U.S. ex rel. Gale v. Omnicare, Inc. (Summary)

QUI TAM

U.S. ex rel. Gale v. Omnicare, Inc., No. 1:10-CV-00127 (N.D. Ohio Oct. 1, 2013)

The United States District Court for the Northern District of Ohio denied two motions from a prescription drug company attempting to bar a former employee’s qui tam action.  The former employee claimed that the drug company gave skilled nursing facilities illegal discounts in exchange for referrals of other patients with government-reimbursable drug costs.

The drug company moved to exclude all evidence of Medicare Part D and Medicaid reimbursements at trial, arguing that the former employee did not specifically plead these damages or provide sufficient notice that he was pursuing these damages.  The court found that while the former employee did not specifically state that he was pursuing these damages, he could seek them because the damages were based on the same wrongful conduct described in the complaint.  Also, the court found that the drug company was given sufficient notice that the former employee would be pursuing these damages.

The court also held that the former employee’s Medicare Part D and Medicaid damages were not barred by election of remedies, res judicata and release, based on the settlement in a previous qui tam case by another relator.  The court found that the drug company did not assert the election of remedies and res judicata defenses in its answer, as required, and although it did assert release, it withdrew that defense.  The court may grant leave to the drug company to assert one of the defenses “if justice so requires.”  The court held that justice did not require, since with only three weeks until the trial, the former employee would not have enough time to properly respond to the drug company’s amended complaint.

U.S. ex rel. Singh v. Bradford Regional Med. Ctr. — Sept. 2013 (Summary)

QUI TAM

U.S. ex rel. Singh v. Bradford Regional Med. Ctr.
Civil No. 04-186 Erie (W.D. Pa. Sept. 30, 2013)

The United States District Court for the Western District of Pennsylvania granted a physician qui tam relators’ fee application and ordered a medical center to pay attorneys’ fees and expenses based on the mandatory fee shifting statute in the False Claims Act.

The medical center did not argue that the amounts were unreasonable, but instead requested that the amounts be reduced based on hardship and/or other inequities.  The court denied the request, stating that the argument is not sufficient to permit the court to lower the award.

Also, the court denied the reduction even though another company was involved in the litigation with the medical center, since that company had yet to incur liability as it did not settle any claims for alleged violations of the False Claims Act.

Evans v. Jones (Summary)

ACCESS TO PEER REVIEW MATERIALS

Evans v. Jones, No. 12-0921 (W. Va. Oct. 4, 2013)

The Supreme Court of Appeals of West Virginia affirmed the circuit court’s dismissal of claims brought by an obstetrician against attorneys for a hospital for, among other things, violation of the state peer review privilege, violation of an affirmative duty to keep information confidential and malicious prosecution.

The state supreme court held that the litigation privilege, which bars claims for civil damages against an opposing party’s attorney if the attorney acted during the course of representation of an opposing party, barred all of the obstetrician’s claims.  It found that the attorneys, one of whom represented the hospital in previous litigation with the obstetrician, and the other who served as outside counsel, properly accessed and used the peer review information related to that litigation.

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

WHISTLEBLOWER/JURISDICTION

Muzaffar v. Aurora Health Care S. Lakes, Inc., No. 13-CV-744 (E.D. Wis. Oct. 4, 2013)

A physician brought a claim against a hospital for retaliation after he complained of patient transfers that he believed violated the Emergency Medical Treatment and Active Labor Act (“EMTALA”).  The physician, who had a contract with the hospital, alleged that while on call at the hospital certain transfers were made to the hospital without mandatory transfer paperwork in violation of EMTALA, and that the hospital retaliated against him after reporting those violations to the hospital’s medical executive committee.

The United States District Court for the Eastern District of Wisconsin found that there was a question whether the physician’s claim against the hospital for retaliation alleged a violation of the federal whistleblower statute.  The district court stated that the whistleblower protection, among other things, protects hospital employees from retaliation for reporting EMTALA violations.

The hospital argued that the physician was not a hospital employee, and the court found that raised a factual issue of jurisdiction.  Thus, the court found that additional information was required to determine whether it had jurisdiction in the case, and since the physician has the burden to establish jurisdiction, the court ordered the physician to provide additional information to respond to the factual challenge to jurisdiction raised by the hospital.

