Bastidas v. Good Samaritan Hosp. (Summary)

DISCRIMINATION – RACE

Bastidas v. Good Samaritan Hosp.,
No. C 13-04388 SI (N.D. Cal. July 7, 2014)

The United States District Court for the Northern District of California dismissed a Colombian-born surgeon’s lawsuit alleging racial discrimination against a hospital following his suspension after a patient death. The court had already dismissed the surgeon’s claims once, but allowed him the opportunity to amend his complaint. In dismissing his claims this time, the court held that the surgeon still failed to allege sufficient facts that suggest he was intentionally discriminated against based on his race. The court noted that while the surgeon’s complaint included many allegations of disparate treatment between him and white physicians, ultimately he failed to sufficiently show that the only two somewhat analogous situations that had occurred at the hospital, two surgeries performed by white physicians that resulted in the patients’ deaths, were actually similarly situated to him – in terms of similar surgeries being performed and that those physicians’ treatment of those patients was of the type that might have triggered peer review proceedings. The court also dismissed the hospital’s parent company from the lawsuit because the surgeon did not allege any facts that show the parent company directly participated in any wrongdoing.

Lin v. Dignity Health-Methodist Hosp. of Sacramento (Summary)

MEDICAL STAFF PRIVILEGES/WHISTLEBLOWERS

Lin v. Dignity Health-Methodist Hosp. of Sacramento,
No. S-14-0666 KJM CKD (E.D. Cal. July 11, 2014)

A cardiologist sued a hospital, alleging violations of various federal and state laws relating to discrimination, interference with economic interests, unfair trade practices, and whistleblower retaliation arising out of her summary suspension at the hospital. The U.S. District Court for the Eastern District of California granted the hospital’s motion to dismiss, concluding that the cardiologist had failed to show a reasonable likelihood of success on her claims.

This dispute emerged after the hospital placed the cardiologist on summary suspension for failure to perform a proper blood transfusion. The cardiologist demonstrated that this blood transfusion did in fact comply with the requirements of the medical staff, and alleged that, in reality, the suspension had been intended to retaliate against her for an earlier report she had submitted. In this report, known as a “Death Discharge Summary,” the cardiologist had opined that the department chair of internal medicine had breached the standard of care by performing a colonoscopy on a patient who had not been hemodynamically stable and who ultimately died. The cardiologist believed that this Death Discharge Summary was the actual reason for her suspension.

In responding to the cardiologist’s lawsuit, the hospital claimed protection for its actions under the state “anti-SLAPP” statute, which creates protections for certain kinds of free speech that are made in connection with issues under consideration in an official proceeding. Hospital peer review activities fall within the scope of the law and, therefore, plaintiffs have to overcome higher evidential burdens in order to bring a successful legal challenge. In this case, the court found that the cardiologist was unable to meet the burden for two reasons. First, since discharge summaries are a routine document prepared for all patients at the hospital, they cannot be used as the sole basis for a whistleblower retaliation claim which requires that a complaint or report be made to the hospital about a quality of care concern prior to the allegedly retaliatory action. Second, because neither the cardiologist nor her attorney attended the medical staff hearing that she had been afforded under the medical staff bylaws, the court concluded that her other claims were barred by a failure to exhaust all available remedies.

Kinghorn v. Gen. Hosp. Corp. (Summary)

AMERICANS WITH DISABILITIES ACT

Kinghorn v. Gen. Hosp. Corp.
No. 11-12078-DPW (D. Mass. July 1, 2014)

The U.S. District Court for the District of Massachusetts granted a Hospital’s motion for summary judgment, ruling that the Hospital’s termination of an employee with Asperger’s Syndrome (“Employee”) was not a violation of the Americans with Disabilities Act (“ADA”).

