U.S. ex rel. Rector v. Bon Secours Richmond Health Corp. (Summary)

DISCOVERY/QUI TAM

U.S. ex rel. Rector v. Bon Secours Richmond Health Corp., No. 3:11-CV-38 (E.D. Va. Jan. 6, 2014)

The United States District Court for the Eastern District of Virginia granted in part and denied in part a health system’s motion for relief against a relator’s qui tam complaint. The health system had implemented a program to provide concierge services to one of its hospitals. The concierge service was to provide a wide array of services to doctors who referred their patients to the health system for diagnostic tests. The hospital had retained a temporary employment agency, which was co-owned by one of the health system’s managers, to provide personnel for the concierge service. The relator was employed at the employment agency and later hired by the hospital to be a concierge. Subsequently, the manager was fired by the hospital and he abandoned his employment agency, including computers containing sensitive information from past dealings with the hospital, and the hospital took no steps to secure the information from the agency, despite knowing that the business had closed. Later, the health system moved the court to order the relator to return all of the hospital’s data that he possesses.

The court found that the health system is likely to be prejudiced by the relator’s possession of the agency’s computers containing sensitive information shared by the health system and the agency. The information may not be reachable through the discovery process and it is difficult to determine whether the data is pertinent to the matter at hand because the court is unaware of the exact content of the data.

Sheikh v. Grant Reg’l Health Ctr. (Summary)

NPDB

Sheikh v. Grant Reg’l Health Ctr., No. 11-cv-1-wmc (W.D. Wis. Jan. 2, 2014)

The United States District Court for the Western District of Wisconsin ruled that a hospital was immune from liability for reporting a physician to the National Practitioner Data Bank (“NPDB”) because the report filed by the hospital accurately reflected why the hospital revoked the physician’s privileges.  The court also ruled that the hospital appropriately terminated the physician’s employment agreement following the suspension of his clinical privileges, and found that the physician was obligated to repay a $50,000 loan he had received from the hospital.

The physician brought suit against the hospital after it reported him to the NPDB, claiming that the hospital reported inaccurate information and acted with the intent to cause emotional distress. The physician also claimed that the hospital terminated him without cause.

The hospital asserted that it was entitled to immunity under the Health Care Quality Improvement Act (“HCQIA”) for the tort claims arising out of filing the report with the NPDB. The court granted summary judgment for the hospital on these claims, finding the hospital immune from claims seeking damages because the report filed by the hospital was not “false.”  The court observed that the hospital’s immunity did not depend on the merits of its underlying decision to revoke the physician’s privileges.  Instead, the question is whether the NPDB report accurately reflected the action taken.  Further, the court dismissed the physician’s claim for injunctive relief against the NPDB, finding that the physician failed to sufficiently assert a claim for such relief.

With regard to the physician’s breach of contract claim, his employment contract specifically stated that it could be terminated if his clinical privileges were suspended.  The physician failed to provide admissible evidence in response to the hospital’s motion for summary judgment showing that the contract should not be enforced.

The hospital also requested summary judgment on its counter-claim for breach of contract, which was premised on a loan agreement signed by the physician and then the hospital.  Among other things, the loan agreement provided that the hospital would advance the physician $50,000, which the hospital executed.  After the physician’s employment was terminated, the hospital demanded that the physician perform his obligation under the loan agreement and repay the principal and interest, which the physician has failed to do.  The court found that the physician knew, or should have known, that his employment could be terminated by the hospital as he executed an employment agreement with express provisions for termination of his employment on the same day he signed the loan agreement.  As such, no reasonable jury could find that the physician’s inability to pay back the loan was because he did not know or could not foresee the situation.  Thus, the court found that the physician breached the loan agreement.

Sheikh v. Grant Reg’l Health Ctr., No. 14-1449 (7th Cir. Oct. 14, 2014)

On October 14, 2014, the United States Court of Appeals, Seventh Circuit affirmed the decision of the district court.

