Miller v. Huron Reg’l Med. Ctr. Inc. (Summary)

NATIONAL PRACTITIONER DATA BANK

Miller v. Huron Reg’l Med. Ctr. Inc., No. CIV 12-4138 (D. S.D. June 13, 2013)

The United States District Court for the District of South Dakota left pending a physician’s motion to compel a hospital to provide a copy of an external review obtained by the hospital’s insurer that involved the physician’s care of a specific patient, holding that whether the hospital had to provide her with a copy of the review depended upon whether the hospital reported the physician to the National Practitioner Data Bank or took other adverse action on the physician’s appointment or privileges on the basis of the care rendered to that patient.  The court reasoned that if the hospital had filed a report with the NPDB or took other adverse action against the physician in reliance on the external review, she should be provided with a copy of the review in order to satisfy the “fair procedures” portion of the Health Care Quality Improvement Act.  Alternatively, if a report was not made to the NPDB and no other adverse action was taken in reliance on the review, then the hospital did not have to produce the review and the physician would be left to her own resources to subpoena the report.  Interestingly, language in the opinion indicated that the court viewed a report to the NPDB itself to be an adverse action, which could be problematic in cases in which hospitals are required to report surrenders of clinical privileges while under investigation or in order to avoid a professional review action – reporting obligations triggered by the action of the affected physician rather than action by a medical executive committee and/or a board.

Wagner v. Ohio State Univ. Med. Ctr. (Summary)

PHYSICIAN EMPLOYMENT

Wagner v. Ohio State Univ. Med. Ctr., No. 12AP-399 (Ohio Ct. App. June 13, 2013)

The Court of Appeals of Ohio affirmed a lower court’s grant of summary judgment in favor of a medical center, holding that the medical center was not liable for a patient’s injury because the injury suffered was not foreseeable and the physician who had caused it had acted outside his scope of employment.  A patient sued the medical center after a pain management physician who had been employed by the medical center came to the patient’s home and began siphoning medication from the patient’s pain pump for his own personal use.  The physician had been dealing with a substance abuse problem for several years and the medical center had recently terminated his employment following the suspension of his medical license.  The physician had made regular visits to the patient’s home, under the guise of doing pain management research, and would remove medication from the patient’s pain pump, causing him to suffer from an infection and other complications.  The medical center discovered what the physician was doing after he diverted pain medication from a second patient’s pump and that patient notified the medical center.  The medical center alerted law enforcement and sent a notice to all pain clinic patients that the physician was no longer affiliated with the medical center.  The court held that no special relationship existed in this case that would have required the medical center to protect this particular patient above all others.  The medical center never approved the research the physician claimed to be conducting.  Furthermore, the risk of pain pump theft was not apparent to the medical center until it started occurring at the second patient’s home, and it was immediately after that discovery that the medical center took reasonable steps to protect additional patients.  The court also considered the medical center’s steps of limiting the physician’s access to drugs and patients even while he still had a partial faculty appointment at the medical center, determining that they were reasonable as well.

Alloush v. Physician Cardiovascular Venture, LLC (Summary)

CONTRACT DISPUTE

Alloush v. Physician Cardiovascular Venture, LLC, No. 2011-T-0112 (Ohio Ct. App. June 10, 2013)

The Court of Appeals of Ohio reversed and remanded a lower court’s grant of summary judgment in favor of a cardiologist, holding that a jury must decide whether the cardiologist actually retired from the practice of medicine before the court can determine whether there was a material breach of the operating agreement governing his practice with a limited liability corporation (“LLC”).  The cardiologist at issue had purchased membership units in an LLC that owned and operated cardiac catheterization labs, the terms of which were controlled by an operating agreement.  One of the terms of the operating agreement required all members to maintain appointment and clinical privileges at a local hospital.  After the cardiologist resigned from the staff of the hospital, the LLC determined that the cardiologist’s resignation violated the terms of the operating agreement and thus his interest in the entity was paid out at a punitive rate per the terms of the agreement.  However, the cardiologist claimed that he had not just resigned from the hospital, but had retired from the practice of medicine altogether, which should be considered a “triggering event” under the agreement which would give him a payout at a much higher rate.  The lower court had determined that the cardiologist had not breached the agreement and that the LLC should have purchased his units pursuant to the higher formula amount.  The appellate court disagreed, finding that whether he had actually retired was a question of fact especially considering that he had taken affirmative steps to maintain his medical license and had written prescriptions for various family members following the date of his alleged retirement.