Flint Emergency Med., LLC v. Macon Cnty. Med. Ctr., Inc. (Summary)

BREACH OF CONTRACT

Flint Emergency Med., LLC v. Macon Cnty. Med. Ctr., Inc., No. 5:12-CV-105 (MTT) (M.D. Ga. Oct. 2, 2013)

The United States District Court for the Middle District of Georgia denied an emergency department group’s motion for summary judgment, and granted in part and denied in part a hospital’s motion for summary judgment, in a breach of contract claim and counterclaim.

The hospital and emergency department group entered into a contract in which the group would provide services for patients in the hospital’s emergency department, as well as a medical director, physicians, and midlevel providers for collections from professional fees billed.  The contract also provided for a base payment from the hospital to the emergency department group  as well as supplemental payments if patient volume fell below certain levels.  The hospital terminated the contract after approximately 1 ½ years, after which both parties alleged that the other had breached the contract – the hospital claimed that the emergency department group did not abide by the hospital’s policies and regulations and the group claimed that the hospital did not fulfill payment terms.

The emergency department group moved for summary judgment on the hospital’s counterclaim, arguing that the hospital cannot sue the group because the hospital unilaterally terminated the contract without notice and an opportunity to cure, as set forth in the contract.  The district court, in denying the motion, found that the contract did not set forth remedies in case of breach; rather, it set forth how the contract can be properly terminated, imposing notice and cure requirements as conditions precedent to a proper termination.  The court reasoned, per the agreement, that a party that terminates the contract without abiding by the notice and cure requirements breaches the agreement but does not preclude itself from asserting other claims for breach.  The court also reasoned that the contract did not require that either party give notice of a breach prior to suing on the alleged breach.

The hospital moved for summary judgment on the emergency department group’s claim of breach of contract, arguing that the group did not properly notify the hospital of the hospital’s breaching conduct.  The court found that the emergency department group had no affirmative obligation to notify the hospital, and denied this motion.  The hospital also moved for summary judgment on the emergency department group’s claim that the hospital breached the contract by employing several physicians and a nurse practitioner who had been employed by the group.  The court granted this motion, and found that while the contract stated that neither party could offer employment to each other’s providers, it specifically exempted providers who held privileges at the hospital prior to the contract.

Finally, the court held that whether the hospital owes the emergency department group outstanding subsidy payments must be resolved by a jury as it is a factual dispute.

St. Luke’s Magic Valley Reg’l Med. Ctr. v. Luciani (Summary)

HOSPITAL AFFILIATION – ASSIGNMENT OF RIGHTS

St. Luke’s Magic Valley Reg’l Med. Ctr. v. Luciani, No. CV08-30-S-EJL (D. Idaho Sept. 30, 2013)

The United States District Court for the District of Idaho granted in part and denied in part a law firm’s motion for summary judgment in a lawsuit filed by a health system against a law firm for legal malpractice.

The hospital hired the law firm to defend a wrongful termination and False Claims Act action alleging fraudulent Medicare billing by the hospital.  At some point during litigation, the law firm was terminated, and a new law firm hired, to represent the hospital in the litigation.  Then, after the former law firm was terminated, but before the litigation was settled, the hospital was purchased and a new health system created.  The terms of the purchase agreement stated that the new health system would assume the hospital’s liability in the litigation, and also contained a general assignment of all claims against third parties, including legal malpractice claims, known or unknown at the time of sale.

The new health system sued the former law firm for legal malpractice, and the law firm filed a motion for summary judgment, arguing that the legal malpractice claim was not assignable, that assignment of the claim was not valid, and that the new health system cannot prove that any of the damages were proximately caused by the former law firm.

The court held that the hospital’s legal malpractice claim was assignable to the new health system, since the purchase agreement was sufficiently broad to preserve any legal malpractice claims against a third party even if it was unknown at the time the agreement was executed or the closing documents were signed.  Also, the new health system stepped into the shoes of the hospital, so any alleged damages did not have to be incurred prior to the execution of the purchase agreement or closing.  However, the court found that the new health system will not be allowed to recover attorneys’ fees associated with the wrongful termination and False Claims Act litigation, because the duty to defend litigation was not foreseeable or proximately caused by the former law firm’s alleged malpractice.