Lopez-Aguirre v. Bd. of Cnty. Comm’rs – Summary

PEER REVIEW

Lopez-Aguirre v. Bd. of Cnty. Comm’rs, No. 12-2752-JWL-KGG (D. Kan. Dec. 20, 2013)

The United States District Court for the District of Kansas held that evidence relating solely to federal law claims would not be protected by the state peer review privilege, evidence relating solely to state law claims would be protected by the state peer review privilege, and evidence that related to both federal and state law claims would not be protected by the state peer review privilege.

Chudnovsky v. Chapman Med. Ctr – Summary

CONTRACT

Chudnovsky v. Chapman Med. Ctr., G047990 (Cal. Ct. App. Dec. 23, 2013)

A California Court of Appeal found that an arbitrator did not exceed his authority by finding that a no-cause termination provision in an agreement between plaintiff-physician and a defendant medical center was “null, void and ineffective” in light of a medical staff bylaws provision that allowed termination of membership and privileges solely for specific “for cause” reasons.

Miller v. Huron Reg’l Med. Ctr – Summary

PEER REVIEW

Miller v. Huron Reg’l Med. Ctr., No. CIV. 12-4138 (D. S.D. Dec. 20, 2013)

The United States District Court for the District of South Dakota held that a defendant hospital’s medical malpractice insurance carrier, which hired a physician-reviewer to conduct an external review of a plaintiff-physician, was required to produce the physician-reviewer’s report to the plaintiff-physician.

The plaintiff-physician wanted the hospital to produce the report, as well as the physician-reviewer’s time line notes and notes the claims representative made when discussing the review with the physician-reviewer.  The insurance carrier argued that the notes are protected by the state peer review privilege.

The court held that under the state peer review law, peer review proceedings are not subject to discovery, but that prohibition does not apply “to deny a physician access to or use of information upon which a decision regarding the person’s staff privileges or employment was based.”  The court also found that a privilege can be waived if the party that asserts the privilege puts in issue information protected by the privilege, which the hospital did in this case.  Finally, the court found that the privilege may be waived when invoked in an unfair way, such as using it as a shield and dagger, which the hospital did here.

Graboff v. Colleran Firm (Summary)

Graboff v. Colleran Firm, No. 10-1710 (E.D. Pa. Mar. 28, 2013)

The United States District Court for the Eastern District of Pennsylvania (“district court”) denied an orthopedic surgeon membership organization’s request for a reversal of the verdict. A surgeon who was working with a law firm on a medical malpractice case sent the firm a draft report summarizing his medical conclusions. The surgeon later learned that the law firm had removed the “draft” label from the report and used it to settle their malpractice suit. As a result, the membership organization suspended the surgeon’s membership for two years for providing false testimony. The surgeon brought suit and was awarded damages.

The district court held that it was reasonable for the jury to conclude that the organization’s article created a false impression of the surgeon. State law entitles a grievant to damages in situations where a publication is susceptible to inferences that cast the subject in a false light. The court believed that the organization’s article did in fact give the false impression that the surgeon was a dishonest and inaccurate expert. The organization was aware of the fact that the law firm misrepresented the draft report as a final report, although this information was not communicated in the article. Since the organization’s publication of the article jeopardized the surgeon’s livelihood as an expert, surgeon was entitled to damages.

Tidwell v. State (Summary)

WHISTLEBLOWERS

Tidwell v. State, No. 08-11-00322-CR (Tex. Ct. App. Dec. 4, 2013)

The Court of Appeals of Texas affirmed a lower court’s finding that a county attorney was guilty of misuse of official information, retaliation, and official oppression, punishing him with ten years of imprisonment, probated for ten years, a $4,000 fine and a 120-day confinement.       This fiasco began after two nurses were charged with felony misuse of official information and fired from their jobs at a critical access hospital after it was learned that they had filed an anonymous complaint with the medical board about the care being provided by one of the hospital’s doctors.  The nurses’ concerns included the doctor performing untraditional surgeries (such as suturing the rubber tip of a pair of scissors to a patient’s thumb and hammering a needle into a patient’s foot) when surgeries were not to be performed at the hospital.  Further, the doctor was selling homeopathic remedies to patients in lieu of continuing their traditional treatments and was not conducting tests to follow up on the effect on the patients’ conditions.

