U.S. ex rel. Sharp v. E. Okla. Orthopedic Ctr. (Summary)

QUI TAM/FALSE CLAIMS ACT

U.S. ex rel. Sharp v. E. Okla. Orthopedic Ctr., No. 05-CV-572-TCK-TLW (N.D. Okla. Oct. 29, 2013)  

The U.S. District Court for the Northern District of Oklahoma granted in part and denied in part an orthopedic medical practice’s motion for summary judgment against a terminated front desk supervisor who alleged violations of the False Claims Act (“FCA”) by the practice through upcoding preoperative examinations, miscoding of follow-up visits, waiving Medicare coinsurance and deductibles for certain patients, and billing patient accounts involving worker’s compensation and liability claims to Medicare instead of primary insurance first, resulting in violations of the Medicare Secondary Payer (“MSP”) rules.

The court primarily held that there was insufficient evidence to prove the required falsity and knowledge of these violations.  The front desk supervisor alleged that claim forms for follow-up visits misstated services provided by a specific physician’s usage of the diagnosis code for degenerative joint disease for follow-up visits.  The court found that the degenerative joint disease was the underlying reason why the patients required the procedure done by the physician and there was nothing false about the physician’s coding the visits that way.

With regard to incorrectly classifying a patient as an insurance only patient and not collecting coinsurance deductibles for his visits, the court found that although the medical center did, in fact, fail to disclose that it routinely waived the coinsurance and deductibles for the patient, this was a mere oversight in failing to change the status of the patient.

The argument that the medical center billed patient accounts involving worker’s compensation and liability claims to Medicare in violation of MSP rules failed because, given the confusion regarding the MSP regulations at the time, the medical center’s attempts at compliance were sufficient.

The court found that the front desk supervisor could proceed on the question of retaliatory intent for her discharge as the medical center not only had notice of her external whistleblowing activities but also proffered an implausible reason for her discharge.

U.S. ex rel. King v. Univ. of Tex. Health Sci. Ctr. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. King v. Univ. of Tex. Health Sci. Ctr., No. 12-20795 (5th Cir. Nov. 4, 2013)

The U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s dismissal of an employee’s False Claims Act (“FCA”) claims due to lack of jurisdiction and for failure to state a claim. The employee claimed that her supervisor had falsified research data results and had failed to obtain written informed consent from human research subjects. The employee alleged that the hospital failed to fully investigate and fraudulently covered up research.

The circuit court held that the university hospital was an “arm of the state” and not a “person” who could be liable under the FCA. The court noted that the hospital’s main source of funding was direct state appropriations, that the hospital was established by state law, and that previous cases as a state agency entitled it to immunity. The university hospital system as a whole is a statewide system that is concerned with education and research in the entire state of Texas. Further, the hospital does not have true autonomy because its board of regents, who are appointed by the governor and approved by the senate, must approve all contracts the hospital enters into. The court determined that this was sufficient to prove that the hospital was an arm of the state that enjoyed immunity, and dismissed the FCA claim for failure to state a claim.

The circuit court also affirmed the dismissal of the employee’s retaliation claim. As an arm of the state, the hospital was entitled to sovereign immunity that barred monetary relief under the FCA anti-retaliation provision.

Cashion v. Smith (Summary)

DEFAMATION

Cashion v. Smith, No. 121797 (Va. Oct. 31, 2013)

The Supreme Court of Virginia affirmed in part and reversed in part a lower court’s grant of summary judgment on an anesthesiologist’s claim of defamation. The anesthesiologist sued a trauma surgeon who accused the anesthesiologist of euthanizing a patient during surgery. The surgeon made these statements, in front of others, in the OR directly after the surgery and in the hallway.

The supreme court held that the lower court erred in determining that statements made by the surgeon that arguably did not accuse the anesthesiologist of euthanasia were non-defamatory.  The court stated insinuations may be defamatory, and the surgeon’s insinuations were something that could be proven true or false through expert testimony.

The court disagreed with the lower court’s judgment that the euthanasia statements were privileged as a matter of law. The court stated that while the communications were on the subject of the care of the patient and those who heard them had an interest in the level of care provided to patients, it was possible for this privilege to be lost. The qualified privilege can be lost through demonstration of malice, which is a determination for the jury.

The court also held that the surgeon’s statements were not rhetorical hyperboles, which are not considered to be defamatory under state law. The court stated that the statements could be reasonably interpreted as allegations of fact, as it was possible for a listener to assume that the anesthesiologist actually engaged in the conduct described by the surgeon.

