Atlanta Emergency Servs., LLC v. Clark (Summary)

EMPLOYMENT CONTRACT

Atlanta Emergency Servs., LLC v. Clark
No. A14A0469 (Ga. Ct. App. July 8, 2014)

The Court of Appeals of Georgia upheld a jury’s verdict in favor of an emergency medicine physician (“Physician”) against her employer, a staffing agency (“Employer”), holding the Employer acted in bad faith in terminating the Physician’s employment. The Physician was hired to work at a local hospital. The Physician’s employment contract stated that she could be terminated without cause on 60 days’ written notice, or immediately if the hospital requested her removal or the hospital reported that the physician was being disruptive, unprofessional, or unreasonably uncooperative with the staff.

During the course of a year, the Employer received over a dozen complaints from nurses, patients, and other physicians that the Physician was rude and disrespectful. The Employer met with the Physician in an effort to resolve the issues and in the hope of preventing the complained of behavior from reoccurring.

Several months later, the Employer gave the Physician notice that her employment was being terminated, without cause, in 60 days. Despite the fact that the employment contract required it, and despite the fact that the Physician had requested it, the Employer failed to provide this notice of termination in writing. One month later, the Employer informed the Physician that she was being terminated immediately, for cause, based on a request from hospital administration. The Physician later learned that hospital administration had not requested her termination.

The Physician sued claiming that the Employer terminated her employment for cause despite the fact the contractual conditions required to do so were not satisfied, and, as such, the termination was in bad faith. After a trial, the jury found in favor of the Physician and awarded her $61,000 for lost wages and attorney’s fees. The Employer appealed the jury’s verdict and the amount of the award.

The appellate court held that the jury, as fact finder, was not unreasonable in finding that the Employer breached the employment contract by terminating the Physician’s employment for cause because the hospital’s executive team never requested the Physician’s immediate termination or officially reported any complaints. Furthermore, the court held the Employer acted in bad faith when it decided to terminate the Physician’s employment immediately even though it lacked cause to do so and, under state law, acting in bad faith permits attorney’s fees to be awarded by the jury.

Wheeless v. Maria Parham Med. Ctr., Inc. (Summary)

PEER REVIEW PRIVILEGE

Wheeless v. Maria Parham Med. Ctr., Inc.
No. COA13-1063 (N.C. Ct. App. July 1, 2014)

An orthopedic surgeon (“Physician”) filed a lawsuit against a hospital (“Hospital”) alleging unfair and deceptive trade practices, breach of contract, and negligent infliction of emotional distress. Prior to filing the complaint, the Physician had complained that the Hospital had failed to honor a Settlement Agreement, in particular, that the Hospital had refused to call the Physician for consults when he was requested by his patients.

Several of the Physician’s claims did not survive summary judgment, but others progressed to discovery. A dispute arose when the Physician attempted to use the discovery process to obtain documents related to an earlier peer review process that had led to the Settlement Agreement. The Hospital argued that the documents were privileged under the state peer review statute. The Physician contended that the privilege did not apply because the peer review process had been used maliciously.

The Physician’s first two attempts to compel production of the peer review documents were unsuccessful: two separate judges upheld the Hospital’s claim of a peer review privilege. However, a third judge concluded that there was evidence of malice and compelled the Hospital to produce documents that had previously been determined to be privileged.

The Hospital appealed. The appellate court reversed, concluding that the third judge did not adequately demonstrate that circumstances had changed enough to give her authority to overrule decisions by the prior judges.

Baklid-Kunz v. Halifax Hosp. Med. Ctr. (Summary)

FALSE CLAIMS ACT

Baklid-Kunz v. Halifax Hosp. Med. Ctr.,
No. 6:09-cv-1002-Orl-31TBS (M.D. Fla. July 1, 2014)

The U.S. District Court for the Middle District of Florida granted in part and denied in part a motion for summary judgment filed by Halifax Hospital (“Hospital”) in a False Claims Act suit brought by the Relator. The Relator had accused the hospital of unnecessarily admitting patients in order to inflate its charges for Medicare claims.

The claims at issue spanned a period from 2002 to 2013. Less than a month before trial, the Hospital argued, for the first time, that claims prior to 2007 were barred by the statute of limitations. The court denied the Hospital’s request, holding that the Hospital had been given notice of this issue and should have raised it sooner.

