Murtagh v. St. Mary’s Reg’l Health Ctr. (Summary)

DUE PROCESS/ DEFAMATION

Murtagh v. St. Mary’s Reg’l Health Ctr., No. 1:12-CV-00160-NT (D. Me. Sept. 23, 2013)

The United States District Court for the District of Maine granted in part and denied in part a medical center’s motion to dismiss a physician’s claims of breach of contract, defamation and wrongful termination. The physician was hired as a locum tenens physician for a three-month position, but was terminated after only three weeks, pursuant to the contract between the medical center and its staffing agency which provided the medical center authority to remove from assignment any physician whose performance is reasonably found to be unacceptable for reasons of professional competence or personal conduct.  The medical center later gave a reference indicating that the physician had been terminated for unsatisfactory performance.

The district court rejected the physician’s argument that he was entitled to due process before being terminated from the medical staff since the bylaws provide such process for permanent physicians and, as a locum tenens, he was standing in the shoes of a permanent physician.  The court noted that the bylaws specifically stated that due process rights were not available to those who lose temporary privileges and dismissed the breach of contract claim.  The court also rejected the physician’s argument that he was a third party beneficiary of the contract between the medical center and the staffing agency and was entitled to some sort of notice prior to termination.  That contract specifically stated the procedures for the medical center to remove a physician from placement at the medical center and merely required notice to be given to the staffing agency, not the physician.

The court did not dismiss all of the physician’s claims.  First, the court held that the physician’s defamation claim would survive the motion to dismiss because the physician alleged sufficient facts to support such a claim (that a negative reference, which would tend to harm his professional reputation and was false, was published to third parties).  The court also allowed the physician’s claim for violation of a state employment practices statute to move forward, finding a question of fact existed as to whether the physician was an independent contractor or employee pursuant to state law (regardless of the fact that the contract stated that he was an independent contractor).

Robinson v. St. John Med. Ctr., Inc. (Summary)

RETALIATORY DISCHARGE

Robinson v. St. John Med. Ctr., Inc., No. 12-CV-109-JED-FHM (N.D. Okla. Sept. 25, 2013)

The United States District Court for the Northern District of Oklahoma denied a hospital’s motion to dismiss a nurse’s public policy tort claim, which alleged that she was terminated for complaining about improper medical care given to a patient. The nurse, who was also the RN case manager, noticed that a patient who had been admitted for sickle cell anemia was in great pain and was not being provided the minimum treatment.  This prompted her to report her concerns to the hospital’s resident physicians and her supervisor, who told her to stop managing the case.  Within a week or two, the nurse was terminated, with the explanation that she was terminated for undermining a physician.

She sued for discrimination pursuant to §1981, Title VII and the state antidiscrimination statute and also alleged a public policy tort (an exception to the at-will employment doctrine in cases where termination is contrary to a clear mandate of public policy as articulated in the constitution, a statute, or judicial law, the “public policy tort” provides a tort claim for an employee who is discharged for refusing to act in violation of an established and well-defined public policy or for performing an act that is consistent with a clear and compelling public policy).  The hospital sought dismissal only of the public policy tort, arguing that the nurse did not establish a clear mandate of public policy which was implicated in her termination.  The court disagreed, noting that the nurse cited nursing regulations which required proper care to be provided to patients and alleged that she was terminated for performing acts consistent with those regulations.  Those allegations were sufficient to allow the claim to move forward.

Royal Mile Co., Inc., v. UPMC (Summary)

ANTITRUST MONOPOLIZATION

Royal Mile Co., Inc., v. UPMC, No. 10-1609 (W.D. Pa. Sept. 27, 2013)

The U.S. District for the Western District of Pennsylvania dismissed the second amended complaint brought by several companies against a health care provider and health care insurer who were alleged to have conspired in violation of federal antitrust law to maintain their respective monopolies in Western Pennsylvania, thereby causing the companies to pay inflated premiums for health care coverage.

The companies alleged that the conspiracy between the provider and insurer allowed the provider to impose “monopoly rents” on the market by overcharging the insurer, knowing that the insurer would abuse its monopoly status and pass on excessive “monopoly rents” to its subscribers, the companies here. As such, the conspiracy forced policyholders, such as the companies that brought this lawsuit, to pay inflated, above-market rates for health insurance that would not exist but for the conspiracy.

The court found that the filed rate doctrine – which bars antitrust suits based on rates that have been filed and approved by federal and state agencies – barred the companies’ claims.  The court held specifically that a determination by the state insurance department that the rates charged by the insurer were not excessive, inadequate, or unfairly discriminatory is not subject to review by the court, nor can the court select a hypothetical rate that the department would have approved for the insurer in the absence of the conspiracy.  Accordingly, due to the filed rate doctrine, the companies would be unable to allege an estimated measure of damages, which is an essential element of a Sherman Act antitrust claim.

Finally, the court held that the companies’ claim for tortious interference with existing or prospective contractual relations was time-barred because failing to disclose the conspiracy between the provider and insurer was not sufficient to establish an affirmative independent act of concealment to toll the statute of limitations.

