pre-operative orders. Because the standard of care remains an issue of controversy, the court denied the hospital’s request for summary judgment.

Buman v. Gibson (Summary)

Supervision of Allied Health Practitioners

Buman v. Gibson, No. W2013-01867-COA-R3-CV (Tenn. Ct. App. Aug. 11, 2014)

A man sought treatment from a physician’s assistant (“PA”) for foot ulcers. For almost three months, the PA treated the patient. During this time, the PA was monitored by a supervising physician, who never personally treated the patient, but who reviewed 30% of the PA’s charts. Eventually, the PA referred the patient to a vascular surgeon. Unfortunately, the patient’s leg eventually had to be amputated below the knee. The patient and his wife filed a motion in which they alleged that the PA was negligent in not referring him to a specialist sooner. The patient passed away soon thereafter, due to unrelated causes, and the executrix was substituted as the plaintiff. The executrix then filed an amended complaint, alleging that the PA’s supervising physician was negligent in not properly ensuring that the patient received effective treatment. Before the trial court date, the supervising physician filed a motion for summary judgment, stating that no expert testimony obtained during depositions could link his alleged negligence with the loss of the patient’s leg. In response, the executrix filed a motion to amend her complaint and “more clearly plead” a claim of vicarious liability against the supervising physician. The trial court granted summary judgment to the supervising physician and denied the executrix’s motion to amend her complaint.

The court found that the trial court was correct in finding the supervising physician fulfilled his responsibilities in monitoring the PA’s behavior. The court held that the supervising physician had sufficiently proven his active and continuous overview of the PA. A supervising physician, who is only statutorily required to review 20% of a PA’s charts, is not expected to determine which charts need special attention over others. Rather, the court held, there is an implied duty on the PA to bring the charts in need of special attention to the supervising physician’s attention. Therefore, the court could find no basis in which to find the physician liable.

The trial court did not err in ruling that there was no claim for vicarious liability, as it is not the court’s job to impose additional responsibilities on supervising physicians that the legislature chose not to enumerate in statute.

The court recognized that the trial court had denied the executrix’s motion to amend the complaint due to timeliness, as the motion to amend was filed two years into the lawsuit and only a few weeks before the trial date. The court found that no abuse of discretion had been shown to rebut this reasoning.

Fresenius Med. Care Holdings, Inc. v. U.S. (Summary)

False Claims Act Settlement

Fresenius Med. Care Holdings, Inc. v. U.S., No. 13-2144 (1^st Cir. Aug. 13, 2014)

After a series of criminal plea and civil settlement agreements with the government, a dispute remained over how the settlement payments made under the False Claims Act by an operator of dialysis centers were to be taxed. The sums paid in criminal fines were deemed non-deductible, while the sums paid in civil settlement agreements were deductible. However, there remained a dispute of the treatment for the existing balance of the civil settlements. The operator of the dialysis centers then filed amended tax returns, taking no deduction for the existing balance. An administrative appeal followed, determining that the existing balance owed to qui tam relators was deductible. The operator of the dialysis centers then began a tax-refund action against the United States District Court for the District of Massachusetts to determine the deductibility of the remaining civil settlement balance. In a subsequent trial, a jury found that $95,000,000 of the $126,796,262 balance was deductible. After the parties stipulated to the verdict’s tax effect, the court entered judgment for the operator of the dialysis centers for $50,420,512.34. The court denied the government’s motion for judgment as a matter of law. The government then appealed.

The government argued that the district court erred in denial of its motion for judgment as a matter of law. The government urges that deductibility cannot be granted because no deductibility agreement existed between the parties. The court affirmed the district court’s ruling, finding this rationale to be single-minded and unrealistic. Furthermore, the court found that the parties specifically manifested the intent to disagree on the issue of deductibility, leaving the court no choice but to take a common-sense approach based on economic realities.

