Rochling v. Dep’t of Veterans Affairs (Summary)

HCQIA

Rochling v. Dep’t of Veterans Affairs, No. 12-2828 (8th Cir. Aug. 8, 2013)

The Eighth Circuit U.S. Court of Appeals affirmed a lower court’s grant of summary judgment in favor of a VA hospital, holding that the hospital did not err in reporting a physician to the National Practitioner Data Bank after settling a medical malpractice suit. The hospital determined that its settlement was also “for the benefit of” the physician, which does require a Data Bank report.  The court stated that the report, which simply indicated that a payment was made on behalf of the physician, was neither a rebuke or reprimand of the physician nor a formal disciplinary step that would have required notice and hearing.   The physician failed to demonstrate how this report was a deprivation of a constitutionally protected interest and the court dismissed the due process claim. The circuit court also granted summary judgment on the physician’s claim that the hospital engaged in inadequate fact-finding procedures.

Kimbrell v. Mem’l Hermann Hosp. Sys. (Summary)

AGENCY/INDEPENDENT CONTRACTOR

Kimbrell v. Mem’l Hermann Hosp. Sys., No. 14-12-00108-CV (Tex. App. Aug. 1, 2013)

The Court of Appeals of Texas affirmed a lower court’s grant of summary judgment in favor of a hospital, holding that it could not be held liable as to a patient’s allegations of medical negligence of an independent contractor – the surgeon who operated on him. The court stated that while hospital employees appeared in an infomercial with the surgeon, the infomercial did not explicitly state that the surgeon was an agent or employee of the hospital.  Further, the patient signed multiple consent forms that indicated that the physicians at the hospital were independent contractors and not agents or employees of the hospital.

Wascher v. S. Cal. Permanente Med. Grp. (Summary)

Arbitration Agreements

Wascher v. S. Cal. Permanente Med. Grp., G047042 (Cal. Ct. App. July 29, 2013)

The Court of Appeal for the Fourth District of California affirmed a trial court’s order denying a medical group’s motion to compel their former employee, a surgeon, to arbitrate his claims against them. The court found it was impossible to determine whether this dispute was one which they agreed to arbitrate.  Although the surgeon’s employment contract clearly specified that the medical group’s official rules and regulations contained the applicable dispute resolution procedure and were adequately incorporated into the employment contract, the medical group solely relied upon another dispute resolution contract signed by the surgeon, which omitted those rules and regulations.  The court found that the medical group failed to establish what the parties agreed to arbitrate and the dispute resolution agreement relied upon by the medical group specified that it would not supersede any dispute resolution provision within the surgeon’s employment contract.

U.S. ex rel. Stratienko v. Chattanooga-Hamilton Cnty. Hosp. Auth. (Summary)

False Claims Act – Qui Tam

U.S. ex rel. Stratienko v. Chattanooga-Hamilton Cnty. Hosp. Auth., No. 1:10-CV-322 (E.D. Tenn. July 29, 2013)

The United States District Court for the Eastern District of Tennessee granted in part and denied in part a medical center’s motion to dismiss allegations of false claims and violations of a Corporate Integrity Agreement.  The court found that there had already been a number of public disclosures of the potentially fraudulent activity occurring at the medical center, and much of the relator’s complaint was based on publicly disclosed information.  Based upon the public disclosure provision, the court dismissed the False Claims Act claims.   Furthermore, the court found that the relator failed to establish that she was an original source of the information since she never claimed to have direct knowledge of the fraudulent activity. The court granted the relator leave to amend her claim that the medical center violated its Corporate Integrity Agreement.

U.S. ex rel. Emanuele v. Medicor Assocs (Summary)

Fraud and Abuse

U.S. ex rel. Emanuele v. Medicor Assocs., C.A. No. 10-245 Erie (W.D. Pa. July 26, 2013)

The United States District Court for the Western District of Pennsylvania denied a motion to dismiss a cardiologist’s claims against a corporation that provides cardiology services, a hospital and several physicians for violations of the Stark Act, the Anti-Kickback Statute and the False Claims Act.  The court found that the cardiologist alleged with specificity the nature of the fraudulent scheme, the financial arrangements and inducements among the parties that gave rise to the cardiologist’s belief that fraud occurred.  In addition, the court determined that the Wartime Suspension of Limitations Act does not allow for private False Claims Act claims and, therefore, ruled that some of the cardiologist’s allegations were time-barred.

Al-Jurf v. Iowa Bd. of Med — July 2013 (Summary)

State Licensing Board

Al-Jurf v. Iowa Bd. of Med.
No. 12-0293 (Iowa Ct. App. July 24, 2013)

The Court of Appeals of Iowa affirmed a lower court’s denial of a physician’s petition for judicial review, finding no merit in the physician’s claims on appeal and supporting the medical board’s finding that the physician’s interactions with his colleagues constituted unethical conduct. The court applied the medical board’s rules and reasoned that the physician created a hostile educational environment, failing to make the benefits of his knowledge and attainments available to the residents under his training. The court further found that by threatening, demeaning, bullying, and interfering with the abilities of others to do their work, the physician’s actions failed to uphold dignity and honor in the medical profession. The court also agreed with the lower court in finding that the physician failed to meet his burden of showing that the medical board abused its discretion by issuing a press release regarding the disciplinary proceedings, as nothing in the release was inaccurate.