Univ. of Tex. Sw. Med. Ctr. v. Nassar (Summary)

FEDERAL DISCRIMINATION/RETALIATION

Univ. of Tex. Sw. Med. Ctr. v. Nassar, No. 12-484 (U.S. June 24, 2013)

The U.S. Supreme Court vacated a lower court judgment and remanded a case involving a physician who alleged Title VII retaliation claims, holding that such claims must be proven according to the principles of but-for causation rather than the lessened motivating-factor test used in Title VII discrimination claims.  The physician, who was of Middle Eastern descent, had been a faculty member at a university and claimed that the university-affiliated medical center rescinded a job offer as retaliation for his allegations that a supervisor had engaged in racially and religiously motivated harassment.  Those allegations had been detailed in the letter he submitted resigning his faculty position at the university.  The lower courts found in favor of the physician, concluding that the physician had met the motivating-factor test (as used in Title VII discrimination claims) which only required that individuals alleging a Title VII retaliation claim show that the retaliation was only one motivating factor for the adverse action.  The Supreme Court examined the federal Age Discrimination in Employment Act of 1967 (“ADEA”) and case law and found there to be no difference between that body of law and Title VII claims, concluding that like the ADEA, Title VII retaliation claims require plaintiffs to establish a heightened degree of proof, showing that the retaliation was the “but-for” cause of the employment action.  The Court added that this standard would strike a balance in protecting the rights of both employees and employers, especially as the frequency of retaliation claims increases.

Knapp Med. Ctr., Inc. v. Grass (Summary)

RIGHT TO KNOW LAW

Knapp Med. Ctr., Inc. v. Grass, No. 13-12-00099-CV (Tex. App. June 6, 2013)

The Court of Appeals of Texas (“appellate court”) reversed a lower court’s judgment and held that a medical center was exempt from a state’s disclosure requirements. The disclosures were sought by an attorney who requested a number of documents, including a copy of the medical center’s bylaws and federal tax returns. The medical center claimed that it was not required to comply with this requirement based on an exemption to the state disclosure law that exempted any entity that did not solicit contributions from the public in excess of $10,000.

The appellate court held that medical center was exempt from the disclosure requirement.  While an affiliated foundation was formed for the sole purpose of soliciting funds from the public and providing financial support to the hospital, the court ruled that the foundation was a separate entity from the medical center.  The fact that the foundation then made grants to the medical center did not affect the medical center’s exemption from the financial disclosure law.

Dissenting Opinion

Kunajukr v. Lawrence & Mem. Hosp., Inc. (Summary)

HCQIA IMMUNITY

Kunajukr v. Lawrence & Mem. Hosp., Inc., No. 3:05-CV-1813(JCH) (D. Conn. Jan. 12, 2009)

The United States District Court for Connecticut (“district court”) granted a motion for summary judgment in favor of a hospital who denied a doctor reappointment to its medical staff due to concerns about his practice.  The district court found that the hospital’s professional review activities, including investigations, deliberations, and recommendations that preceded and supported the decision, qualified for HCQIA immunity.

The court also rejected the doctor’s contention that the Board did not conduct a reasonable fact-gathering process, finding that the Hospital’s process complied with HCQIA, was fair to the physicians and was taken in the reasonable belief that the action was warranted by the known facts.

The district court also granted the hospitals motion for summary judgment on the physician’s breach of contract claim based on the employment contract that gave the hospital the right not to renew the doctor’s contract.

