Harrison v. Munson Healthcare, Inc. (Summary)

PEER REVIEW PRIVILEGE

Harrison v. Munson Healthcare, Inc., Nos. 304512, 304539 (Mich. Ct. App. Jan. 30, 2014)

The Court of Appeals of Michigan affirmed in part a lower court’s holding that sanctions against a hospital and its attorney were appropriate, finding that a defense inconsistent with known but non-disclosed facts was presented during discovery and trial after a patient sued the hospital.  The patient had undergone thyroid surgery at the hospital, during which a cauterizing device had burned her arm.  During discovery and trial, the hospital claimed that no one in the operating room remembered how the patient’s arm was burned and no one was interviewed after the incident.  The hospital maintained that it was the hospital’s practice to always return the cauterizing device to its holster during surgery, asserting that the burn must have been an accident caused by the accidental “unholstering” of the device.  However, the hospital’s operating room manager had sent a letter to the patient about the incident and later testified that she would have interviewed operating room staff before sending the letter.  As such, the lower court had ordered the hospital to produce incident reports about the incident.  The report produced, which the hospital claimed was peer review protected and had not been provided to the patient as part of the discovery process, stated that the cauterizing device was laid on the surgical drape during surgery and the surgeon leaned against the patient at the device site.  Further, the device holder was on site but the device was not in the holder.

The court found that the incident report was only partially protected as a peer review document, reasoning that it did not fully meet the definition of peer review documents under state law, and thus the observations about the device being laid on the surgical drape were not privileged. Specifically, the court noted that the initial page of the incident report, which included the operating room staff member’s contemporaneous observations of the existing facts in the operating room at the time the burn was discovered, was not privileged; however, the remaining portion of the incident report that detailed the actual review process followed by the operating room manager was privileged as it reflected a deliberative review process.  The court also held that sanctions against the hospital and its legal counsel were appropriate because the hospital had prevented the patient’s “search for truth throughout discovery,” stressing that a portion of a report being privileged does not give the hospital the right to impede the discovery process and to maintain a defense that was inconsistent with known but non-disclosed facts.

Columbia North Hills Hosp. Subsidiary v. Bowen

Columbia North Hills Hosp. Subsidiary v. Bowen
2014 WL 345658 (Tex. Ct. App. Jan. 30, 2014)

Roberts v. Legacy Meridian Park Hosp., Inc. (Summary)

RACE DISCRIMINATION & ANTITRUST

Roberts v. Legacy Meridian Park Hosp., Inc., No. 3:13-CV-01136-SI (D. Or. Jan. 24, 2014)

The United States District Court for the District of Oregon granted in part and denied in part a motion to dismiss filed by a hospital and others in a suit brought by an African-American neurosurgeon.  The surgeon alleged, among other things, that a precautionary suspension and proctoring requirement imposed by the hospital violated Oregon’s anti-discrimination laws and state and federal antitrust laws.  According to the surgeon, the initiation of the peer review that resulted in the suspension and proctoring requirement was made by competitors on the hospital’s Medical Executive Committee and Surgery Department’s Executive Committee and was motivated by these individuals’ hostility arising from the surgeon’s success and race.

In partially denying the hospital’s motion to dismiss, the federal district court concluded that the state’s law prohibiting race discrimination applied to the hospital, as a “public accommodation,” and to the surgeon, as someone with “privileges” to use the hospital’s facilities.  Accordingly, the surgeon, as an independent contractor, could bring his claim for race discrimination under the state statute.  However, the surgeon’s unlawful retaliation claim under state law was dismissed, because “Oregon courts have consistently interpreted [the unlawful retaliation statute] to apply only in the employment context.”

The court also allowed the surgeon’s antitrust claims under state and federal law to proceed.  The surgeon alleged that the defendants’ suspension of his privileges was a conspiracy in restraint of trade which “reduced the quality of neurological surgery services available in the market.”  The court, in denying the defendants’ motion to dismiss the surgeon’s conspiracy claims, found that “a reduction in quality may constitute an antitrust injury, at least when allocative efficiency has adversely been affected.”

Ampuero-Martinez v. Cedars Healthcare Group (Summary)

AMENDMENT 7

Ampuero-Martinez v. Cedars Healthcare Group, Nos. SC11-2208 & SC11-2336 (Fla. Jan. 30, 2014)

The Supreme Court of Florida ordered a hospital to produce documents about adverse medical incidents for a malpractice lawsuit, finding that Article X, Section 25 of the Florida Constitution (“Amendment 7”) guaranteed patient access to such documents, even though they dealt with the care of other patients with different conditions.

