Nw. Podiatry Ctr. v. Ochwat (Summary)

RESTRICTIVE COVENANTS

Nw. Podiatry Ctr. v. Ochwat, No. 1-12-0458 (Ill. App. Ct. May 8, 2013)

The Appellate Court of Illinois affirmed in part and reversed in part a trial court’s decision to allow a preliminary injunction preventing two podiatrists from treating a podiatry center’s patients.  The two were employed by the podiatry center and both had contracts with varying restrictions.  Both resigned the same year and began a different podiatric specialist group.  Two additional employees left the center to join them.  The appellate court interpreted various aspects of the contracts.

Merwin v. State Bd. of Registration for the Healing Arts (Summary)

PHYSICIAN LICENSURE

Merwin v. State Bd. of Registration for the Healing Arts, No. WD75508 (Mo. Ct. App. May 7, 2013)

The Missouri Court of Appeals for the Western District affirmed in part and reversed in part a board’s decision to place a physician’s license on probation for five years. The physician voluntarily sought assistance from a physician health program for drug and alcohol abuse. He was allowed to return to work on the condition that he continued to participate in a physician health program. The physician left the health program and was suspended from his practice group until alternative treatment was found. The physician resigned because he could not find an alternative program that met the requirements of the medical group.

The appellate court held that the board’s decision was supported by the evidence. The court stated that while the physician was not impaired while in the course of treating patients, his absences were a direct result of alcohol abuse, which fits the statutory definition of impairment. The appellate court rejected the physician’s argument that the statute implied an inability to work. The court held that the statute’s use of impairment was meant to describe the ability to perform the work of the profession, which includes being present.

The appellate court held that there was no evidence to support a finding that the physician engaged in unprofessional behavior by failing to report his withdrawal from the health program to his new employer.  The court stated that requiring an applicant to disclose this type of information was not part of the statutory requirements nor did it amount to unprofessional conduct.  Since this was one of the grounds on which the board based its decision, the court remanded to the board for it to amend its discipline.

Estate of Ray v. Forgy (Summary)

APPARENT AGENCY AND CORPORATE NEGLIGENCE

Estate of Ray v. Forgy, No. COA12-1071 (N.C. Ct. App. May 7, 2013)

A widower brought suit against a hospital after a complication from surgery was misdiagnosed by a physician and eventually led to the death of his wife.  The widower argued that two issues of material fact existed with regard to apparent agency and corporate negligence that made summary judgment improper.

The Court of Appeals for North Carolina held that the widower’s belief that the physician was an employee of the hospital was unreasonable.  The court stated that both the wife and the widower signed consent forms indicating that they saw the physician as distinct from the hospital.  In addition, the couple had visited the physician’s private office on multiple occasions, where they were required to sign separate consent forms that were specific to the private medical office. There was also a paragraph on the forms signed at the hospital that stated that many of the physicians on staff were not employees but independent contractors who had been granted privileges.  The trial court did not err in granting summary judgment on the issue of apparent agency.

The appellate court held that the trial court did err in granting summary judgment on the issue of corporate negligence.  When the physician applied for reappointment, he indicated that he had a professional liability suit pending against him but did not attach any information explaining the suit.  No one at the hospital discussed the care of those patients with him.  The appellate court stated that this raised an issue of fact as to whether or not the hospital was reasonably diligent in reviewing the physician’s qualifications.  This portion of the summary judgment was reversed and remanded.

Smoker v. Iowa Bd. of Med. (Summary)

STATE MEDICAL BOARD/ALCOHOL DEPENDENCY

Smoker v. Iowa Bd. of Med., No. 12-1216 (Iowa Ct. App. Apr. 24, 2013)

The Court of Appeals of Iowa (“appellate court”) reversed and remanded a lower court’s decision to affirm the state medical board’s decision to fine a physician and place her on probation.

The physician developed alcohol dependency, self-reported to the Virginia board of medicine, and completed an inpatient treatment program. The physician then moved to Iowa, and the Iowa board of medicine required that she complete a diversion program in Iowa, which consisted of a physician health contract, because she was on a diversion program in Virginia. The physician had one isolated relapse, immediately entered a treatment program, and the Iowa board of medicine extended her health contract to 2008. The physician had no further relapses and was released from the health contract.  Thereafter, a colleague reported to the physician’s workplace monitor that the physician was drinking at a national conference, and the monitor responded that the physician was no longer under the health contract. A few months later, the colleague again reported to the workplace monitor that the physician was intoxicated at a professional dinner, but the workplace monitor did not act on the report. However, the morning after the dinner, the physician reported to the department chair that she had relapsed and had attended an AA meeting a few hours after the relapse.