Waddoups v. Noorda (Summary)

NEGLIGENT CREDENTIALING

Waddoups v. Noorda, No. 20120310 (Utah Nov. 1, 2013)

The Supreme Court of Utah held that a section of the state code was not applicable retroactively, which would have barred a patient’s claim.  The patient brought suit after she suffered an injury during a procedure.  The patient and her husband sued the hospital for negligently credentialing the physician who performed the procedure.  The hospital argued that the patient’s claim was barred by a law that prohibits lawsuits based upon negligent credentialing.  That law went into effect after the patient’s lawsuit was filed.

The supreme court held that the statute did not provide a clear indication of whether it was meant to be applied retroactively. State law only allows statutes to be applied retroactively if the statute explicitly states that it is to be applied in such a way. In order to make this determination, courts look exclusively at the statute’s plain language.  The court stated that this particular statute used only the present tense, and did not provide a clear indication that it was meant to apply to previous events. The patient’s lawsuit was allowed to stand because her case began before the statute went into effect.

Maa v. Ostroff (Summary)

FCA

Maa v. Ostroff, No. 12-cv-00200-JCS (N.D. Cal. Oct. 23, 2013)

The U.S. District Court for the Northern District of California granted in part and denied in part the defendants’ motion to dismiss an action brought by a physician alleging violations of the False Claims Act (“FCA”).  It was alleged that the defendants used unqualified or unsupervised residents and sedation nurses during endoscopic procedures.  The court dismissed the FCA counts but declined to dismiss the First Amendment retaliation claim.

Grove v. PeaceHealth St. Joseph Hosp. (Summary)

MEDICAL MALPRACTICE

Grove v. PeaceHealth St. Joseph Hosp., No. 69556-8-I (Wash. Ct. App. Oct. 28, 2013)

The Court of Appeals of Washington affirmed a trial court’s decision to overturn a jury verdict in favor of an injured patient.  The patient underwent heart surgery, and was monitored by a “team” that included surgeons and physician assistants.  The patient brought suit against the team and the hospital after the team failed to properly diagnose the patient’s post-surgery condition, causing permanent injury to the patient’s left leg.  The jury found the team and the hospital liable for the patient’s injury and awarded damages.  The trial court overturned the jury verdict, holding that there was no legal basis for the decision because the patient had not proved that a specific employee was negligent.

The appellate court held that the patient did not prove the relevant standard of care, stating that medical malpractice in the state was a statutory issue that required proving specific elements.  The patient failed to allege that the negligence of a specific healthcare provider was the cause of his injuries.  Further, the team as a whole, which included both surgeons and physician assistants, cannot be held to the same standard of care because the team did not belong to one single class.  The court held that the patient failed to prove that a duty existed or to which health care provider that duty fell.  The team as a whole could not be negligent, rather there needed to be a “negligent player on the team.”

The appellate court also rejected the patient’s argument that he sufficiently proved that the lead attending physician on the team was negligent in supervising the team.  The court held that the patient failed to demonstrate that the attending physician’s direct actions were the cause of his injury.  The court also noted that it would be impossible for the attending physician to negligently supervise the patient because he was on the other side of the country at the time and had left another physician in charge of the patient.  The attending physician was neither the employer nor the supervisor of the team, so he could not be held vicariously liable for their actions.

Steinberg v. Good Samaritan Hosp. (Summary)

HCQIA/NPDB

Steinberg v. Good Samaritan Hosp., No. 4:10CV3085 (D. Neb. Oct. 22, 2013)

The United States District Court for Nebraska denied a hospital’s motion for summary judgment.  A psychiatrist brought suit against the hospital for defamation, after the hospital filed a report with the National Practitioner Data Bank (“NPDB”) about the psychiatrist.  It was later determined by HHS that the report was unnecessary.  The psychiatrist claimed that the NPDB report was filed in retaliation for his criticism of hospital administration.

The district court held that the hospital’s report to the NPDB was a statement of fact – not opinion – and thus was not protected by the First Amendment.  The court stated that the hospital referenced a “finding” in its report, which would indicate that there was a finding of fact determination by the hospital that the psychiatrist failed to meet the applicable professional standard.  The hospital argued that this was a true statement that shielded it from the psychiatrist’s defamation claims.  However, the court stated that it could not make a determination at the summary judgment phase as to whether or not this statement was true.