The employee was hired by the Hospital to work as a Bioinformatics Specialist. The job description sought someone with strong communication skills, who could work independently with very little supervision. During orientation, the Employee became very angry and hostile toward his trainer. Only then did he present the Hospital with a letter disclosing that he had Asperger’s Syndrome, and that he would need special accommodations in the future. In light of these requests, the Hospital spent considerable time and effort fashioning an organized program with clearly written instructions. Regardless, the Employee did not follow these instructions, ignoring many of the tasks assigned to him. Additionally, the Employee made his former trainer feel very uncomfortable, attempting to shadow her on multiple occasions despite numerous requests to cease contact with her. At one time the trainer’s discomfort level was so great that she locked herself in an office to create some distance from the Employee. Soon after this incident, the Employee was terminated.

All parties agreed that Asperger’s Syndrome constituted a disability under the ADA. However, the Hospital insisted that the Employee was terminated due to his inappropriate behavior, anger and aggression, and inability to perform the essential functions of the job. The court agreed with this, finding sufficient evidence that the Employee was unable to work successfully despite numerous efforts on behalf of the Hospital. The court therefore held that no reasonable jury would find the Employee able to fulfill the essential requirements of effective communication and the ability to work collaboratively or independently. Other employees went out of their way to provide accommodations for the Employee, yet he still struggled to work well in his position. Additionally, these considerable accommodations were deemed unlikely to be feasible on a long-term basis.

Brown v. Cooley Dickinson Hosp., Inc. (Summary)

SEXUAL HARASSMENT AND RETALIATION

Brown v. Cooley Dickinson Hosp., Inc.
No. 13-P-1057 (Mass. App. Ct. July 3, 2014)

The Appeals Court of Massachusetts affirmed a trial court’s decision to deny a judgment notwithstanding the verdict and award compensatory and punitive damages for sexual harassment and retaliation claims against a Hospital.

A nurse, who was a former employee (“Nurse”), brought claims against the Hospital for sexual harassment stemming from sexual advances and physical conduct of a sexual nature by a physician after the Nurse rejected the physician’s request for a date. The Nurse was subject to invasion of her personal space and unwelcome touching by the physician for months, despite her complaints to the Hospital. Subsequently, the Nurse was terminated a short time after she filed a complaint with the Massachusetts Commission Against Discrimination. The Hospital claimed that the Nurse was terminated for deviating from standards of good nursing practice and for failing to acknowledge mistakes in the care of a patient.

The court found that while the unwelcome conduct by the physician was not overwhelming, it was enough to substantiate claims of sexual harassment. The court also upheld the jury’s verdict that the Nurse’s termination was due to retaliation. Conflicting evidence existed regarding whether the Nurse was fired due to her complaint of sexual harassment or poor work performance. However, the jury verdict was not unsupported, as the jury was entitled to believe the Nurse’s theory of the termination rather than the Hospital’s.

Additionally, the court affirmed the jury’s determination that sufficient evidence existed to support the award for punitive damages. Because the Hospital did not act on the Nurse’s complaints, but instead made her continue to work with her harasser for months, the conduct was deemed harmful enough for the jury to award punitive damages. It was also alleged in trial that positive evaluations existed for the Nurse, but were taken out of her file to bolster the Hospital’s claims that she was terminated due to poor performance. The court noted that this inference may have added to the jury’s award of punitive damages.

 

Visiting Nurse Ass’n of Fla., Inc. v. Jupiter Med. Ctr., Inc. (Summary)

ARBITRATION

Visiting Nurse Ass’n of Fla., Inc. v. Jupiter Med. Ctr., Inc.
No. SC11-2468 (Fla. July 10, 2014)

The Supreme Court of Florida held that it is not necessary to determine the legality of a contract in order to enforce an arbitral award based on the contract. The arbitral award in question arose out of an arrangement between a Home Health Agency and a Hospital. Under their arrangement, the Home Health Agency agreed to purchase the Hospital’s in-house home health agency in exchange for the implementation of certain discharge planning procedures. The procedures applied specifically to patients requiring home health services post-discharge; in these circumstances, the Hospital was required to provide a predetermined list of available home health services in the area. If a patient did not express a particular preference for any of the agencies on the list, the Hospital would inform the patient of its relationship with the Home Health Agency.