The nurses (who served as quality and compliance officers for the critical access hospital) had made several appeals to the hospital’s CEO and Board, in an attempt to have their concerns about the physician addressed.  But their efforts were continually blocked and, in fact, the CEO and medical staff amended policies to prohibit the nurses from attending medical staff meetings, sending cases for external review, and reporting quality concerns.

After the nurses sent their letter of concern to the state medical board, the doctor was notified that an investigation had been commenced.  He promptly contacted the CEO of the hospital and the county sheriff, a personal friend.  Both took steps to vindicate the doctor and to identify who was responsible for filing the complaint about him.  The sheriff took the opportunity to contact the state medical board to request a copy of the complaint letter and made untrue representations to the state board in order to receive that information (which otherwise would have been confidential and unavailable to him).  Further, utilizing the services of the county attorney, the sheriff obtained a warrant, seized the nurses’ computers, and found the letter to the board.  After learning the complaining nurses’ identities, he confronted them individually, read them their Miranda rights, and accused them of misusing the hospital’s internal information.

Ultimately, the county attorney decided to prosecute the nurses for “misuse of official information” by virtue of their report to the state medical board.  The county attorney persisted with the case despite being warned by colleagues that he should dismiss the case and despite the written urging of the executive director of the state medical board, who indicated that such action was contrary to the law.  In the end, the charges against one nurse were dropped before the trial, and the other nurse was found not guilty by a jury after less than one hour of deliberations.

One month after the nurse’s acquittal, the Texas Department of State Health Services cited the hospital for a number of deficiencies related to the concerns raised by the nurses.  By the next spring, that agency had imposed administrative penalties against the hospital.  By that summer, the medical board filed a formal complaint against the doctor, including nine allegations involving patient care issues and unprofessional conduct, ultimately resulting in the suspension/probation of his license.  Subsequently, a grand jury indicted the hospital CEO, sheriff, and county attorney for their role in inappropriately obtaining the complaint letter from the state medical board and using it to prosecute the nurses.  The CEO pled guilty, while the sheriff and county attorney were convicted.

Considering the county attorney’s appeal, the court found that the evidence was sufficient to support the lower court’s findings.

Ryliskis v. Uniontown Area Hosp (Summary)

RACIAL DISCRIMINATION

Ryliskis v. Uniontown Area Hosp., Civil Action No. 11-1517 (W.D. Pa. Dec. 5, 2013)

The United States District Court for the Western District of Pennsylvania granted summary judgment in favor of a hospital, holding that there was not enough evidence for an operating room technician to sustain a race-based hostile work environment claim.

The technician alleged that over a period of seven years she was harassed by coworkers based on her race and, in support of her claim that her work environment was hostile, pointed to a number of incidents, including one where a surgeon sang along to the radio when Lady Marmalade was playing, while allegedly dancing like a gorilla.  At the time, the technician complained about that incident, which led the hospital to conduct an investigation and ask the surgeon to apologize (though he denied dancing like a gorilla and said he was not aware that the song was about black people).  The hospital did not receive further complaints from the technician about the surgeon.

The technician alleged discriminatory conduct by several hospital employees as well, but, in a number of those cases, she had never reported the conduct to the hospital and, in others, she failed to provide any evidence that the conduct was racially motivated (for example, a doctor who almost pushed her flat on her face while heading to the intensive care unit with a bunch of nursing students and an operating room team leader who used a tone of voice that was belittling).

The district court held that the incident with the surgeon singing and dancing, if true, would be sufficient to sustain a claim of hostile work environment.  However, because the surgeon was not employed by the hospital and his conduct did not involve a tangible employment action, the hospital could not be held strictly liable for his conduct.  Therefore, the only way for the hospital to be held liable for the surgeon’s (a non-employee’s) conduct is if the technician showed the hospital was negligent in its control of her working conditions.  In other words, the technician would need to show that the hospital failed to take remedial action that was reasonably calculated to prevent further harassment.