U.S. ex rel. Jones v. Univ. of Utah Health Scis. Ctr. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Jones v. Univ. of Utah Health Scis. Ctr., No. 2:11cv1200 (D. Utah Sept. 24, 2013)

The United States District Court for the District of Utah granted in part a hospital’s motion to dismiss, allowing the relator leave to amend the complaint to name as a defendant a state hospital employed physician in his individual capacity.

Parents of a patient brought a False Claims Act (“FCA”) claim against a state-run hospital after their daughter underwent three surgeries to repair her tendon and suffered postoperative complications. The parents alleged that the claims for their daughter’s surgeries were fraudulent because all of their daughter’s postoperative care was performed by a resident even though the surgical procedures (the fees for which included all post-operative care) were billed to Medicare and Medicaid under the guise of having been provided by the supervising physician.

The parents’ original complaint named as defendants the hospital and the supervising physician in his official capacity.  The court held that the claims against the hospital could not survive dismissal because they were state entities and, in turn, were not “persons” under the FCA.  Further, the supervising physician, while acting in his official capacity, would be standing in the state’s shoes and, in turn, could not be sued under the FCA.

However, the court went on to grant leave to the parents to amend their complaint to name as a defendant the supervising physician in his individual capacity. In doing so, the court rejected the physician’s argument that an FCA claim can only be maintained against a state actor who acts outside the scope of his official duties.  The court noted that allowing all state officials to the immune from suit under the FCA would be contrary to public policy.  Further, there is nothing in the FCA which provides an exception for state employees; the statute merely states that it applies to any person who submits a false claim or causes such a claim to be submitted.

Cahill v. Franciscan Health Sys. (Summary)

PRACTITIONER HEALTH/ DISABILITY DISCRIMINATION

Cahill v. Franciscan Health Sys., No. C12-5829 BHS (W.D. Wash. Sept. 27, 2013)

The United States District Court for the Western District of Washington denied a physician’s motion for a preliminary injunction. The physician applied for privileges on the hospital medical staff, but was informed that her application could not be completed until she finished her contract (related to the physician’s alcoholism) with the state physicians’ health program.  The hospital claimed that its VPMA had a phone call with the physician, during which she withdrew her application, while the physician claimed that she never withdrew her application and instead was “denied” privileges – resulting in her being unable to obtain another job or privileges.

In refusing to grant an injunction, the court first noted that the physician seemed to be seeking some sort of relief that the court had no power to grant (to have the application process deemed invalid and for the parties to go on as if nothing had ever happened).  The court also noted that there was a genuine issue of fact as to whether or not the physician withdrew her application. And, finally, though the physician claimed that she was prohibited from seeking other lucrative opportunities as a result of the hospital’s conduct, she admitted that she received substantial income in 2011 and 2012.

Ali v. Calumet Med. Ctr., Inc. — Sept. 2013 (Summary)

EMPLOYMENT DISCRIMINATION

Ali v. Calumet Med. Ctr., Inc.
No. 13-C-0766 (E.D. Wis. Sept. 23, 2013)

The United States District Court for the Eastern District of Wisconsin granted in part and denied in part a hospital’s motion to dismiss a physician’s claims for racial discrimination, invasion of privacy, and breach of contract.

The physician, a Pakistani national, claimed that he was treated differently than similarly situated white employees while employed by the hospital. The physician alleged that upon joining the hospital staff, he was given $20,000 in loan forgiveness and a $10,000 signing bonus and was told that that was the maximum amount allowed; however, white medical providers were given $100,000 for loan forgiveness and a $50,000 signing bonus. He also claimed that he was required to work more days than white providers. He asserts that he was terminated in part because of his complaints to the leadership and that white providers were not terminated for their complaints.

The court allowed the physician’s §1981 discrimination claim to proceed, finding that the physician had sufficiently pleaded that he was treated differently than white medical providers in various conditions of employment by identifying the decision-makers who had discriminated against him and identifying the instances. The court also found that the physician had alleged sufficient facts to state a claim for breach of contract against the hospital because the alleged facts raise the inference that the reason the physician was fired, for complaining about hospital procedures, was not a sufficient basis to terminate his contract. Furthermore, he was not provided the required 90-day notice. The court rejected the physician’s invasion of privacy claim, reasoning that the physician was speculating about what was done with information that he was seeing a psychiatrist because the physician admitted he had no knowledge regarding the facts.

Moelleken v. Jones (Summary)

PRIVILEGES THAT CROSS SPECIALTY LINES

Moelleken v. Jones, 2d Civil No. B242545 (Cal. Ct. App. Oct. 1, 2013)

The Court of Appeal of California refused to grant a new trial for a physician and his medical group in a lawsuit they brought against a hospital that decided not to establish a specific call panel for emergency room patients needing spinal surgery, thereby leaving those patients to be treated by the trauma call physicians (neurosurgeons) and excluding the possibility that those patients would be referred to orthopedic spine surgeons.