St. Alphonsus Medical Center v. St. Luke’s Health System (Summary)

ANTITRUST

St. Alphonsus Medical Center v. St. Luke’s Health System., No. 1:13-CV-00116-BLW (D. Idaho Jan. 24, 2014)

The United States District Court for the District of Idaho ordered a health system to divest itself from a physician group it had acquired, finding that the acquisition violated the Clayton Act and the state anti-competition law.  The hospital system’s acquisition of a medical group made it the dominant provider in the area for primary care, giving it significant bargaining leverage over health insurance plans.  The Federal Trade Commission, the State of Idaho and a competing health care system brought suit against the health system, claiming a violation of antitrust laws.

The court subsequently unsealed detailed findings of fact and conclusions of law supporting its decision.  Among other things, the court rejected the defendant’s assertion that efficiencies associated with hospital-physician integration and the change from fee-for-service to risk-based reimbursement outweighed the possible anti-competitive effects of the high market share percentage in the market for physician services resulting from the acquisition.

McIntire v. Mich. Inst. of Urology (Summary)

EMPLOYMENT – RACE DISCRIMINATION

McIntire v. Mich. Inst. of Urology, No. 311599 (Mich. Ct. App. Jan. 23, 2014)

The Court of Appeals of Michigan affirmed a lower court’s granting of summary disposition in favor of a urology practice, finding that an African-American urologist had not proven that the termination of her employment violated the state’s civil rights act, the state’s whistleblower’s protection act, or public policy.

After numerous complaints from doctors, medical assistants, and patients regarding the urologist’s behavior, the employer’s practice manager and executive committee president met with the urologist to discuss the problems and to explain that the unprofessional behavior in question was unacceptable.  When the complaints continued, the members of the employer’s executive committee voted in favor of terminating the urologist’s employment, giving her one last chance to rectify her behavior.  After the urologist yelled at a medical assistant, her employment was terminated.

As the urologist was unable to establish a prima facie case of racial discrimination, the court found that there was no genuine issue of material fact that she was terminated from her employment for nondiscriminatory reasons.  The urologist failed to show intentional discrimination because she could not show that the individual who discharged her was predisposed to discriminate against African-Americans, or that this predisposition was being acted upon when her employment was terminated.  The urologist also failed to prove disparate treatment by being unable to show that she was a member of a protected class and that she was treated differently than members of a different class for the same or similar conduct.  Furthermore, the medical center had a legitimate, nondiscriminatory reason for the urologist’s termination, as the medical center’s staff and patients complained about her behavior and demeanor.

With regard to the urologist’s public policy claims, the court similarly found that the urologist could not prove that she was terminated due to her refusal to violate a law because the violation of the physician’s standard of care is not a violation of objective law.

Sanders v. Christus Santa Rosa PASC (Summary)

HOSTILE WORK ENVIRONMENT

Sanders v. Christus Santa Rosa PASC, No. SA-13-CV-250-XR (W.D. Tex. Jan. 17, 2014)

The United States District Court for the Western District of Texas denied an ambulatory surgical center’s (“ASC”) motion for summary judgment, finding that a genuine issue of material fact existed as to whether a registered nurse’s hostile work environment claim could be established. The surgical pre-op nurse claimed that after complaining that a surgeon sexually harassed her, she was given the choice of remaining at the facility on a different floor or transferring to a different facility.  The nurse then filed a lawsuit claiming she suffered a loss of hours after transferring to the other facility.

The court found that the nurse adequately exhausted her administrative remedies before the state’s Workforce Commission by notifying it that the surgeon was sexually harassing her and that she complained to her supervisor of the alleged conduct. The court further found that the nurse timely filed her charge of discrimination with the Workforce Commission. With regard to the nurse’s hostile work environment claim, the court found that there existed a genuine issue of material fact as to whether the alleged acts were severe or pervasive and whether the ASC exercised reasonable care to prevent and promptly correct any sexually-harassing behavior. Lastly, the court found that while the nurse may not be entitled to any lost wages because she voluntarily quit her job at the ASC, she may still be entitled to a jury question on whether she should be awarded compensatory damages for emotional pain or mental anguish.

Woodruff v. Hawai’i Pac. Health (Summary)

PHYSICIAN EMPLOYMENT; CORPORATE INTEGRITY AGREEMENT

Woodruff v. Hawai’i Pac. Health, No. 29447 (Haw. Ct. App. Jan. 14, 2014)

The Intermediate Court of Appeals of Hawai’i affirmed a lower court’s judgment in favor of a medical group parent company, finding that a physician had not shown that the lower court erred in granting summary judgment for the parent company.

The physician’s employment at two medical groups was terminated after the medical groups’ parent company voluntarily reported to the government, per an integrity agreement with the OIG, that the physician had submitted invalid claims for payment by third party payors. The physician subsequently formed a new medical group and brought suit against the parent company’s successor and others, alleging defamation, breach of the physician’s employment contract, and anticompetitive and unfair practices, among others.