The court held that because the technician was not subjected to further harassment by the surgeon after reporting the singing/dancing incident, she could not establish that the hospital’s handling of the situation was negligent.  Further, the court spoke favorably about the fact that the hospital had a formal complaint procedure, which was known to the technician, conducted an investigation in response to the technician’s complaint, informed the surgeon that his conduct was considered offensive by the technician, and implemented a hospitalwide nondiscrimination, anti-harassment training program.

Chambi v. WMC-SA, Inc. (Summary)

PEER REVIEW

Chambi v. WMC-SA, Inc., G046922 (Cal. Ct. App. Dec. 3, 2013)

The California Court of Appeal for the Fourth District affirmed a lower court’s judgment in favor of a hospital, finding that a neurosurgeon failed to carry his burden of showing that the hospital’s failure to honor his request to have a fellow neurosurgeon on a peer review panel in accordance with California law was prejudicial. The neurosurgeon had privileges at the hospital when charges were brought against him for substandard medical care. He timely requested that a fellow neurosurgeon be on the peer review panel; however, the request was rejected because all the neurosurgeons on the staff would have been biased and getting an outside neurosurgeon would have been too expensive. The peer review panel recommended termination of the neurosurgeon’s privileges and the hospital’s governing board adopted the recommendation.

The court found that the hospital had a mandatory obligation under California law to have another neurosurgeon on the peer review panel, where feasible. The hospital, not the accused neurosurgeon, had the responsibility of showing that the presence of a fellow specialist was not feasible, as the hospital is responsible for paying for the specialist and the hospital has access to information regarding whether it has the financial means to pay.

However, the court found that the hospital did not show that finding a neurosurgeon for the panel was not feasible because it did not provide reasons why it would have been too expensive to hire an outside neurosurgeon other than taking its word for it. Nevertheless, the court further found that the neurosurgeon made no effort to show that having a fellow neurosurgeon on his panel affected the ultimate outcome; thus, the neurosurgeon failed to prove that the hospital had acted with prejudice.

Stratienko v. Chattanooga-Hamilton Cnty. Hosp. Auth. (Summary)

PEER REVIEW

Stratienko v. Chattanooga-Hamilton Cnty. Hosp. Auth., No. E2011-01699-COA-R3-CV (Tenn. Ct. App. Nov. 21, 2013)

In the ongoing saga that began when a physician filed suit against a hospital claiming antitrust, federal due process, and equal protection rights violations based on the summary suspension of his clinical privileges following a physical altercation with another physician in the medical staff lounge, the Court of Appeals of Tennessee affirmed a trial court’s finding that a physician failed to prove any of the elements of his claim of intentional interference with business relations and affirmed the trial court’s granting of summary judgment on the physician’s other claims.

The hospital and physician had been in litigation for over nine years and the case had been to both federal and state courts before returning to this court. The physician argued that the lower court erred in granting summary judgment, in not allowing another amendment to his complaint and additional discovery, by excluding claims regarding the administrative hearing and in holding that he failed to prove his intentional interference with business relations claim.

The appellate court affirmed the lower court’s grant of summary judgment, holding that there were no disputed issues of fact left to be determined. The court stated that both federal courts had made the same findings of fact, and to go against the already made findings would be inappropriate. The grant of summary judgment was appropriate because there were no disputed issues of fact.    The appellate court also affirmed the denial of an amended complaint and additional discovery. The court again noted that, based on the length of time the case had been in litigation, a third amendment and additional discovery were unlikely to provide any additional information. Any new claims that the physician sought to add should have been known by the time of the second amended complaint. The facts of the administrative hearing were also confirmed, meaning the physician was prohibited from arguing that issue as well.

The appellate court affirmed the trial court’s dismissal of the physician’s intentional interference with business relations claim because he failed to prove any of the necessary elements. The court stated that at trial the physician failed to identify a specific third party with which the hospital interfered. Further, even if the physician were able to prove that the hospital interfered with a business relation, there was no evidence that the physician suffered damage as a result.