The Relator alleged that the Hospital violated the Medicare Conditions of Participation (CoP) by admitting patients without a physician’s order. In defense, the Hospital argued that failing to abide by a CoP was irrelevant with respect to whether a claim was false for purposes of the False Claims Act. The court agreed, concluding that a claim is not false solely because of the lack of an admission order.

The court granted the Hospital’s motion for summary judgment with respect to the Relator’s attempt to recover damages, concluding that the Relator had failed to produce adequate evidence from which a reasonable jury could determine the appropriate amount of damages. Furthermore, the court held that even if the Relator could prove that patients had been improperly admitted, the proper measure of damages would be the difference between what the Hospital billed for its inpatient services and what the Hospital could have billed for outpatient services. The Hospital could still be found liable for civil penalties under the False Claims Act.

Horisons Unlimited v. Santa Cruz-Monterey-Merced Managed Med. Care Comm’n (Summary)

MANAGED CARE ANTITRUST

Horisons Unlimited v. Santa Cruz-Monterey-Merced Managed Med. Care Comm’n,
No. 1:14-CV-00123-LJO-MJS (E.D. Cal. June 30, 2014)

The United States District Court for the Eastern District of California granted in part and denied in part a motion to dismiss antitrust, discrimination, and breach of contract claims brought by a non-denominational religious health care provider (the “Clinic”), which serves California’s Medi-Cal beneficiaries. The claims were brought against a Medi-Cal managed care plan (the “Plan”) and the County. The Plan was the only Medi-Cal managed care plan in the County, and the Clinic was forced to contract with it in order to continue to provide care to Medi-Cal beneficiaries.

A provision in the contract stated that the Plan must credential the Clinic’s providers. The Clinic alleged that the County and the Plan took up to six months to complete credentialing, and refused to grant temporary credentials to the Clinic’s providers. This was in spite of the Plan’s routine practice of granting temporary credentials to providers of the Clinic’s main competitor, whose CEO was on the Plan’s Board. The Clinic alleged that it was on the brink of bankruptcy and would continue to lose $350,000 per month because of the actions of the County and the Plan.

The court dismissed the Clinic’s antitrust claim against the County for only offering one managed care plan because a statutory provision allowed for such limited offerings as long as the managed care plan met statutory qualifications. However, the court denied the Plan’s motion to dismiss the Clinic’s claim for conspiracy to monopolize the market (to the extent the claim was seeking injunctive relief) because a reasonable jury could determine that the Plan and the Clinic’s competitor conspired to monopolize the Medi-Cal healthcare provider market. However, with respect to this claim and the Clinic’s request for monetary damages, the court found that the Plan was entitled to immunity under the Local Government Antitrust Act.

Next, the court dismissed the Clinic’s discrimination and breach of contract claims. The court found that the Clinic failed to come close to stating a claim that the County or the Plan deprived the Clinic of its First Amendment right. Additionally, the Clinic failed to show the County and the Plan breached their contract by refusing to grant temporary credentials to the Clinic’s providers because the contract did not contain a provision that permitted temporary credentials.

In re Wyatt v. Vanguard Health Sys., Inc. (Summary)

HOSPITAL LIABILITY/ADULT PROTECTIVE SERVICES

In re Wyatt v. Vanguard Health Sys., Inc., No. CV-13-0272-PR (Ariz. June 30, 2014)

The Supreme Court of Arizona vacated the opinion of a lower court, holding that Arizona’s Adult Protective Services Act applies to acute care hospitals in their treatment of patients and subjects them to potential liability.

Separate wrongful death lawsuits were brought against two hospitals, and then were consolidated. The hospitals argued that they should not be held liable under a state statute that holds providers of care liable for harm or neglect to a vulnerable adult. The hospitals argued further that they provide “treatment” rather than “care,” meaning they don’t fall under the text of the statute. The court disagreed, ruling that the language of the statute applies to acute care hospitals, as well as any other facility that neglects, abuses, or exploits vulnerable adults.