With regard to the physician’s defamation claims, the court found that the lower court did not err when ruling that the parent company had a qualified privilege with respect to the alleged defamatory statements and that they had not abused this qualified privilege.  The court reasoned that the parent company complied with the integrity agreement and retained an independent review organization to audit its billing practices and verify compliance with applicable standards. The parent company self-disclosed after reviewing the results of the audit in order to ensure compliance with the integrity agreement.  Further, the medical group had a duty to discuss the results of the investigation with others in ensuring compliance with billing requirements and the integrity agreement.  All of the actions performed in order to ensure compliance with the integrity agreement were protected by a qualified privilege.

The court further found that the lower court did not err in granting the parent company summary judgment with regard to the physician’s breach of employment contract claim because the physician was an at-will employee. The medical groups and parent company provided the physician with many documents, which the physician signed, specifically stating that her employment was at will.

The court also held that the lower court did not err in granting summary judgment on the physician’s employment claims, finding that the physician was not entitled to a hearing on the decision to terminate her employment, as the bylaws and any due process hearing requirement apply only to clinical and membership privileges, not employment termination.

Tavilla v. HealthSouth Valley of the Sun Rehab. Hosp. (Summary)

AGENCY

Tavilla v. HealthSouth Valley of the Sun Rehab. Hosp., No. 1 CA-CV 12-0768 (Ariz. Ct. App. Jan. 14, 2014)

The Court of Appeals of Arizona found that a genuine issue of material fact as to the alleged agency relationship between a hospital and a physician precluded the hospital from obtaining summary judgment.  The court analyzed the two different kinds of potential agency relationships that could have existed between the hospital and the physician, finding that one, ostensible agency, needed further review.

The hospital employed the physician as a program director or as an associate medical director.  The physician also independently treated patients in his own pain management practice; he practiced in office space leased from the hospital.  A pain management patient filed a medical malpractice claim against the physician, and also named the hospital, asserting that the hospital was vicariously liable for the physician’s conduct because he was either an actual agent or an ostensible agent of the hospital.

The court found that the hospital could not be held liable for the physician’s allegedly negligent treatment, as there was no evidence of an actual agency between the hospital and the physician with regard to the physician’s pain management patients. For example, the hospital’s lease agreement stated that the space was to be used only as an office for the physician’s outpatient patients, further requiring the physician to maintain a distinction between his private practice and his hospital duties.

The court further found that a reasonable jury could find that the hospital’s actions or inactions induced the patient into believing that the physician was the hospital’s agent with regard to the patient’s pain management treatment. The hospital did not make clear (through signs or otherwise) that the physician was not acting on behalf of the hospital.  Nor did the hospital require the physician to notify his patients that there was no agency relationship between him and the hospital. The hospital also allowed the physician to use the hospital facilities and personnel in a manner that could lead a patient to believe the physician was an agent of the hospital.

Collison v. Iowa Bd. of Med. (Summary)

STATE MEDICAL BOARD ACTION

Collison v. Iowa Bd. of Med., No. 13-0477 (Iowa Ct. App. Jan. 9, 2014)

The Court of Appeals of Iowa affirmed a lower court’s ruling upholding the state Medical Board’s decision that a physician violated state law by knowingly making misleading, deceptive, untrue, or fraudulent representations to the Board, finding that the physician’s right to due process was not violated.

After being diagnosed with abdominal cancer, a long-term patient of the physician’s brought a malpractice suit against him, alleging failure to order diagnostic testing, and late detection of the cancerous mass. The physician’s insurance company then filed notice with the Medical Board regarding the malpractice action, and the Board subsequently sent the physician an investigative inquiry. The physician claimed that the patient saw his assistant, and that he had not been involved in the patient’s care, either directly or indirectly, in several years. The Board held that the physician had knowingly made misleading, deceptive, untrue, or fraudulent representations to the Board and, among other things, was ordered to pay a $3,000 civil penalty.

The physician asserted that while the record shows his response to the Board’s investigation as untrue, there was no substantial evidence that he intended to deceive the Board.  The court found, however, that the Board’s statutory and administrative code provisions do not require an intent to deceive or that someone was actually misled; a statement that is made knowingly and is untrue or misleading is sufficient.  As such, the court found that there was substantial evidence that the physician made a misleading and untrue representation to the Board.

The physician also claimed that his right to due process was violated by the Board due to the participation of three people in both the investigative and adjudicative process. The court found that while the Board’s actions were not ideal, they were not “unreasonable, arbitrary, or capricious,” and thus, the Board did not abuse its discretion.