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.”

Brintley v. St. Mary Mercy Hosp. (Summary)

RACE DISCRIMINATION

Brintley v. St. Mary Mercy Hosp., No. 12-2616 (6th Cir. Nov. 15, 2013)

The United States Court of Appeals, Sixth Circuit affirmed the district court’s grant of summary judgment in favor of a hospital and others, in a suit brought by a female, African-American surgeon alleging race discrimination under state and federal law.

The surgeon was required to undergo a proctorship after she accidentally cut two major blood vessels of an otherwise healthy woman in her early 20’s while performing a routine appendectomy.  A review of the surgeon’s practice also revealed that she had a high rate of surgical complications.  Because of this, the hospital imposed a proctorship, under which the proctors would have authority to intervene.  Moreover, the surgeon could not disregard the proctors’ directives or supervision.  The surgeon failed to comply with the proctors’ requirements on several occasions and, ultimately, her privileges were suspended.  The surgeon sued, claiming the hospital discriminated against her because of her race.  The lower court dismissed the case.  The appellate court affirmed, finding, for Title VII purposes, the surgeon was not an employee of the hospital.  The court also concluded that the medical staff bylaws did not create a contract, required to sustain a claim under 42 U.S.C. §1981.  Lastly, the court determined that under the state’s anti-discrimination law, there was no evidence of discrimination.  According to the court, “[the surgeon] alleges that [the hospital] imposed less restrictive proctorships upon two Caucasian doctors than it imposed on her.  But neither of the two doctors had the history of serious complications that [the surgeon] did.  Thus, neither of them are similarly situated to [the surgeon], and her [state law discrimination] claim therefore fails.”

Bluestein v. Cent. Wis. Anesthesiology (Summary)

DISABILITY AND SEX DISCRIMINATION

Bluestein v. Cent. Wis. Anesthesiology, No. 12-cv-322-bbc (W.D. Wis. Nov. 12, 2013)

The United States District Court for the Western District of Wisconsin granted an anesthesiology group’s motion for summary judgment in a discrimination suit brought by an anesthesiologist who was a full partner and shareholder of the group.

The anesthesiologist was injured while kayaking.  As a result of her injuries, she requested multiple accommodations, including an open-ended medical leave of absence.  The group denied the leave of absence and, ultimately, terminated the anesthesiologist.  The anesthesiologist sued, claiming, among other things, that she was discriminated against in violation of the Americans with Disabilities Act (“ADA”) and Title VII.  The court dismissed her ADA claim, concluding that the ADA only protects employees.  The court concluded that the anesthesiologist was an “employer” due to her being a shareholder and member of the board of the group.  Accordingly, she was not protected by the ADA.  The court also found that the anesthesiologist failed to present evidence that she was “disabled” under the ADA because her complaint “speaks only in the broadest terms of how [her] condition limits any of her major life activities.”  Moreover, her request for an indefinite leave of absence was not a “reasonable accommodation” under the ADA since she failed to provide evidence that the leave would restore her ability to work as an anesthesiologist.  The court also dismissed the anesthesiologist’s sex discrimination claim under Title VII based on the court’s finding that she was not an employee of the group.

U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr. (Summary)

FALSE CLAIMS ACT – STARK LAW

U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr., No. 6:09-cv-1002-Orl-31TBS (M.D. Fla. Nov. 13, 2013)

The United States District Court for the Middle District of Florida granted in part and denied in part a motion for partial summary judgment filed by the federal government in a False Claims Act suit against a hospital.

The government alleged that the hospital entered into employment agreements with oncologists that violated the Stark Law.  According to the government, the oncologists’ productivity bonuses violated the Stark Law because they were calculated by referencing the medical oncology program’s operating margin (or profit), which took into account services not personally performed by the oncologists.  The government filed a motion for summary judgment seeking a determination that the hospital violated the Stark Law and False Claims Act by billing Medicare for services provided as a result of referrals from the oncologists.  The court granted the motion with respect to the government’s Stark Law claims, finding that the productivity bonus did not meet the Stark Law’s bona fide employment exception, since it was not based on services personally performed by the oncologists (even though the productivity bonus the oncologists received was “divided up” based on services personally performed).  The court also rejected the hospital’s claims that the oncologists were not “referring physicians” simply because they were identified as the attending or operating physician on Medicare forms for processing facility fees.  According to the court, “to accept [the hospital’s] argument…one would have to assume that…both attending physicians and operating physicians are completely disconnected from any ‘request or establishment of a plan of care…which includes the provision of designated health services.’”  However, the court did not grant the government’s motion for summary judgment with respect to the amount of damages, because, among other things, the hospital’s contention that one of the oncologists did not receive a bonus in the relevant time period and could not have violated the Stark Law.

• Order 11/13/2013
• Order 11/18/2013
• Order 11/26/2013
• Denial of Motion to Reconsider 12/4/2013

Thompson v. LifePoint Hosps., Inc (Summary)

FALSE CLAIMS ACT/ANTI-KICKBACK STATUTE

Thompson v. LifePoint Hosps., Inc., No. 11-01771 (W.D. La. Nov. 8, 2013)

The United States District Court for the Western District of Louisiana granted a motion to dismiss filed by a physician and two hospitals in response to another physician’s complaint alleging False Claims Act (“FCA”) violations.  The court granted the motion, holding that the physician’s complaint failed to plead with particularity the alleged fraudulent conduct underlying the FCA claims.

In his complaint, the physician alleged that the hospitals violated the Medicare swing-bed requirements by not having a qualified therapeutic recreation specialist on staff and violated the Anti-Kickback Statute by providing a non-employee physician an apartment owned by the hospital at less than fair market rent.  His complaint also alleged that the physician defendant was performing unnecessary upper endoscopies.  However, the physician only made general allegations that the defendants submitted false claims to the government.

In granting the defendants’ motion to dismiss, the court found that the physician failed to plead his claims with sufficient particularity when he failed to, among other things, “identify a single claim that was actually submitted pursuant to the allegedly fraudulent schemes….”  The court also rejected the defendant physician’s motion for attorneys’ fees, finding that his unsupported contentions that the plaintiff physician was “mad that the Hospital sought to enforce [his] loan repayment obligations…agreed to in [his] Recruitment Agreement” did not establish that the suit was “clearly frivolous, clearly vexatious, or brought primarily for the purposes of harassment.”

Bailey v. Manor Care of Mayfield Heights (Summary)

PEER REVIEW PRIVILEGE

Bailey v. Manor Care of Mayfield Heights, No. 99798 (Ohio Ct. App. Nov. 7, 2013)

The Court of Appeals of Ohio reversed in part and affirmed in part a trial court’s ruling granting a motion to compel filed by an administrator of a deceased patient’s estate in a negligence suit brought against a nursing home.   The nursing home argued that the materials requested by the estate were protected by Ohio’s peer review and quality assurance privileges.  The trial court disagreed, granting the motion to compel.

On appeal, the state appellate court first concluded that federal regulations giving residents of long-term care facilities the right to access all of their records do not preempt the state peer review privilege.  The appellate court then concluded that “based on the evidence before it and given the lack of an in camera inspection of the documents, the trial court could not conclude as a matter of law that investigation reports were not subject to [the peer review and quality assurance] privilege….”  Accordingly, the appellate court ordered the trial court to conduct an in camera review of the documents and advised that the trial court require, among other things, that the nursing home file a detailed privilege log with the court.