Prime Healthcare Servs. v. Serv. Emps. Int’l Union (Summary)

Antitrust

Prime Healthcare Servs. v. Serv. Emps. Int’l Union, Civil Action No. 11-cv-2652-GPC-RBB (S.D. Cal. July 25, 2013)

The United States District Court for the Southern District of California granted a motion to dismiss a hospital management company’s claims against a health plan and an unincorporated labor association for violations of Sections 1 and 2 of the Sherman Act.  The hospital management company claimed that the defendants unlawfully entered into labor partnership agreements in a market domination strategy to eliminate the hospital management company from the market.  The court found that the written agreements between the defendants clearly indicated that they had no intention of attempting to dominate the market and push competitors out of business. The court also found that the hospital management company failed to prove market power or injury to competition.

Feygina v. Hallmark Health Sys. (Summary)

PHYSICIAN CONTRACT

Feygina v. Hallmark Health Sys., No. MICV2011-03449 (Mass. Super. Ct. July 12, 2013)

The Superior Court of Massachusetts held that a physician who was attempting to recover unpaid wages was entitled to treble damages but refused to award additional compensation for prejudgment interest or increased income tax liability. The court stated that the corporation still owed the physician additional managed care payments. These damages were trebled in accordance with the state wage act. The court explained that trebling the amount is compensatory, not punitive in nature. The court rejected the corporation’s claim that it was protected by a statutory hospital exception because the corporation only had affiliations with hospitals; it was not a hospital itself. Based on this trebled award, the court stated that it would be “double counting” to allow the physician to receive additional compensation based on increased income tax liability.

Traina v. OSF Healthcare Sys., Inc. (Summary)

CLINICAL PRIVILEGES

Traina v. OSF Healthcare Sys., Inc., No. 3-12-0548 (Ill. App. Ct. July 15, 2013)

The Appellate Court of Illinois ruled in favor of a private hospital’s motion to dismiss multiple counts in an orthopedic surgeon’s amended complaint alleging a violation of the hospital’s bylaws and also that the proceedings reviewing the hospital’s decision to restrict his surgical privileges were fundamentally unfair. After a departmental study showed that the surgeon’s revision rates were significantly higher than other doctors in the department and the national average, the hospital requested that he take remedial action or the hospital would institute formal corrective action against him. The surgeon requested that the revision cases be reviewed by an outside source. Upon completion of the outside review, the surgeon was informed that he must “voluntarily resign” his privileges or complete an approved remediation program or fellowship or else face further “corrective action.” Ultimately, the physician took neither option and later requested a hearing after a recommendation was made to restrict his clinical privileges. The physician brought a lawsuit claiming violations of the bylaws and unfair procedure after the  Board affirmed the recommendation.  The trial court dismissed these claims and the physician appealed.

The appellate court worked from the premise that, as a general rule, the internal staffing decisions of a private hospital are not subject to judicial review, except when the decision in question involves a revocation, suspension, or reduction of a physician’s existing staff privileges, which could seriously affect the physician’s ability to practice medicine. With regard to the surgeon’s complaint that there was a violation of the bylaws, which prohibits any person from serving on the hearing committee if they have previously been “actively” involved in the investigation, the court found that the lower court properly dismissed the counts because the doctors on the hearing committee were neither “active participants” in, nor did they “initiate[ ] or investigate[ ]” the underlying matter. The court also found that the surgeon’s complaint failed to allege he suffered any actual prejudice as a result of the doctors’ presence on the review hearing committee. Further, the complaint did not allege any person on the hearing committee actually acted with prejudice, malice, or unfair bias. As a private hospital setting lacks state action, a physician facing disciplinary measures by the hospital is entitled to certain “basic protections,” including notice and a fair hearing. As the surgeon had adequate notice of the concerns subject to the disciplinary action and the hearing committee allowed him to cross-examine witnesses and present evidence in his own defense, the court concluded that the pleadings and supporting documents refuted the surgeon’s claim that the hospital deprived him of a fundamentally fair proceeding.

Mathai v. Bd. of Sup’rs of Louisiana State Univ. (Summary)

SOVEREIGN IMMUNITY

Mathai v. Bd. of Sup’rs of Louisiana State Univ., No. 12-2778 (E.D. La. July 17, 2013)

The United States District Court for the Eastern District of Louisiana dismissed a suit against the board of a medical school and its dean by a former student who brought claims under §1983 and for breach of contract.  The student, who had a history of drug use that resulted in her entering into a continuation of enrollment contract with the school’s campus assistance program, was dismissed from the medical school after she refused to attend a three-month inpatient treatment program. The district court found the board, as an arm of the state, was immune from liability for the breach of contract and §1983 claims.  Similarly, the student’s claims for money damages against the dean were barred, as the court found he was acting in his official capacity as dean and was therefore protected by qualified immunity.  The student’s claims for injunctive relief against the dean were not barred by immunity, but the district court dismissed them nonetheless, finding that the student was not denied due process.