Stevens v. Saint Elizabeth Med. Ctr., Inc. (Summary)

SEX DISCRIMINATION

Stevens v. Saint Elizabeth Med. Ctr., Inc., No. 12-5243 (6th Cir. Aug. 29, 2013)

The United States Court of Appeals for the Sixth Circuit affirmed the grant of summary judgment in favor of a medical center for claims of, among others, sexual harassment, gender discrimination and retaliatory discharge under Title VII and the Kentucky Civil Rights Act, brought by a nurse, who was terminated because of her romantic relationship with the CEO of the Physician Group.  The court found that, although inappropriate actions occurred in the workplace, the CEO’s relationship with the nurse did not create a hostile work environment such that it unreasonably interfered with her work performance.

The nurse’s retaliatory discharge claims also failed because not only was the CEO also terminated, but he had no control over her discharge.  The court found that the medical center offered legitimate non-discriminatory reasons for her termination, including her in-office sex and the ongoing office disruption resulting from the relationship.

Hickman v. Catholic Health Initiatives (Summary)

PEER REVIEW IMMUNITY

Hickman v. Catholic Health Initiatives, No. 13CA0939 (Colo. Ct. App. Aug. 29, 2013)

Beginning in 1989, Colorado hospitals have been statutorily immune from damages in any civil action brought against the hospital due to a peer review decision.  On July 1, 2012, the law granting immunity was nullified by a new law.  The question before the Colorado Court of Appeals was which law applied when a credentialing decision and alleged injury occurred before the July 1, 2012 effective date of the new statute, but a negligent credentialing claim was not filed against the hospital until after that date.  The Colorado Court of Appeals rejected the hospital’s assertion of immunity holding that the current state statute, which nullifies the immunity with regard to credentialing decisions, applied retroactively.  The court found that the language of the current statute shows the General Assembly’s intent to apply the new statute retroactively and the retroactive application did not impair the hospital’s vested rights.  The court could not conclude that the retroactive application of the current state statute imposed a constitutional disability.  The court further held that the current statute is remedial, finding that the old statute did not provide immunity from suit but immunity from damages and that the hospital’s statutory immunity is not a vested right or liability.

U.S. ex rel. Ketroser v. Mayo Found. — Sep. 2013 (Summary)

FALSE CLAIMS ACT, QUI TAM

U.S. ex rel. Ketroser v. Mayo Found.
No. 12-3206 (8th Cir. Sept. 4, 2013)

A plaintiff’s attorney and three others filed a False Claims Act case based on information learned during discovery in a malpractice case, claiming that the hospital system billed Medicare for surgical pathology services it did not provide.  The United States Court of Appeals for the Eighth Circuit dismissed four relators’ qui tam action, holding that the billing codes applicable to the hospital system’s claims do not require written reports for surgical pathology services.  The court found that neither the Medicare regulations nor the American Medical Association Codebook require physicians using the CPT codes for surgical pathology services to prepare additional written reports, the kind which the relators claim the hospital system fraudulently failed to provide.

U.S., et al. v. Kaiser Found. Health Plan, Inc. (Summary)

FALSE CLAIMS ACT

U.S., et al. v. Kaiser Found. Health Plan, Inc., No. 12-cv-03896-WHO (N.D. Cal. Aug. 28, 2013)

An ambulance company claimed that Kaiser Health Plan’s refusal to pay an ambulance service for transporting Kaiser ESRD patients to and from dialysis treatments and instead required the ambulance company to seek reimbursement from Medi-Cal violated the False Claims Act.  The ambulance service also alleged that after its representative complained to Kaiser about this practice, Kaiser retaliated against the transport service by refusing to pay for services rendered and by excluding the ambulance company from bidding to provide future services.

The United States District Court for the Northern District of California granted in part and denied in part Kaiser’s motion to dismiss and motion to strike.  The district court dismissed the False Claims Act claim, holding that the medical transport services provider inadequately pled the FCA claim by failing to identify the law, rule or regulation the health plan undertook to comply with that “is implicated in submitting a claim for payment.”  The medical transport services provider also failed to identify what claims the health plan submitted that were “impliedly” false.  However, the ambulance company was given the opportunity to amend its complaint.

The court dismissed with prejudice the ambulance company’s state health and safety code claim finding that the law covers only patients and employees, whereas the provider is an entity, not “any other health care worker.”  Kaiser’s motion to dismiss the ambulance company’s unfair competition law claims was granted in part and denied in part and the court will also permit the ambulance company the opportunity to amend its state unfair competition law count.