The colleague reported his observations to the board of medicine, and when questioned by the health program coordinator, admitted that she had relapsed, stated that there had been no recent incidents, and declined the offer to self-report. The board investigated, stated that there were reports that the physician was intoxicated at two social events, and that she declined to self-report. The board then required the physician to undergo an evaluation, during which the physician stated that she had consumed alcohol on two occasions after her release from the health contract. The board filed charges against the physician of (I) excessive use of alcohol which may impair her ability to practice medicine, and (II) suffering from a physical, neuropsychological or mental condition which may impair her ability to practice medicine. The board held a hearing, and as to charge I, found that the physician did consume alcohol on two occasions, has used alcohol in a manner which may impair her ability to practice medicine, and that this is true even though there is no evidence that she provided medical care while being impaired. The board dismissed charge II.  The board issued a final order which warned the physician of further disciplinary action if she relapsed, fined her $5,000 and placed her on probation, which included participation in a monitoring program, drug screening, substance abuse meetings, therapy, quarterly reports, a monitoring fee, and board appearances. The physician sought judicial review of the order, the district court affirmed the board’s decision, and the physician appealed.

The appeals court reversed the decision of the district court and remanded the case to the board for an entry dismissing the disciplinary action against the physician, finding that there was not substantial evidence to support the finding of the board. The appeals court stated that the board’s investigation was insufficient in part because no interviews were conducted, the chief investigator testified that there was no evidence supporting the charges against the physician, and that the psychiatrist who performed the evaluation admitted that he had no evidence to support the charge of excessive use of alcohol which may impair the ability to practice medicine, as well as no evidence of active alcoholism.

Bhan v. Battle Creek Health Sys. — Apr. 2013 (Summary)

ADA/RACE DISCRIMINATION

Bhan v. Battle Creek Health Sys.
No. 1:10-CV-202 (W.D. Mich. Apr. 24, 2013)

The United States District Court of the Western District of Michigan (“district court”) granted a health system and hospital’s motions for summary judgment. A physician brought suit against a health system, hospital, and multiple other defendants after questions about his quality of care eventually led to the revocation of his privileges at both the health system and hospital. The physician claimed race discrimination under a state statute against the hospital, as well as a violation of the Americans with Disabilities Act against the health system.

The district court held that the physician failed to provide sufficient evidence that he was discriminated against based on race by the hospital. The court stated that the physician did not demonstrate he was treated differently from similarly situated physicians outside of the protected class. The court rejected the physician’s allegation that his supervisor would not sit down with him or treat him professionally, stating that these did not establish a case of discrimination. Even if the physician had established a case of discrimination, the court stated that the hospital provided legitimate evidence as to why his privileges should have been revoked.

The district court also granted summary judgment to the health system on the Title I ADA claim, stating that the physician had not yet exhausted his administrative remedies by not filing an Equal Employment Opportunity Commission charge, and thus had not received a right to sue letter. The court also found that even if he had exhausted such remedies, that he was not an employee. As for the Title III ADA claim, the court found that the most reasonable reading of Title III is that it extends to customers or clients of public accommodations, but not employees or independent contractors, and also dismissed that claim against the health system.

U.S. ex rel. DePace v. Cooper Health Sys. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. DePace v. Cooper Health Sys., Civil Action No. 08-5626 (JEI/AMD) (D. N.J. Apr. 22, 2013)

The United States District Court for the District of New Jersey held that a qui tam relator owed his lawyer fees and costs from a contingency fee agreement between the relator and the law firm, as well as the statutory fees and costs under a settlement agreement among the federal government, the relator, and the defendant health system, among others.

The relator initiated the qui tam action against a health system and hospital and retained a law firm to assist him, with which he entered into a contingency fee agreement and which stated that the contingency fees would be in addition to any statutory attorney’s fees and costs.  When the qui tam suit was ultimately settled by the health system, the settlement agreement required the health system to pay the law firm’s statutory fees and costs.  Thereafter, the physician balked at paying additional fees and costs under the contingency fee agreement.

The court found that the settlement agreement did not supersede the contingency fee agreement, since the documents did not cover the same topic.  The contingency fee agreement governed what the physician must pay the law firm, while the settlement agreement governed what the health system would be required to pay under the fee shifting provisions of the False Claims Act.