Hamdan v. Ind. Univ. Health N. (Summary)

ATTORNEY-CLIENT PRIVILEGED DOCUMENTS

Hamdan v. Ind. Univ. Health N., No. 1:13-cv-00195-WTL-MJD (S.D. Ind. June 24, 2014)

The U.S. District Court for the Southern District of Indiana granted in part and denied in part a surgeon’s motion to compel production of documents. The surgeon alleged that a hospital had discriminated against him on the basis of his race and ethnicity. The surgeon accused the hospital of entertaining false charges of professional misconduct against him, of harming his reputation through disciplinary actions, and of forcing his resignation.

The surgeon sought to obtain e-mails exchanged among the hospital’s supervisory, medical, nursing, and human resources personnel. The defendants refused to produce these e-mails for the plaintiff on the grounds that the e-mails were guarded by the attorney-client privilege and by the attorney work product rule. Attorney-client privilege is a legal doctrine that permits clients to refuse to disclose confidential communications with an attorney. The work product rule provides a limited degree of protection during discovery proceedings for the work product of an attorney.

The court permitted the surgeon to view certain e-mails that were “HR focused” and which documented “at-the-moment analysis” by the hospital’s chief medical officer and chief nursing officer, among others. The court ruled that simply copying attorneys on an e-mail chain in order to keep them abreast of business-related occurrences is not sufficient to guarantee the protection of attorney-client privilege or the work product rule. The court denied the surgeon’s request for the remaining e-mails, deciding that those e-mails qualified for protection.

Haight v. NYU Langone Med. Ctr. Inc. (Summary)

SEXUAL HARASSMENT/HOSTILE WORK ENVIRONMENT

Haight v. NYU Langone Med. Ctr. Inc., No. 13 Civ. 04993 (LGS)(S.D. N.Y. June 27, 2014)

The U.S. District Court for the Southern District of New York granted in part and denied in part a hospital’s motion to dismiss an action brought by a former nurse accusing the hospital, under state law, of negligent supervision, quid pro quo sexual harassment, hostile work environment sexual harassment, disability discrimination and failure to provide a reasonable accommodation, and religious discrimination. The nurse, a 41-year-old woman with gynecological problems and a strict follower of the Catholic faith, was harassed by a co-worker over a six-year period. The co-worker impermissibly accessed the nurse’s personal medical charts numerous times and used this information to call the nurse late at night, inappropriately touched her, and negatively discussed the nurse’s medical problems and religious practices with other employees. The co-worker was also suspected of leaving a used pregnancy test on the nurse’s desk. Additionally, a doctor who worked with the nurse gave her a religious book when the physician heard about her health problems. He advised her that it had a section “on women who were cursed by God because they have no children[.]” The nurse repeatedly made complaints to the hospital’s human resources department and HIPAA compliance officer.

The co-worker was fired from the hospital, but an outside vender hired her the next month as a nurse educator and vendor fill-in. The nurse saw the co-worker at the hospital seven times within the next four months, with each meeting resulting in the nurse feeling physically ill and almost fainting. Some of these meetings were facilitated by the “gifting” doctor mentioned above who purposely scheduled them on the same shift. After another encounter with the co-worker, the nurse complained to human resources. She was removed from work after an independent third party concluded that she was a victim of abuse as a result of a hostile work environment. The nurse began collecting worker’s compensation as a result of post-traumatic stress disorder and was terminated a year later.

The court held that a jury could reasonably determine that the hospital was negligent of supervising its workers; the nurse was a victim of sexual harassment based on a hostile work environment; and the nurse was a victim of disability discrimination and failure to provide a reasonable accommodation. The court reasoned that the hospital had knowledge of the co-worker’s propensity of wrongdoing due to the nurse’s repeated complaints and it breached its duty of providing a safe work environment to the nurse by allowing her and the co-worker to continuously work together. The court stated that a hostile work environment for sexual harassment existed because the essence of the harassment, the nurse’s medical condition and records, was based on her gender. Lastly, the court stated that the hospital was aware of the nurse’s post-traumatic stress disorder but never attempted to accommodate her before the hospital terminated her employment.

