Muzaffar v. Aurora Health Care S. Lakes, Inc. (Summary)

EMTALA

Muzaffar v. Aurora Health Care S. Lakes, Inc., No. 13-CV-744 (E.D. Wis. Nov. 27, 2013)

The United States District Court for the Eastern District of Wisconsin denied a hospital’s motion to dismiss, finding that a physician with privileges is an employee of a hospital for purposes of EMTALA’s whistleblower provision. The physician brought suit against the hospital claiming he was retaliated against because he reported patient transfers that he believed violated EMTALA. The court found that the purpose of EMTALA – to prevent “patient dumping” – would be frustrated if a physician who had staff privileges was not considered an employee for the purposes of the whistleblower provision. The court reasoned that enforcement of the EMTALA statute is dependent on those working in hospitals who are in the best position to observe violations and that a physician with privileges is in this ideal position to observe whether a hospital made an inappropriate transfer. Not deeming a physician with privileges an “employee” for the purposes of the whistleblower provision goes against the intent of the statute.

Pal v. Jersey City Med. Ctr. (Summary)

DENIAL OF APPLICATION FOR PRIVILEGES

Pal v. Jersey City Med. Ctr., No. 11-6911 (SRC) (D. N.J. Nov. 19, 2013)

The United States District Court for the District of New Jersey denied a motion for summary judgment filed by a hospital and others in a suit brought by a female, Indian, general surgeon, claiming that her application for privileges at the hospital was unlawfully denied.

The physician claimed that her application for privileges was denied based on negative information provided by two references from a cardiothoracic surgery residency which she did not complete.  She resigned from the residency after she was informed that her contract would not be renewed for a second year in the residency program.  The surgeon brought a separate suit against the residency program, claiming that the decision not to renew her contract was a retaliatory action for her complaints about staff members’ derogatory comments about her ethnicity and gender.  That case ended in a jury verdict for the surgeon.  However, the jury answered “no” to a question asking whether the surgeon proved that negative references were provided to other hospitals and, if so, if they were retaliatory in nature.  The hospital, in this case, argued that she was precluded from re-litigating this issue because it had already been decided in a separate case.  The court disagreed, holding that the jury’s answer in the earlier case did not clearly indicate that negative references were not provided.  According to the court, “[a]n equally plausible interpretation of the jury’s response is that even though [the surgeon] had proven that negative references were given, she did not demonstrate that they were given in retaliation for her complaints about discrimination.”

DeVore v. Heritage Provider Network, Inc. (Summary)

EXHAUSTION OF ADMINISTRATIVE REMEDIES

DeVore v. Heritage Provider Network, Inc., B244534 (Cal. Ct. App. Nov. 22, 2013)

The California Court of Appeal reversed a lower court’s dismissal of a medical corporation’s complaint in a suit brought against several insurers alleging that the medical corporation’s fee-for-service contracts with the insurers were improperly terminated because of economic credentialing.  The insurers terminated the contracts per the contracts’ without cause provision.  The medical corporation sued, asserting causes of action for, among other things, wrongful termination and violation of due process. The insurers sought dismissal of the complaint, arguing that the medical corporation failed to exhaust its administrative remedies.  The lower court dismissed the complaint.  The appellate court reversed the lower court’s dismissal, holding that “[t]here is no allegation within the complaint or the judicially noticed letter that any procedure existed at any time during the parties’ contractual relationship to contest the terminations.”

U.S. ex rel. Schubert v. All Children’s Health Sys., Inc. (Summary)

FALSE CLAIMS ACT – STARK LAW

U.S. ex rel. Schubert v. All Children’s Health Sys., Inc., No. 8:11-cv-01687-T-27EAJ (M.D. Fla. Nov. 15, 2013)

The United States District Court for the Middle District of Florida granted in part and denied in part a motion to dismiss filed by a number of related corporate entities in a health system in a False Claims Act suit brought by a former director of operations (“relator”) of the health system’s physician staffing entity.  The relator alleged that the health system aggressively recruited pediatric physicians and physician groups by paying them above fair market value (over the 75^th percentile salary range as determined by averaging a number of nationwide salary surveys). According to the relator, this violated the Stark Law and, in turn, violated the False Claims Act when the health system submitted claims to Medicare and Medicaid for services performed by the physicians.