The government also argued that the district court erred in the instructions it presented to the jury. However, the court dismissed this claim, finding that the argument could not be raised for the first time on appeal.

Klaine v. So. Ill. Hosp. Servs. (Summary)

Peer Review Privilege

Klaine v. So. Ill. Hosp. Servs., No. 5-13-0356 (Ill. App. Ct. Fifth Dist. Aug. 6, 2014)

The Appellate Court of Illinois Fifth District affirmed a circuit court’s discovery order regarding documents in a malpractice lawsuit, while imposing a few modifications.

A patient filed a medical malpractice claim against a surgeon after the patient’s colon was perforated during a gallbladder removal procedure. In filing his claims against the surgeon, the patient also sued the hospital, alleging that the hospital was negligent in credentialing the surgeon. The plaintiff filed a motion to compel certain documents for discovery, but the hospital responded that such information was privileged. A circuit court found that while most of the documents were privileged, a few exhibits were not. The court denied the hospital’s motion to reconsider, to which the hospital appealed.

The appellate court found first that the court did not abuse its discretion in allowing an exhibit that details three applications for staff privileges, as the court may have reasonably found relevant evidence from the information within the applications. Also, because the hospital did not raise this issue until the motion to reconsider, the court found that the issue had been forfeited. The hospital also argued that the applications within this exhibit were privileged under the Data Collection Act. After a textual analysis of the act, the court affirmed the circuit court’s ruling, determining that the legislature had not designated an explicit protection of applications for staff privileges.

After determining that the applications for staff privileges were not protected, the court then looked to examine whether specific information within the applications should be redacted. The court held that certain references to an external peer review issued by a consulting company were to be redacted, as the information was protected under the Medical Studies Act. However, the court chose not to redact references to the National Practitioner Data Bank, because such information is permitted through state discovery rules. The court also held that the information within the applications regarding treatment of patients is permitted in judicial and administrative proceedings under HIPAA, and therefore was not to be redacted. Additionally, the hospital argued that information provided by the surgeon about his own medical condition in his application should be protected under the physician-patient privilege. The court denied this reasoning, as it is the surgeon’s own assessment.

The hospital also argued that an exhibit containing the surgeon’s procedure summaries was protected under the Medical Studies Act. The court affirmed the circuit court’s order that these documents be provided, determining that the summaries provided raw data rather than physicians’ evaluations.

Levitan v. Northwest Cmty. Hosp. (Summary)

HCQIA IMMUNITY DENIED

Levitan v. Northwest Cmty. Hosp., 13-C-5553 (N.D. Ill. Aug. 12, 2014)

The United States District Court for the Northern District of Illinois denied in part and granted in part a hospital’s motions to dismiss a surgeon’s antitrust and hostile work environment claims. A female, Jewish physician of Russian descent had privileges at the hospital, as well as other facilities in the area. According to the complaint, the physician was in good standing at the hospital and had never been the subject of any disciplinary action. The physician alleged that a competing surgeon began insulting, ridiculing, and demeaning her based on her gender, ethnicity and religion. The physician reported this behavior to the hospital as a violation of its Disruptive Behavior Policy. In response, the competing surgeon and his senior partner, who was a member of the hospital’s Medical Executive Committee (“MEC”), allegedly retaliated against the physician by submitting 31 of her cases to the MEC for review. This initiated a peer review process that lasted for two years and ultimately resulted in a recommendation to terminate the physician’s medical staff appointment and clinical privileges.

The physician requested a hearing with a judicial review committee pursuant to the medical staff bylaws. The judicial review committee issued a 24-page decision finding, among other things, that the concerns raised about the 31 cases submitted to the MEC did not support the action and that no actions should be taken against the physician’s privileges. The committee also noted that all future reviews of the physician’s practice should be without the involvement of the competing surgeon or his senior partner. The MEC appealed the judicial review committee’s decision to the hospital’s quality committee, which issued a one-page ruling reversing the judicial review committee’s decision. The hospital’s board affirmed and the physician’s privileges were terminated and a report was filed with the National Practitioner Data Bank. The physician brought this action, claiming antitrust violations and a hostile work environment based on her gender, race, and ethnicity.