Guinn v. Mount Carmel Health (Summary)

CIVIL RIGHTS

Guinn v. Mount Carmel Health, No. 2:09-cv-229 (S.D. Ohio Aug. 29, 2013)

A non-employed African-American cardiologist sued a hospital and others due to the summary suspension and subsequent non-renewal of his electrophysiology privileges.  The United States District Court for the Southern District of Ohio granted the hospital’s motion for summary judgment on the physician’s employment discrimination claims based on the fact that he was not an employee of any of the defendants.  However, the court will permit the cardiologist to attempt to prove a discrimination claim under both state and federal law based on:  (i) the existence of a contractual relationship with the hospital; (ii) that a similarly situated medical staff member who was a non-minority was treated more favorably; and (iii) other non-minority physicians were given notice of investigations and were given the opportunity to address the committee, while the cardiologist was not.

The court dismissed the cardiologist’s claims of defamation and tortious interference against the hospital because the hospital qualified for HCQIA immunity.  However, the court also ruled that the physician who initiated the investigation was not entitled to immunity.  The court held that the initiating physician allegedly reported information that was false, and a reasonable jury might conclude that his action fell outside of peer review protection.  The court also allowed the cardiologist’s defamation claim against this physician to stand, stating that a reasonable jury may find that the initiating physician’s alleged statements were not made in good faith.

Craig Sessions M.D., P.A. v. TH Healthcare, Ltd. (Summary)

RECRUITMENT AGREEMENT

Craig Sessions M.D., P.A. v. TH Healthcare, Ltd., No. 06-13-00010-CV (Tex. Ct. App. Aug. 28, 2013)

A hospital entered into a collections income guarantee recruitment agreement with a new recruit.  The agreement required the recruit to pay the hospital any collections in excess of the agreed upon amount.  The recruit’s collections were $267,418.10 in excess of the agreed upon amount.  When the recruit refused to pay this excess to the hospital, the hospital sued the recruit for the amount of this excess.  The trial court denied the recruit’s motion for summary judgment and granted the hospital’s motion for summary judgment in the amount of $419,504.63 in damages, interest, and attorney’s fees.

The Court of Appeals of Texas affirmed the lower court’s denial of the recruit’s motion for summary judgment but reversed and remanded the lower court’s grant of summary judgment in favor of the hospital.

The appellate court held that the recruitment agreement was unambiguous and could not be reinterpreted based on the recruit’s oral understanding of the terms of the contract.  However, the appellate court also held that there were issues of material fact that must be decided by a jury as to:  whether the recruit’s membership and ownership interest in a surgery center was an “existing practice” as defined in the contract which would have automatically changed the guarantee from a collections guarantee to a net income guarantee; and whether the hospital established that the recruit breached his obligation to provide a written notice of dispute as to the amount owed and when the breach occurred.

Farrow v. Saint Francis Med. Ctr. (Summary)

WRONGFUL TERMINATION (NURSE)

Farrow v. Saint Francis Med. Ctr., No. SC 92793 (Mo. Aug. 27, 2013)

The Supreme Court of Missouri affirmed in part and reversed in part a lower court’s grant of summary judgment to a hospital and a physician in a suit brought by a formerly employed  nurse, alleging violations of the Missouri Human Rights Act (“MHRA”) and other common law claims.

During her employment at the hospital, the nurse complained that the physician defendant sexually harassed her and made defamatory remarks about her work when she rebuffed his sexual propositions.  The hospital ultimately terminated the nurse, ostensibly for her “failure to meet customer service expectations.”  She sued.  The lower court granted summary judgment on all of the nurse’s claims.

On appeal, the Supreme Court of Missouri affirmed in part and reversed in part the lower court’s grant of summary judgment.  The court held that the nurse’s complaint filed with the Missouri Commission on Human Rights was timely.  The court also concluded that the hospital was not exempted from the scope of the MHRA as a corporation owned and operated by a religious or sectarian group because, as a non-profit corporation, the hospital was not “owned” by a religious group.  As such, the lower court erred in dismissing the nurse’s claims under the MHRA.

The nurse also asserted several common law claims, including a claim for wrongful discharge, against the hospital.  The court, in holding that the lower court erred in dismissing this claim, concluded that the nurse’s conduct fell within the public policy exception to the at-will employment doctrine.  That is, her allegation that her termination was because of her complaints that the hospital used non-nurses to insert catheter lines in violation of the state Nursing Practice Act constituted a wrongful termination based on a clear mandate of public policy as contained in a statute.