The health system filed a motion to dismiss the relator’s third amended complaint, first arguing that the Stark Law does not apply to Medicaid claims.  The court disagreed, holding “[c]ertifying compliance with the Stark Amendment to ensure that CMS [makes Medicaid payments to the States] for Medicaid claims that violate the Stark amendment would be a violation of the False Claims Act in the same manner that certifying compliance for full reimbursement under Medicare would be.”  The court also concluded that the relator alleged with significant particularity that the physicians’ compensation was in excess of fair market value.  According to the court, “[r]elator endeavored to create a fair market value benchmark by drawing from the median of three nationwide salary surveys and creating a competitive salary range.  She then uses that information to allege a fair market value benchmark for all subspecialists identified in the complaint, and alleges that the salaries identified in the complaint exceed that benchmark.”  However, the court dismissed the relator’s claim against one of the individual physicians, noting that there were no allegations that supported the claim that his productivity bonus violated the Stark Law.  According to the court, “[t]here is…nothing inherently improper with volume based compensation arrangements, as long as they do not take into account the volume or value of referrals and the procedures are personally performed by the physician.”

Herrington v. Gaulden (Summary)

MEDICAL MALPRACTICE

Herrington v. Gaulden, No. S13G0577 (Ga. Nov. 25, 2013)

The Georgia Supreme Court reversed the judgment of the court of appeals denying a motion for summary judgment filed by the medical director of a hospital’s emergency department and held the medical director was not liable for the death of a patient whom he did not treat.  The patient suffered cardiac arrest and died while in the emergency department of the hospital.  Her daughter sued the medical director of the emergency department, alleging that he negligently failed to ensure that the patient’s treating physician and nurse were adequately trained in the implementation of the hospital’s chest pain protocol.   The Georgia Supreme Court instructed that summary judgment should have been granted to the medical director because he “had no responsibility or authority as medical director to control or direct ‘the manner and method’ of care rendered to [the patient] by her treating physician and nurse.”  Furthermore, there was no evidence that the medical director escalated the risk to the patient by his alleged failure to adequately supervise the training of the emergency department physicians and staff.

Jackson HMA, LLC v. Morales (Summary)

BREACH OF CONTRACT

Jackson HMA, LLC v. Morales, No. 2011-CA-01785-SCT (Miss. Nov. 21, 2013)

The Supreme Court of Mississippi affirmed a judgment entered in favor of an ophthalmologist in his breach of contract suit brought against a hospital that was attempting to recruit him, but reversed on the issue of damages and remanded to the trial court for a new trial solely on damages.

During attempts to recruit the ophthalmologist, the hospital provided him with a letter of intent outlining the hospital’s proposed offer.  This proposed offer had to be pre-approved by the hospital’s corporate parent.  The corporate parent did not approve the terms, but revised them.  These revised terms were sent to the ophthalmologist in a second letter.  This second letter did not use the phrase “letter of intent,” nor did it reference a requirement for corporate approval of the terms.  Moreover, the hospital informed the ophthalmologist, through an e-mail exchange with the recruiter, that the hospital received pre-approval from the corporate parent.  Subsequently and following an organizational restructuring, the corporate parent indicated that recruitment of an ophthalmologist was not a good return on investment and did not go through with the agreement.  The ophthalmologist sued, claiming that the hospital breached its contract with him.  After a trial, the jury returned a verdict in favor of the ophthalmologist and awarded damages of over $2,000,000.  The hospital appealed the denial of its post-trial motions.  The appellate court concluded that there was sufficient evidence for the jury to find that the second letter formed a contract.  However, the court reversed and remanded on the issue of damages because the award of lost income was based on a calculation of gross revenue as opposed to net income.