Hyshaw v. Saint Francis Med. Ctr. Med. Exec. Comm. (Summary)

MEDICAL STAFF DUE PROCESS

Hyshaw v. Saint Francis Med. Ctr. Med. Exec. Comm., B249424 (Cal. Ct. App. June 30, 2014)

A California Court of Appeal upheld a lower court’s decision dismissing a neurosurgeon’s request to overturn a hospital’s determination that he did not qualify for reinstatement following a leave of absence, holding that a court will not review a hospital’s determination unless the aggrieved physician has properly exhausted his administrative remedies. The hospital’s medical executive committee found certain issues regarding the neurosurgeon’s professional performance. The Chief of Staff offered the physician two options: take a temporary leave of absence or be suspended. The neurosurgeon chose to take a temporary leave of absence.

He eventually sought reinstatement, but the hospital’s medical executive committee denied his request. As per the medical staff bylaws, the neurosurgeon sought review of this decision by a “judicial review committee,” and the review committee ultimately upheld the medical executive committee’s decision. The neurosurgeon again sought appellate review of this decision by the hospital’s Board of Directors, pursuant to the medical staff bylaws. However, after the neurosurgeon received confirmation that his appeal would be heard by the Board, the neurosurgeon failed to file his brief in a timely manner. The Board affirmed the medical executive committee’s decision and the neurosurgeon brought this action requesting the court to overturn the hospital’s decision not to reinstatement him.

The court of appeal affirmed the lower court’s holding that proper exhaustion of administrative remedies is a prerequisite to judicial relief and, because the neurosurgeon did not properly file a brief with the Board of Directors, pursuant to the medical staff bylaws, his claim was barred.

Green v. Springfield Med. Care Sys., Inc. (Summary)

WHISTLEBLOWER RETALIATION

Green v. Springfield Med. Care Sys., Inc., No. 5:13-cv-168 (D. Vt. June 24, 2014)

The U.S. District Court for the District of Vermont denied a nurse anesthetist’s motion for summary judgment, and denied in part and granted in part a hospital’s motions for summary judgment, holding that the question of whether the hospital terminated the nurse anesthetist in retaliation for reporting concerns about improper patient care practices was a question for a jury. Plaintiff, the nurse anesthetist, was an employee of defendant, the hospital. Over a two-year period, the nurse anesthetist reported three different co-workers to the hospital regarding what he perceived to be improper patient care. Additionally, the nurse anesthetist threatened to report these individuals to the Vermont Medical Board.

During this two-year period, the hospital experienced a decline in its surgical volume. Accordingly, as a result of cost-saving measures, the hospital terminated the nurse anesthetist’s employment. The nurse anesthetist brought suit claiming he was terminated in retaliation for reporting and threatening to report the alleged improper patient care. The court held that summary judgment for the hospital was inappropriate because even though the hospital had offered a legitimate business reason, a decline in surgical volume, for the nurse anesthetist’s termination, a jury could reasonably find that this reason was a pretext for his whistleblowing.

Goldenberg v. Woodard (Summary)

NEGLIGENCE

Goldenberg v. Woodard, Nos. 57232, 58151 (Nev. June 20, 2014)

The Supreme Court of Nevada affirmed in part and reversed in part a physician’s appeals from a judgment finding him negligent and fraudulent. The physician-defendant decided to expand his practice by offering colonoscopies after he attended a continuing medical education course. After being granted privileges at a surgery center with the condition that he was to be supervised by an experienced physician, the physician scheduled a colonoscopy with patient-plaintiff. The supervising physician did not show up at the scheduled time, but the physician proceeded nonetheless. The physician experienced difficulty during the procedure and left an instrument induced half-dollar-size hole in the patient’s colon. The jury found against the physician and the surgery center for claims of professional negligence and fraud.

The physician argued that the fraud and professional negligence claims fell under a statutory damages cap which limited the patient’s entire noneconomic damages to $350,000. The district court held that the statutory damages cap was only for professional negligence and it was to be applied separately to each defendant. The physician appealed, claiming the district court erred by upholding the jury’s finding of fraud against him, applying the damages cap separately to each defendant, and refusing to reduce the damages awarded against him.

The Nevada Supreme Court upheld the jury’s finding of fraud because there was substantial evidence that the physician materially misled the patient about his ability to perform the procedure. The court held that this specific claim for fraud was “qualitatively different” than a claim for professional negligence, so that the statutory cap did not apply to the fraud damages. Lastly, the court held that the statutory damages cap for professional negligence applied to the patient’s entire award for noneconomic damages, not to each separate defendant.