The district court also granted the hospital’s motion for summary judgment on several other claims, including defamation and breach of the Connecticut Unfair Trade Practices Act.  The defamation claim was solely based on publication about the doctor in the National Practitioners Data Bank, but the district court found this this involved the initiation and carrying out of the peer review process, which entitled the hospital to immunity under the HCQIA.  As for the breach of the Connecticut Unfair Trade Practices Act, the district court found that the hospital did not breach a contract with the doctor and was entitled to HCQIA immunity from actions challenging the peer review process.

The district court also granted the hospital’s motion for summary judgment on the doctor’s claim of discrimination on the basis of national origin, age, marital status, and ancestry, in violation of the Connecticut Fair Employment Practices Act and Title VII of the Civil Rights Act of 1964, finding that even if the doctor was qualified to perform his job, he presented no evidence of employment discrimination based on age or marital status.  The doctor relied on the hospital’s reference to his poor English speaking skills as a basis for race and national origin discrimination, but the reference occurred years before his termination or denial of privileges.

Finally, the district court granted the hospital’s motion for summary judgment on the claims of negligent infliction of emotional distress and intentional infliction of emotional distress, finding that nothing pertaining to the doctor’s termination rose to the level of outrageous conduct beyond all possible bounds of decency.

Rouben v. Parkview Hosp., Inc. (Summary)

PEER REVIEW

Rouben v. Parkview Hosp., Inc., No. 1:10-CV-397 (N.D. Ind. June 6, 2013)

The United States District Court for the Northern District of Indiana (“district court”) granted a hospital and one of its administrator’s (“administrator”) motion for summary judgment on several claims asserted by a previously privileged doctor (“doctor”), including defamation and tortious interference with a business relationship.  While the physician was employed by Parkview Hospital as a locum tenens physician, he was informed that several hospital employees alleged that he had made several inappropriate comments to them.  The physician denied these allegations.  The physician accepted employment with Gulfport and resigned his employment at Parkview before the allegations could be considered by a peer review committee.

At some point in time, Gulfport became aware that the physician had resigned his position, was also aware of the allegations that had been made against the physician, and withdrew its offer to employ the physician.

The physician denied any wrongdoing and sued Parkview under several theories, including defamation, tortious interference and breach of contract.

The physician’s defamation claim alleged that Parkview Hospital did not offer him the opportunity to appear before its peer review committee prior to disclosing information to his prospective new employer about complaints received about the doctor’s allegedly inappropriate behavior.  However, the hospital argued that it was entitled to immunity from defamation claims based on Indiana’s Peer Review Statute, which provides immunity during an initial investigation so long as the investigating hospital’s policies provide for such review.  The district court agreed and found that Indiana’s Peer Review Statutes guaranteed confidentiality of all proceedings of a peer review committee.  Also, the district court held that the release of liability that was included in the physician’s application for medical staff appointment provided the hospital with additional protection from the physician’s claims.

The doctor based his tortious interference with business relationship claim on the theory that the hospital disclosed the allegations against the doctor to his prospective employer in an attempt to interfere with his business relationship with the prospective employer.  However, the hospital’s administrator explained to the prospective employer, during a phone conversation and later in writing, that the doctor’s privileges were not terminated.  The district court then found that the doctor’s application with the prospective employer was incomplete because he failed to provide a valid Mississippi medical license, current certificate of insurance, and a professional reference.  Therefore, the district court granted the hospital’s motion for summary judgment on this claim as well.

Sadler Clinic Ass’n. v. Hart (Summary)

RESTRICTIVE COVENANT

Sadler Clinic Ass’n. v. Hart, No. 09-12-00086-CV (Tex. App. June 13, 2013)

Multiple physicians brought a declaratory action claim against a clinic that was located in Texas seeking to have the restrictive covenant in their employment contract that prohibited them from competing with the clinic while they were employed by the clinic and for 18 months thereafter within a 22-mile radius of the clinic to be declared unenforceable.  The agreement also contained a buyout clause that allowed the physicians to opt out of the noncompetition covenant if they did not wish to be bound by it. The lower court held that the buyout clause was ambiguous and did not contain a reasonable buyout clause, and so was unenforceable as a matter of law.