Marion Healthcare LLC v. S. Ill. Healthcare (Summary)

ANTITRUST

Marion Healthcare LLC v. S. Ill. Healthcare, No. 12-CV-00871-DRH-PMF (S.D. Ill. Aug. 26, 2013)

The United States District Court for the Southern District of Illinois dismissed an outpatient surgery center’s federal and state antitrust claims against a hospital and health insurer.  The surgery center asserted claims under the Clayton Act, Sherman Act, and Illinois Antitrust Act, alleging that the hospital, through its exclusive contracts with the insurer, prohibited the insurer from contracting with the surgery center and other providers of outpatient surgery services.

The hospital and insurer filed a motion to dismiss.  The court granted the motion with prejudice, for the Clayton Act claims, since the Clayton Act only applies to goods, as opposed to services.  According to the court, any goods provided by the defendants were “incidental” to the surgery center’s defined relevant markets of inpatient hospital services and outpatient surgical services.  With respect to the surgery center’s Sherman Act claims of exclusive dealing and illegal tying, the court, applying a rule of reason analysis, determined that the surgery center failed to define a plausible relevant market because it failed to include all potential buyers of inpatient and outpatient services, notably the federal government.

The court dismissed these Sherman Act claims against the hospital without prejudice, thus allowing the surgery center to amend its complaint.  The tying claim against the insurer was dismissed with prejudice because the surgery center was incapable of alleging that the insurer had market power in the tying and/or tied product (hospital services), considering the insurer was not a seller of these services.  The Sherman Act monopolization claim against the hospital was dismissed without prejudice because, once again, the surgery center failed to define a plausible relevant market.  The court’s ruling on the surgery center’s Illinois Antitrust Act claims mirrored those for the federal antitrust claims since federal courts use federal law to construe provisions of the Illinois Antitrust Law that are substantially similar to federal law.

Whipple v. Chattanooga-Hamilton County Hosp. Auth. (Summary)

FALSE CLAIMS ACT

Whipple v. Chattanooga-Hamilton County Hosp. Auth., No. 3-11-0206 (M.D. Tenn. Aug. 26, 2013)

The United States District Court for the Middle District of Tennessee granted a hospital’s motion for summary judgment in a False Claims Act suit brought by a consultant who was performing auditing services for the hospital.  The consultant claimed that the hospital improperly (1) billed patients for inpatient care when they should have been billed as outpatient or observation, (2) added observation charges to claims for outpatient surgeries, and (3) billed certain dialysis procedures as inpatient claims when they should have been billed as outpatient or observation.

In granting the hospital’s motion for summary judgment, the court held that the public disclosure provisions of the False Claims Act barred the consultant’s claims.  The court found that the consultant’s allegations were based on prior investigations and information compiled by, among others, the Office of Inspector General.  Moreover, the consultant was not an original source of the information underlying his claims because the information he collected during his engagement with the hospital was from other sources and included spreadsheets and medical records from past submissions.

Awwad v. Largo Med. Ctr., Inc. (Summary)

RACE DISCRIMINATION

Awwad v. Largo Med. Ctr., Inc., No. 8:11-cv-1638-T-24 TBM (M.D. Fla. Aug. 21, 2013)

The United States District Court for the Middle District of Florida granted a hospital’s motion for summary judgment in a suit brought by a disruptive Palestinian physician, alleging, among other things, race discrimination under 42 U.S.C. §1981.

After an investigation performed by an ad hoc committee of the Medical Executive Committee and a focused peer review, the physician was required, within 30 days, to obtain counseling for anger management and professionalism and continuing education in the area of fluid and electrolyte management.  The physician failed to do this.  Following a medical staff hearing and appeal, the physician’s privileges were revoked.  Subsequently, he sued, asserting various claims, including race discrimination under §1981.

In ruling on the hospital’s motion to dismiss, the court concluded that the physician failed to show that the hospital treated similarly situated, non-Palestinian doctors more favorably.  Specifically, the court found that the physician failed to offer evidence of any physicians who were disruptive and refused to comply with the hospital’s counseling and education requirements, but did not have their privileges revoked.  The court also observed that a disparaging statement by a member of the Medical Executive Committee that the physician was “practicing medicine the Palestinian way” was not enough to infer discrimination by a decision-maker.

Finally, the court held that the hospital offered a legitimate, non-discriminatory reason for revoking the physician’s privileges:  his failure to enroll in anger management counseling and continuing education courses.  Because the physician failed to show that this reason was a pretext for discrimination, his §1981 claim was dismissed by the court.