Colo. Med. Soc’y v. Hickenlooper (Summary)

PHYSICIAN SUPERVISION – ANESTHESIA SERVICES

Colo. Med. Soc’y v. Hickenlooper, No. 12SC671 (Colo. Oct. 7, 2013)

The Supreme Court of Colorado granted a writ of certiorari as to whether a lower court erred in concluding that the state’s Nurse Practice Act allows Colorado’s governor to request an exemption from Medicare’s reimbursement regulations’ physician-supervision requirement, so that a certified registered nurse can administer anesthesia without physician supervision and the facility can obtain Medicare reimbursement.

Barker v. Columbus Reg’l Healthcare Sys., Inc. (Summary)

QUI TAM

Barker v. Columbus Reg’l Healthcare Sys., Inc., No. 4:12-CV-108 (CDL) (M.D. Ga. Oct  9, 2013)

The United States District Court for the Middle District of Georgia denied a former owner of a cancer treatment center’s motion to dismiss a qui tam action against him alleging that his sale of the cancer treatment center to a healthcare system violated the Anti-Kickback Statute and the Stark Law.

The district court found that the relator adequately asserted a claim under the False Claims Act by stating with particularity the circumstances constituting the basis for the false claim.

U.S. ex rel. Ortolano v. Amin Radiology (Summary)

QUI TAM

U.S. ex rel. Ortolano v. Amin Radiology, No. 5:10-cv-583-Oc-10TBS (M.D. Fla. Oct. 3, 2013)

The United States District Court for the Middle District of Florida granted in part and denied in part a private radiology company’s motion to dismiss a qui tam action brought by a former employee.

The former employee alleged that the radiology company failed to properly register a radiology center as an independent diagnostic testing facility, and instead, it registered the center as a physician practice group.  The district court, in granting this part of the motion, found that there is no requirement in Medicare that the provider enroll as one type of provider versus another type of provider and such a misclassification does not provide for any penalties.

The former employee also alleged that the radiology center submitted claims for MRI and PET procedures without the proper level of supervision, and that these procedures were performed by unlicensed and uncertified technicians.  The court granted this part of the motion, because the former employee’s specific identification of numerous procedures submitted for reimbursement that constituted false claims, coupled with his position as an insider working during the relevant time period with the ability to personally observe the events, was more than enough to satisfy the reliability of a claim for relief.  Also, the former employee not only discussed an MRI and PET scan submitted in violation of Medicare regulations, but also attached a spreadsheet listing over 300 claims submitted for reimbursement detailing the amount of charges, dates of procedures, and the amount reimbursed, all of which were enough to plead a False Claims Act violation.

Howland v. Wadsworth (Summary)

MEDICAL MALPRACTICE

Howland v. Wadsworth, No. A13A0927 (Ga. Ct. App. Oct. 9, 2013)

The Court of Appeals of Georgia affirmed a lower court’s finding that a physician, a physician’s assistant, and an emergency department physician group were liable for ordinary negligence and owed a patient damages of $5 million.

The patient sued the providers for ordinary negligence and gross negligence, claiming that the providers failed to provide her with appropriate medical treatment while she was in the emergency department of the hospital.  The patient was admitted to the emergency room as a “non-urgent” patient; however, she was experiencing a medical condition which included symptoms of significant pain and coldness in her feet, and the inability to walk.  The physician’s assistant ordered exams on the patient, and ruled out the possibility of deep vein thrombosis and acute arterial occlusion, and concluded that the patient had cellulitis which can be treated with antibiotics on a nonemergency basis.  After discharge from the emergency room, the patient had to be taken to the emergency department again the next day, where it was determined that her arteries behind both knees were completely blocked and she had to have both legs amputated below the knees.

The patient filed a medical malpractice lawsuit and, at trial, the providers moved for a directed verdict, claiming that since the lawsuit arose out of the provision of emergency medical care, she had to prove gross negligence, instead of ordinary negligence, pursuant to a state statute, and that she failed to do so.  The patient argued that the treatment was not emergency medical care, and that the jury should be allowed to consider ordinary negligence.  The trial court denied the providers’ motion, finding that whether it was ordinary negligence or gross negligence, or whether the care provided was emergency medical care, was up to the jury, and the court so instructed the jury.  The jury applied the ordinary negligence standard and awarded the patient $5 million.

The appeals court, in affirming the trial court, held:  the issue of whether a medical malpractice lawsuit involves emergency medical care is not solely a matter of law for the trial court; whether a medical malpractice claim involved emergency medical care is a question for the jury; and jury instructions did not unduly emphasize the ordinary negligence standard, and any perceived confusion in those instructions with regard to the applicable standard of care was resolved by verdict form.