The appellate court reversed the lower court holding that the noncompetition clause in the physicians’ agreement was reasonable. The court stated that the clause was intended to protect certain confidential information that the physicians had access to during their time at the clinic. The appellate court then held that the trial court did not have the authority to determine the reasonable price of a buyout.  Rather, the statute provided that the proper remedy was binding arbitration to determine a reasonable buyout price.

The appellate court also declined to grant an extension to the restrictive covenant based on the amount of time the agreement was in litigation. The court stated that the noncompetition covenant contained its own tolling provision extending the restricted period during a breach. The maximum tolling period was already anticipated by the parties, so there was no reason for the court to address the issue.

Karkalas v. Dept. of State, Bureau of Prof’l and Occupational Affairs, State Bd. of Med. (Summary)

LICENSE

Karkalas v. Dept. of State, Bureau of Prof’l and Occupational Affairs, State Bd. of Med., No. 1932 C.D.2012 (Pa. Commw. Ct. June 11, 2013)

The Commonwealth Court of Pennsylvania (“commonwealth court”) affirmed the State Board of Medicine’s (“board”) order which required a physician to pay a $2,500 civil penalty and complete 10 hours of continuing education.

In this case, a physician filled prescription requests based on patient online questionnaires provided by a clearinghouse.  The clearinghouse maintained the patient’s health information. Although the physician had access to the records that were maintained by the clearinghouse while his agreement with the clearinghouse was in effect, the physician did not print or personally retain prescription records on patient questionnaires nor did he maintain in his office any records, files or even the patient names pertaining to the online prescriptions that he prescribed.  The physician was denied access to the clearinghouse’s records following the termination of his agreement with the clearinghouse.

The State Board of Medicine ruled that the physician’s failure to maintain medical records for patients for whom he wrote online prescriptions constituted unprofessional conduct.  The Board then imposed a $2,500 civil penalty and a requirement that the physician complete 10 hours of continuing education in the area of recordkeeping.  The physician sued the Board claiming that the Board of Medicine erred when it held that he violated the regulation.

The Pennsylvania Commonwealth Court upheld the Board of Medicine’s decision that the physician violated the Board’s regulation, which required that he “maintain” his patients’ medical records. While the regulation does not explicitly define “maintain,” the court determined that the board’s interpretation of the word as meaning have “access to and control over” is consistent with the regulation. Further, the court held that the regulation was consistent with the statute under which it was promulgated.

Talmadge v. Stamford Hosp. (Summary)

EMPLOYMENT DISCRIMINATION – ADA

Talmadge v. Stamford Hosp., No. 3:11-cv-01239-WWE (D. Conn. May 31, 2013)

An OR nurse was caught stealing narcotics while working.  The nurse was able to retain his license if he took a leave of absence and participated in a rehabilitation program.  That rehab program required him to sign an agreement that he would not have any access to narcotics or return to working as a nurse in an operating room, procedure room, or recovery room without the approval of the rehab program.

The nurse then applied to work at the defendant hospital.  After meeting with the nurse, the defendant hospital decided not to hire him.  The nurse filed suit against the defendant hospital in federal district court for the district of Connecticut claiming he was denied employment due to his past drug addiction in violation of the Americans with Disabilities Act (“ADA”).

The hospital argued that the nurse was not disabled within the meaning of the ADA.  While the court stated that it was “skeptical of whether plaintiff demonstrated that his addiction substantially limited one or more major life activities,” this issue was found to be moot since the nurse failed to show that he was a “qualified individual” under the ADA.

In order to establish a claim under the ADA, the nurse was required to show that he was otherwise qualified to perform the essential functions of the job with or without reasonable accommodation.  Since the nurse was not cleared to access narcotics or return to an operating room environment until after the defendant hospital’s employment start date, the court found that he was not qualified to perform the necessary duties of the job.  Further, the court held that no reasonable accommodation could have been made for an operating room nurse who could not work in an operating room.  The court also reasoned that subsequent communications between the two parties regarding reconsideration of the nurse’s initial application could not be considered as new applications for the position.  As such, the district court granted the defendant hospital’s motion for summary judgment.