After observing a decline in Medicare referrals, the Home Health Agency guessed that the Hospital was not complying with the agreement and was instead utilizing a rotation system for home health referrals. Although the Hospital initially denied that there was a rotation system in place, it was later confirmed, by a former discharge planner, that there was such a system.

The Home Health Agency responded by giving notice that it would not renew its lease with the Hospital for certain rental property. The Hospital subsequently gave notice that the Home Health Agency would no longer be permitted to lease space in its discharge planning department. The Hospital also notified the Home Health Agency that it would no longer notify patients of the Hospital’s relationship with the Home Health Agency.

When the Home Health Agency stopped making rent payments, the Hospital sued. Because their contract included an arbitration clause, the dispute was referred to an arbitration panel for resolution. The arbitration panel found that the Hospital had breached the contract by failing to make its staff aware of the discharge planning procedures, by terminating the office space lease agreement, and by announcing its intention to cease complying with the discharge planning procedures. The arbitration panel awarded the Home Health Agency $1.2 million in damages and an additional amount in interest, fees, and costs.

The Hospital tried to reopen the arbitration proceedings to allow testimony concerning the illegality of the panel’s interpretation of the contract, that as construed the contract would violate the state and federal anti-kickback statutes. The arbitration panel denied the Hospital’s motion and the Hospital then filed a motion to vacate the arbitration award in federal court on the same grounds. The Hospital also filed a motion to vacate the arbitration award in state court claiming that the panel had mistakenly construed the parties’ contract in a manner contrary to law and that the panel had exceeded its authority. Specifically, the Hospital argued that state and federal laws would prohibit it from entering agreements to “make, influence, and steer future patient referrals” to the Home Health Agency. Since the contract itself was unlawful, the Hospital argued that courts should refuse to enforce any arbitral award based upon it.

The Florida Supreme Court disagreed with the Hospital. It explained that when parties bargain for an arbitration clause, they consent to substitute a “tribunal of their own choosing” for the one provided and established by law. “[C]ourts cannot review the claim that an arbitrator’s construction of a contract renders it illegal.”

Montone v. Schuylkill Health Sys. (Summary)

CIVIL RIGHTS

Montone v. Schuylkill Health Sys.
No. 3:11-CV-2252 (M.D. Pa. July 3, 2014)

The U.S. District Court for the Middle District of Pennsylvania denied a hospital’s motion for summary judgment against a former employee’s Family and Medical Leave Act of 1993 (“FMLA”) retaliation claim. The employee filed her lawsuit after she was fired from her position as Director of Patient Accounts.

The Employee testified that her supervisor, the Vice President of Finance, prohibited her from taking time off except for an FMLA absence. The Employee was therefore forced to file for FMLA leave in order to cope with a new diagnosis of multiple sclerosis which caused her to suffer exhaustion, memory loss, and painful headaches. The Hospital contended that the Employee was actually discharged because of her failure to manage the billing and collection of patient accounts, causing the hospital to experience significant revenue shortfalls.

The court cited several factors in support of its decision to let the claim proceed to trial. First, the court explained that the timing of events was sufficient on its own to create an inference of FMLA retaliation. The Employee had taken FMLA leave on consecutive business days: a Friday and a Monday. The Hospital terminated her as soon as she returned on Tuesday. In addition, the court noted that the Employee had never been subject to any disciplinary actions or to any poor performance reviews during her three decade long tenure with the Hospital. Finally, the court highlighted the fact that the Vice President of Finance prohibited the employee from taking any time off absent a request for FMLA. This led the court to conclude that the hospital’s reasons for terminating the employee could have been a pretext for its retaliation against her for exercising her FMLA rights.

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.