U.S. ex rel. McMullen v. Ascension Health (Summary)

FALSE CLAIMS ACT

U.S. ex rel. McMullen v. Ascension Health, No. 3-12-0501 (M.D. Tenn. Nov. 18, 2013)

The United States District Court for the Middle District of Tennessee granted a motion to dismiss filed by a healthcare system and others (“defendants”) in a False Claims Act suit brought against it by a relator who was employed by one of the defendants for only ten months.  The relator alleged that the defendants allowed non-accredited and/or non-certified technicians, not under the supervision of a physician credentialed in vascular technology, to perform noninvasive vascular diagnostic studies.  The district court dismissed the complaint with prejudice, holding, among other things, that the relator failed to identify the submission of any false claims by the defendants to the government.

Faulkner v. Mary Hitchcock Mem’l Hosp. (Summary)

WRONGFUL TERMINATION (RESIDENT)

Faulkner v. Mary Hitchcock Mem’l Hosp., No. 12-cv-482-SM (D. N.H. Nov. 13, 2013)

The United States District Court for the District of New Hampshire denied a partial motion to dismiss filed by a hospital and others (“defendants”) in a suit brought by a resident physician, alleging the defendants disclosed her medical disability to third parties without her consent and terminated her from the hospital’s residency program because they did not want to accommodate her disability.   The court held that the physician’s wrongful discharge claim was not displaced by the state’s anti-discrimination statute.   Accordingly, the defendants’ partial motion to dismiss was denied.

Bartow HMA, LLC v. Kirkland (Summary)

AMENDMENT 7

Bartow HMA, LLC v. Kirkland, No. 2D13-674 (Fla. Dist. Ct. App. Nov. 15, 2013)

The District Court of Appeal of Florida granted a hospital’s petition and quashed a lower court’s order directing the hospital to produce certain documents in a medical malpractice action brought by a patient.  The patient claimed she was injured when her surgeon made a last minute decision to convert a laparoscopic cholecystectomy to an open cholecystectomy.  During discovery, the patient filed multiple requests for documents.  The hospital argued that some of the documents were privileged under various state laws.  The patient argued that the documents should be made available to her under Florida’s Amendment 7, which permits patients access to records related to “adverse medical incidents.”  Without conducting a review of the documents, the lower court granted the patient’s requests.  On appeal, the appellate court observed that the patient’s requests for documents were not limited to adverse medical incidents.  As such, the lower court erred “in ordering a blanket production of all of the items identified in the [hospital’s] privilege logs without specifically determining whether those documents relate to adverse medical incidents within the meaning of Amendment 7.”

Brownlee v. State Med. Bd. (Summary)

REVOCATION OF STATE LICENSE

Brownlee v. State Med. Bd., No. 13AP-239 (Ohio Ct. App. Nov. 12, 2013)

The Court of Appeals of Ohio affirmed a lower court’s decision to uphold the state medical board’s revocation of a physician’s license.  The physician had criminal charges filed against him and his license was suspended in 2006 after it was discovered that he was writing prescriptions for opioids in the names of fictitious patients in order to obtain the drugs for his own use.  He entered into a consent agreement with the state board under which his license was reinstated pursuant to a five-year probationary period during which he had to meet certain conditions, including completely abstaining from the use of alcohol and the personal use or possession of drugs.  During the probationary period, the physician inappropriately obtained prescriptions for Vicodin and Percocet by asking residents under his supervision to write or call in prescriptions for a relative of the physician.  The state board permanently revoked the physician’s license following a hearing on this issue.  The decision was partially based on the physician’s own admission that he, on eight occasions, required residents to provide the prescriptions. The trial court overruled the physician’s assignment of errors, including, among other things, a claim that the trial court abused its discretion by relying on evidence given by the residents which contained inconsistencies.  The state appellate court affirmed the trial court’s decision, concluding that inconsistencies in the residents’ testimony “were not significant, particularly in light of the [physician’s] admissions.”