The court first denied the hospital and surgeon’s immunity under the Health Care Quality Improvement Act and the state’s hospital licensing act, finding that the factual allegations provide “plausible ground” to doubt that the actions taken against the physician were done so with a reasonable belief that they were taken in furtherance of quality health care.

And while the court dismissed the physician’s antitrust claim because she did not plead an antitrust injury, the court did find that the physician had adequately pled that she was harassed because of her gender, race, and ethnicity, and that the case should continue to discovery. The court relied on the fact that the physician was singled out by the competing surgeon and his senior partner for being the sole female, Eastern European, Jewish surgeon and that they verbally attacked her, made belittling remarks, and questioned her skill and judgment.

U.S. ex rel. Corporate Compliance Assocs. v. N.Y. Soc’ty for the Relief of the Ruptured and Crippled, Maintaining the Hosp. for Special Surgery (Summary)

FALSE CLAIMS ACT – QUI TAM CASE

U.S. ex rel. Corporate Compliance Assocs. v. N.Y. Soc’ty for the Relief of the Ruptured and Crippled, Maintaining the Hosp. for Special Surgery, No. 07 Civ. 292 (PKC) (S.D. N.Y. Aug. 7, 2014)

The United States District Court for the Southern District of New York dismissed a relator’s qui tam action brought under the False Claims Act (“FCA”) against an orthopedic hospital, holding that the relator’s complaint failed to satisfy the pleading requirements set forth in Federal Rule of Civil Procedure 9(b). The relator, a general partnership with no relationship to the hospital, brought a qui tam action under the FCA alleging that the hospital submitted fraudulent claims for Medicare and Medicaid reimbursement, and violated the Stark Law and the Anti-Kickback Statute by inducing physicians’ referrals with monetary incentives. Specifically, the relator alleged, based on information it apparently received from unnamed former officers of the hospital, that the hospital purposely overbilled Medicare and Medicaid by miscoding 335,000 claims and that the hospital paid excessive compensation to its physicians through annual payments for performing clinical, administrative, research and academic services in order to induce in-house service referrals. The relator alleged that these false claims caused $788,000,000 in damages to the United States, which, if treble damages were to apply, would amount to over $2 billion.

The court held that the relator’s complaint failed to satisfy the pleading requirements set forth in Federal Rule of Civil Procedure 9(b). The court explained that Rule 9(b) requires a complaint to allege the particulars of the false claims themselves. This includes the dates that the claims were submitted, the amounts charged in the claims, their allegedly false contents, and the hospital’s standard billing practices. Here, the relator failed to identify the dates or amounts of any allegedly false claims, their false contents, or even how the hospital fraudulently certified them and made only general allegations of a fraudulent scheme.

Alzadon v. Highlands Hosp. Corp. Inc. (Summary)

INCOME GUARANTEE – BREACH OF CONTRACT

Alzadon v. Highlands Hosp. Corp. Inc., No.2012-CA-000102-MR (Ky. Ct. App. Aug. 8, 2014)

The Court of Appeals of Kentucky affirmed a lower court’s entry of summary judgment for a hospital’s breach of contract claim against a surgeon, holding that the facts show the surgeon breached the terms of his employment agreement. The employment agreement included an income guarantee, so long as the surgeon did not have his privileges reduced, suspended, or terminated. Within the first two months of the surgeon’s employment, the hospital received six complaints about his performance. The hospital restricted his privileges, and required him to complete a surgical mini-residency in order to have his full privileges reinstated. After five months without the surgeon completing the surgical mini-residency, the hospital decided to suspend his privileges and sent him a letter informing him he could request a hearing within 30 days. The surgeon responded with a letter from a physician in another state who agreed to provide the required training and the hospital lifted the suspension and allowed the surgeon to complete the surgical mini-residency with this physician. However, in order to be accepted into the physician’s program, the surgeon intentionally concealed his standing with the hospital. When this was discovered, the surgeon was terminated from the program and never completed the required surgical mini-residency. The hospital then terminated the surgeon and set a schedule for the surgeon to pay back his guaranteed income of $305,000. The surgeon paid the hospital a lump sum of $75,000, but never made another payment. The hospital brought this action seeking to recover the rest of the guaranteed income, as well as attorney’s fees.