U.S. ex rel. Schubert v. All Children’s Health Sys. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Schubert v. All Children’s Health Sys., No. 8:11-cv-1687-T-27EAJ (M.D. Fla. Apr. 16, 2013)

The United States District Court for the Middle District of Florida granted a motion for summary judgment in favor of a health system in this False Claims Act case regarding the overcompensation of physicians.  The qui tam relator alleged that the health system over-compensated physicians by not following its physician group’s compensation plan, under which compensation was not to exceed the 75^th percentile of the national average for physician salaries.  The court noted that a False Claims Act claim must allege more than labels and conclusions – it must also state with particularity the circumstances constituting fraud.

The relator did not dispute that she could not identify a single false claim, but instead argued that each claim submitted by the health system was contrary to Stark and the Anti-Kickback Statute since the health system falsely certified that its claims complied with all applicable laws and regulations.  The court found that although this “implied certification” theory was viable, the relator was still required to plead her case with particularity.  The court held that she did not meet this burden because she did not identify the specific false claims, did not allege the kickbacks, referrals or false certifications with particularity, did not provide patients, dates, referrals, procedures or bills relating to false claims, and did not describe any false certifications.  The court also found that these deficiencies could be excused if the court can infer “indicia of reliability” from a relator’s position, but in this case the relator did not even work in the relevant department or with the same company that was alleged to have presented false claims.

Murfin v. St. Mary’s Good Samaritan (Summary)

HCQIA

Murfin v. St. Mary’s Good Samaritan, No. 12-CV-1077-WDS (S.D. Ill. Apr. 17, 2013)

Finding that it did not have subject matter jurisdiction over the case, the United States District Court for the Southern District of Illinois remanded to state court a lawsuit brought by a physician who requested injunctive relief to prevent a hospital from revoking his clinical privileges.

The case arose after a physician allegedly yelled at and had physical contact with two nurses, resulting in a Medical Executive Committee recommendation that the physician attend anger management counseling, issue a letter of apology, and accept a 30-day suspension of clinical privileges.  Though the physician accepted the MEC’s recommendation, the board of directors nevertheless terminated the physician’s clinical privileges.

In response, the physician demanded a hearing on the recommendation of a 30-day suspension, which the hospital denied.  The physician then filed a complaint for injunctive relief in state court, seeking to enjoin the hospital from enforcing the revocation of his privileges, ordering the hospital to provide him with a hearing, and enjoining the hospital from making a report to the National Practitioner Data Bank. The physician then removed the case from state court to federal court.

The federal court questioned whether it had jurisdiction over the case, noting that the removal of a case to federal court is proper if the lawsuit could have originally been filed in that court, such as when the claim arises under federal law.  In the case at hand, the court found that there was no claim created by federal law under the HCQIA, since the HCQIA offers immunity protection and does not give rise to a private cause of action when its hearing procedures are not followed.

U.S. ex rel. Boggs v. Bright Smile Family Dentistry (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Boggs v. Bright Smile Family Dentistry, No. CIV-10-25-L (W.D. Okla. Apr. 18, 2013)

The United States District Court for the Western District of Oklahoma granted summary judgment in favor of a number of dentists and a dental practice in this False Claims Act case alleging that the offering of gas cards and courtesy transportation to patients by the dentists violated federal and state False Claims Acts.

The district court found that the relators did not raise a genuine issue of material fact regarding whether the dentists knew of the gasoline card incentives being offered to patients and that a reasonable jury would not be able to find a False Claims Act violation from the evidence presented by the relators.

The court also found that it lacked subject matter jurisdiction over the case pursuant to the doctrine of “public disclosure bar,” which states that a false claim suit is barred when based on public disclosure of the related allegations, unless the suit is brought by the attorney general or the person bringing suit is the original source of the information.  In this case, the qui tam relators’ claims were based on published advertisements by the defendant dentists in magazines of general publication, widely distributed throughout the relevant metropolitan area.   Therefore, the court held that they were barred.

 

 

Patel v. Ga. Dep’t of Behavioral Health and Developmental Disabilities (Summary)

HCQIA

Patel v. Ga. Dep’t of Behavioral Health and Developmental Disabilities, No. 12-14160 (11^th Cir. Apr. 22, 2013)

The United States Court of Appeals for the Eleventh Circuit dismissed a physician’s HCQIA claim in a lawsuit brought by a physician alleging, among other things, violation of the HCQIA and Fourteenth Amendment right to due process by a state department of behavioral health that allegedly terminated him without a hearing after he complained about not receiving a raise and because he refused to work the night shift while on jury duty leave.

The physician alleged that the lower court, which dismissed his discrimination claims for failure to comply with the statute of limitations, failed to address all of the claims raised in his complaint – specifically, those related to the lack of due process.  The court agreed and remanded the Fourteenth Amendment and state due process claims to the lower court.  It dismissed the HCQIA claim, however, holding that no private cause of action exists under the HCQIA.