Roberts v. Saint Thomas Health Servs. (Summary)

HCQIA/NPDB

Roberts v. Saint Thomas Health Servs., No. M2012-01718-COA-R3-CV (Tenn. Ct. App. Oct. 17, 2013)

The Court of Appeals of Tennessee affirmed a lower court’s grant of summary judgment in favor of a hospital against a surgeon’s claims of injury to his reputation, breach of contract, defamation of character, and tortious interference with business relations, based on the Health Care Quality Improvement Act (“HCQIA”) and the state peer review statute. The hospital’s medical executive committee (“MEC”) had suspended the surgeon’s clinical privileges after finding that the surgeon failed to comply with the hospital’s standards of care. The MEC’s suspension was conveyed to the surgeon through a letter, which also explained his procedural rights under the hospital’s medical staff bylaws. Upon receiving the letter, the surgeon requested a fair hearing but the parties reached an agreement before the hearing, after which he waived his right to a fair hearing. The agreement was that the surgeon would complete counseling and enroll in ongoing outpatient therapy and the hospital would restore his clinical privileges. The hospital also reported these proceedings with the National Practitioner Data Bank (“NPDB”), because the surgeon was suspended for more than 30 days.

The court found that while the hospital did not provide notice and a hearing, as required by HCQIA for immunity to apply, the report to the NPDB was made after the surgeon waived his fair hearing rights. The NPDB Guidebook suggests that a fair hearing that negated the recommendations of the MEC would not have required a report to the NPDB. The court reasoned that the surgeon’s alleged reputational damage cannot be separated from his decision to waive his right to a fair hearing. The court concluded that the fair hearing was the place to challenge the procedures the surgeon now complains were insufficient and dispute any allegations against him.

Sadeghi v. Sharp Mem’l Med. Ctr. Chula Vista (Summary)

MEDICAL STAFF HEARING

Sadeghi v. Sharp Mem’l Med. Ctr. Chula Vista, D060429 (Cal. Ct. App. Oct. 23, 2013)

A California appellate court upheld the denial of a physician’s petition for administrative mandate, in which the physician asked the court to compel a medical center to void a decision upholding the 2007 summary suspension of his privileges.  The physician argued that several aspects of his hearing and appeal process (which lasted over 35 sessions!) were unfair which justified having the medical center’s determination overturned.

The physician argued that the hearing officer improperly excluded evidence that he took steps after the summary suspension to address the MEC’s concerns about his mental health and professional competence, including obtaining an additional psychiatric evaluation and attending the PACE program.  The court rejected this argument, finding the hearing panel to have appropriately limited its scope to considering whether the MEC’s decision to summarily suspend the physician’s privileges was reasonable based on the information it had at the time of the suspension.  Therefore, evidence of mitigating actions that were later taken by the physician was irrelevant to the hearing panel’s deliberations.

The court also rejected the physician’s argument that the hearing panel was improperly composed, since it did not include three medical staff members, finding that the Bylaws specifically contemplated that when it was not feasible to utilize three medical staff members (such as here, where a number of individuals were eliminated from consideration due to competing financial interests and prior involvement in the matter), the panel could include individuals outside the hospital.

The court also rejected the physician’s argument that he had been improperly told he could not talk to hospital staff members about the hearing and this prevented him from identifying and preparing witnesses.  The court noted that the restriction on contact applied only to the physician, not his attorney, and was within the scope of the hearing officer’s duties since the physician’s prior contact with hospital employees had resulted in a number of complaints of harassment.

Andrew v. Range Reg’l Health Servs. (Summary)

HIPAA PRIVACY

Andrew v. Range Reg’l Health Servs., No. A13-0487 (Minn. Ct. App. Oct. 21, 2013)

The Court of Appeals of Minnesota reversed an unemployment law judge’s decision that a licensed practical nurse was ineligible for unemployment benefits because she engaged in employment misconduct (HIPAA violations) when she accessed her own medical records without first submitting a release to the medical records department.  The appellate court found that even if the health services center had a policy against accessing one’s own records, the nurse’s conduct was not sufficient misconduct to disqualify the long-term employee from receiving unemployment benefits since such benefits could be denied only for “intentional, negligent, or indifferent conduct…that displays clearly…as serious violation of the standards of behavior the employer has the right to reasonably expect of the employee.”  (The court declined to opine on whether it was appropriate to fire the employee).

In finding that the nurse’s conduct was insufficient to warrant a denial of unemployment benefits, the court noted that the hospital’s HIPAA training slideshow did not address employees’ access to their own medical records, the employee only accessed her record a few times during a week when she was attempting to contact her physician regarding lab results, and that no patient privacy was violated as a result of the employee’s access.