The court held that all facts show that the surgeon breached the employment agreement with the hospital, and the surgeon failed to present any evidence that suggests otherwise. The surgeon acknowledged that he did not complete the required additional training and intentionally concealed the nature of his training requirements to the prospective program. Additionally, he acknowledged that he did not exhaust all of the administrative remedies available to him. Lastly, the court held that the hospital was entitled to reasonable attorney’s fees pursuant to the employment agreement.

Saint Alphonsus Diversified Care Inc. v. MRI Assocs. (Summary)

BREACH OF CONTRACT

Saint Alphonsus Diversified Care Inc. v. MRI Assocs., No. 40012-2012 (Idaho Aug. 4, 2014)

The Supreme Court of Idaho affirmed a jury’s verdict awarding $52 million to a magnetic resonance imaging (“MRI”) center against a hospital for breach of contract and tortious conduct, holding that the jury’s conclusions were based on sufficient evidence. Plaintiff, an MRI center, entered into a partnership agreement with the hospital to provide MRI services at various locations. Included in the partnership agreement was a provision that, in the event of disassociation, the hospital would not compete with the MRI center for one year. In spite of their agreement, the hospital began discussing a new partnership agreement with the MRI center’s biggest competitor, and even persuaded the MRI center from opening a facility around the competitor. Subsequently, the hospital disassociated with the MRI center and entered into a partnership agreement with the competitor and immediately began competing with the MRI center. The MRI center brought this action in which it claimed breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duties that arise from the partnership.

The court held the jury had sufficient, competent evidence to find that the hospital breached its contract and tortiously interfered with the MRI center. The court stated that evidence was presented from which the jury could conclude that the hospital decided its long-term plan was to partner with the competitor and the plan was implemented before the yearlong prohibition from competing had concluded.   Furthermore, the hospital dissuaded the MRI center from opening a facility around the competitor resulting in more lost profits to the MRI center.

As to the breach of fiduciary duties claim, the court held that the lower court erred by allowing the jury to decide it. The court stated that the fiduciary duties partners owe each other terminates at disassociation. However, the error was moot and the hospital was not prejudiced by it because the jury award of damages for breach of fiduciary duties was identical to the jury’s award for the breach of contract claims.

Kaufman v. Columbia Mem’l Hosp. (Summary)

EMPLOYMENT — TERMINATION

Kaufman v. Columbia Mem’l Hosp., No. 1:11-CV-667 (MAD/CFH) (N.D. N.Y. Aug. 7, 2014)

The U.S. District Court for the Northern District of New York granted in part and denied in part a physician’s motion in limine and denied the hospital’s motion in limine without prejudice.

The physician alleged that the hospital violated the terms of their employment agreement by suspending him, terminating him, and denying his renewal for medical staff privileges without due process. The hospital argued that there was just cause to justify the physician’s termination, including the physician’s incompetence. The hospital also brought counterclaims of unjust enrichment, alleging that it is entitled to the advance payment the physician received during his suspension. Both parties submitted requests to dismiss portions of the other party’s evidence.