The physician (an orthopedic spine surgeon) and his group alleged that the hospital and neurosurgery group unlawfully conspired to restrain trade in violation of the antitrust laws and engaged in unfair business practices under state law.  At trial, the jury returned a verdict in favor of the hospital and neurosurgeons on the antitrust claims and the judge rendered a verdict in favor of the hospital and neurosurgeons on the unfair business practice claim.  The physician and group appealed, arguing that the court inappropriately excluded testimony of two of their witnesses and failed to address improper statements made by a juror and by the hospital’s counsel.

The appellate court upheld the trial court’s procedural conclusions and affirmed the decision not to grant a new trial. Perhaps more importantly, in reciting the facts of the case, the appellate court noted the many steps taken by the hospital to decide whether to create a spinal call panel, including refusing to blindly follow an orthopedic department vote to allow orthopedic spine surgeons to participate in a call panel for spinal patients, establishing a task force not controlled by orthopedic surgeons or neurosurgeons to decide whether a separate call panel would be appropriate, and disregarding the neurosurgeons’ threats to renegotiate their call agreement if orthopedic surgeons were added to the call list.  These are exactly the type of procedures we recommend when managing clinical privileges that cross specialty lines.  Learn how to manage tough clinical privileging like this at The Complete Course for Medical Staff Leaders or The Credentialing Clinic.

Hosp. & Healthsystem Ass’n of Pa. v. Commonwealth of Pa. (Summary)

GOVERNMENT MALPRACTICE FUND

Hosp. & Healthsystem Ass’n of Pa. v. Commonwealth of Pa., Nos. 20 MAP 2010, 21 MAP 2010 (Pa. Sept. 26, 2013)

The Supreme Court of Pennsylvania, in determining the constitutionality of legislation, Act 50 of the Fiscal Code, which mandated a one-time transfer of money from the Medical Care Availability and Reduction of Error (“MCARE”) Fund to the Pennsylvania General Fund, held that legislative bodies have the authority to control special funds to serve the changing needs of the government, specifically when surplus monies continue in the fund after the accomplishment of its purposes.  Whether the transfer of money here represented such a surplus in the MCARE Fund at the time Act 50 was passed had yet to be determined.

In this case, the MCARE Fund, although labeled a “special fund” requiring providers to pay substantial monetary assessments and providing a secondary layer of liability coverage to providers, was a trust fund in nature whose monies were held to satisfy judgments against the health care providers such that the providers retained a vested entitlement to have the money utilized in the manner directed by the MCARE Act. Therefore, although the amendment to the Fiscal Code transferring $100 million from the MCARE Fund to the General Fund implicated the providers’ due process rights, the question of the legislation’s constitutionality required further factual development.

• Majority Opinion
• Dissenting Opinion
• Dissenting Opinion

Glunk v. Greenwald (Summary)

STATE BOARD OF MEDICINE

Glunk v. Greenwald, No. 2052 C.D.2012 (Pa. Commw. Ct. Sept. 19, 2013)

The Pennsylvania Commonwealth Court reversed in part a lower court’s dismissal of a physician’s claims against an attorney who worked for the state’s Board of Medicine. The physician claimed that the attorney used his resources and access to confidential peer review information as counsel to the Board to assist a family with a medical malpractice suit against the physician and help the family oppose the physician’s bankruptcy petition. (The malpractice suit involved the same case being reviewed by the state Board of Medicine.)  A lower court held that the attorney’s assistance was part of his official duties as a state attorney; therefore, the physician’s suit was barred by sovereign immunity.

The commonwealth court reversed in part, holding that the facts pled indicated that some of the attorney’s actions involved actions taken outside of his official capacity. The court stated that providing confidential and privileged information to the family was not the type of service the attorney was hired to perform for the state Board.

Lipka v. Advantage Health Grp., Inc. (Summary)

FALSE CLAIMS ACT/QUI TAM ACTIONS

Lipka v. Advantage Health Grp., Inc., No. 13-CV-2223 (D. Kan. Sept. 20, 2013)

The nursing director of an assisted living center (“ALC”) filed suit against the ALC and others alleging that the ALC unlawfully fired her in violation of the whistleblower protections of the federal False Claims Act (“FCA”).  The U.S. District Court for the District of Kansas granted in part and denied in part the ALC’s motion to dismiss the case.

The nursing director notified the ALC’s administration that the ALC had to obtain a federal regulatory waiver in order for ALC staff to obtain blood samples from residents by use of finger sticks to be tested via glucometer.  The nursing director stated that she had informed administration that the waiver would cost $150, and that administration had rejected the need for a waiver.  The nursing director informed administration that she had previously filed an FCA lawsuit against a former employer over the same waiver issue.  The ALC fired the nursing director four days later.

The district court held that the nursing director had sufficiently stated facts that supported a claim of FCA whistleblower protection against retaliation. She had engaged in a protected activity, acted in a sufficient manner with the administration to raise the inference that she was investigating matters that could reasonably lead to a viable FCA case, and alleged facts that created a reasonable inference that a causal connection existed between her alleged protected activity and the ALC’s determination to fire her four days later.

Accordingly, the court rejected the ALC’s motion to dismiss the case, but did allow for the dismissal of certain individuals as defendants.