The court denied the physician’s request to preclude any evidence related to his competency to safely practice medicine, holding that the issue was relevant to determine if the hospital did, in fact, have just cause for his termination. The court also denied the physician’s motion to bar certain out-of-court statements referring to his alleged incompetence. Because the court did not know the specific content or context of the statements, it was unable to make a definitive ruling. However, it indicated that statements may be permitted to demonstrate that the hospital’s opinion toward the physician was fair and reasonable. The physician’s motion to preclude the introduction of other doctors’ testimony toward his competence was also denied. Though the witnesses have not been proffered as experts, it is commonly held that physicians may testify as to their opinions of other physicians’ competence. While one of the doctors sought as a witness never worked alongside the physician, the court found that his opinion may still be relevant to determine whether the hospital acted fairly and reasonably in the termination of the physician.

The court did grant the physician’s request to preclude the introduction of evidence regarding prior malpractice settlements. It was determined that allowing such evidence would be highly prejudicial, and could spiral into a “series of mini-trials over allegations of malpractice.” The court also granted the physician’s request to bar the hospital from introducing evidence of a promissory note, as it was not relevant to the issue at trial.

The hospital requested that the court exclude all evidence relating to discrimination. The court denied this request, finding that the hospital’s request lacked sufficient specificity. Additionally, the court determined that the physician would be able to introduce evidence to show that the hospital’s actions were not fair and reasonable, but motivated by discriminatory bias.

Shapira v. Christiana Care Health Services, Inc. (Summary)

VICARIOUS LIABILITY

Shapira v. Christiana Care Health Services, Inc., No. 392, 2013 (Del. Aug. 7, 2014)

The Supreme Court of Delaware affirmed a lower court’s judgment that a surgeon failed to obtain proper consent before performing a procedure on a patient, while remanding for instructions to vacate a supplemental jury verdict.

A patient suffering from multiple rib fractures presented to a hospital, where a thoracic surgeon determined he was a candidate for a non-FDA approved “On-Q” catheter procedure for pain management. The surgeon explained the procedure to the patient and obtained consent. However, the surgeon failed to tell the patient of other viable treatment methods for pain management, such as epidural anesthesia. Additionally, the surgeon failed to disclose that he had a personal interest in the use of the On-Q procedure, as the surgeon was under contract with the manufacturer, was a member of the corporation’s speaker’s bureau, and was conducting a study of the procedure’s effectiveness using patient data. After the surgery, the patient’s catheters became displaced, resulting in internal organ damage. The patient then sued the doctor for negligently failing to obtain proper informed consent, and for negligently performing the procedure. In addition, the patient sued the hospital for negligence because the surgeon was serving as the hospital’s agent. At trial, the jury verdict awarded the patient millions of dollars in damages, attributing 65% of total liability to the surgeon and 35% to the hospital. The hospital then asked the jury to specify what apportionment of its liability was attributable to the agency relationship and what was attributable to the hospital’s failure to properly supervise the surgeon’s study. The Superior Court granted the allowance of the question but refused to revise the verdict based on the jury’s answer. The surgeon appealed to the issue of informed consent, evidence of the experimental nature of the procedure, and pre-judgment and post-judgment interest. The hospital then cross-appealed regarding the supplemental jury question.

The court affirmed the Superior Court’s ruling that the patient was not given adequate disclosure to allow for proper informed consent. The patient was not made aware of the risks, alternative procedures, or the surgeon’s personal interest in administering the procedure. The court held that the evidence of the conflict of interest was admissible, as it spoke to the surgeon’s lack of disclosure and possible incentive for performing one surgery over another. Additionally, the court ruled that the Superior Court was correct in allowing only expert witnesses to testify as to whether the procedure was or was not experimental. Regarding the surgeon’s appeal to the pre-judgment and post-judgment interest, the court held the statute was clear that the interest applied when the demand was valid for a minimum of 30 days.

The court held that it was a mistake for the Superior Court to allow the hospital’s supplemental question to be presented to the jury. According to the court, the jury verdict should not be disturbed unless it is found to be unreasonable. Therefore, the court found the supplemental verdict invalid and ordered that it be vacated by the Superior Court.