Maa v. Ostroff (Summary)

FALSE CLAIMS – QUI TAM

Maa v. Ostroff, No. 12-cv-00200-JCS (N.D. Cal. Apr. 19, 2013)

The United States District Court for the Northern District of California dismissed a qui tam action brought against a hospital’s “top employees” (including the CEO, President of the Medical Staff, CMO, Chair of Surgery, Dean of the School of Medicine, and Director of Risk Management) by a physician who alleged that inaccurate information was placed in his credentials file, his reappointment terms were limited to one year, and he was removed from tenure track – all in retaliation for raising concerns that a patient died because of another physician’s failure to appropriately supervise sedation nurses who were administering anesthesia, in violation of Medicare reimbursement regulations.

In his qui tam action, the physician alleged three types of false claims:  (1) the unsupervised and inappropriate use of sedation nurses to administer deep sedation; (2) the unsupervised use of residents to perform endoscopic procedures; and (3) the performance of medically unnecessary endoscopic procedures.

The “top employee” defendants filed a motion to dismiss the physician’s claims, arguing that the physician failed to state a claim for which relief is available under the law, since the allegations of improper use of sedation nurses are based on alleged violations of the Conditions of Participation for Hospitals (“COPs”) and the Ninth Circuit has already held that violations of COPs are not actionable under the False Claims Act.  Further, the “top employees” argued that they were entitled to qualified immunity, that the physician failed to satisfy the rules requiring fraud claims to be pled with particularity, that the physician’s state law claims were inappropriate since the statute cited by the physician in support of those claims did not apply to private insurance claims, and that the physician’s alleged “protected speech” was not actually protected by the First Amendment since it was made in the scope of his official job duties (as Vice Chair of the Department of Surgery Quality Improvement Program).

The district court held that payment by Medicare for anesthesia services is not conditioned on compliance with the COPs (42 C.F.R. §482.52) governing anesthesia administration and supervision, except if unqualified individuals performed the anesthesia services which are billed.  Accordingly, the court dismissed the physician’s claims based on the failure to comply with the Hospital COPs.

The district court also dismissed the physician’s claim that the residents were performing procedures without supervision, in violation of Medicare’s physician fee schedule regulations. The court rejected the physician’s claim that it was impossible for the supervising physician to be present for all of the procedures he scheduled due to the sheer number of procedures occurring simultaneously, noting that the regulations only required the supervising physician to be present for the “entire viewing” of endoscopic procedures and if all procedures took the minimal amount of time, the supervising physician could have been available to supervise all of the residents or to perform the procedures himself.

The district court also dismissed the physician’s claims regarding unnecessary procedures, noting that it is not sufficient for the physician to allege that a number of patients had many procedures within a short period of time, without otherwise alleging why those procedures would have been unnecessary.

Finally, the court also rejected the physician’s claims of retaliation in violation of his First Amendment rights to free speech, but gave leave for him to amend his complaint.  The court noted that whether the physician’s follow-up on the patient’s death (by internally raising concerns that the true cause of death had not been adequately identified and addressed and by planning to provide testimony in support of the patient’s family in a malpractice suit) was part of his official job duties or were personal speech was a question of fact that could not be decided by the court.  However, the physician’s complaint needed to be amended to allege the aspects of his speech that were personal.  Further, the court noted that the physician failed to specify how each of the “top employee” defendants was involved in the retaliation based on his free speech, a flaw that would need to be remedied in the amended complaint.

Maldonado-Rodriguez v. St. Luke’s Mem’l Hosp. (Summary)

EMTALA

Maldonado-Rodriguez v. St. Luke’s Mem’l Hosp., Civ. No. 10-1362 (PG) (D. P.R. Apr. 22, 2013)

The United States District Court for the District of Puerto Rico granted a hospital’s motion for summary judgment in an EMTALA lawsuit concerning a patient who died while being treated in an emergency room for injuries suffered in an accident. The family of the patient claimed that the physicians at the hospital lacked the proper staff and equipment necessary to treat the patient and failed to properly transfer him.

In granting summary judgment to the hospital, the district court found that the hospital complied with its duty to screen the patient for an emergency medical condition.  Further, the court held that EMTALA’s stabilization requirements were not violated because the patient was never transferred. EMTALA defines stabilization as providing medical treatment to assure that a patient does not deteriorate during a transfer from one facility to another. The patient never left the hospital; he died before the transfer could be performed.

The district court also dismissed the duty to transfer claim. The court stated that the decision to transfer did not give rise to an EMTALA claim. A hospital is only liable for the conditions under which a stable or unstable patient was transferred. The transfer decision itself may trigger medical malpractice liability, but it does not trigger EMTALA liability.

Chudacoff v. Univ. Med. Ctr. (Summary)

COURT PROCEDURES – CLAIM PRECLUSION

Chudacoff v. Univ. Med. Ctr., No. 11-16232 (9^th Cir. Apr. 18, 2013)

The United States Court of Appeals for the Ninth Circuit reversed a district court’s dismissal of a physician’s case, on the basis of claims preclusion, holding that the lower court erred in its application of preclusion law.  The appeals court held that the claims were not barred by preclusion because they did not arise out of the same general facts as the claims in the first lawsuit.  In fact, most of the facts of the second case arose from events that occurred after the first lawsuit was filed, further indicating the factual differences between the two cases.

Read the prior opinion (now reversed in part).

Wynes v. Kaiser Permanente Hosps. (Summary)

WRONGFUL EMPLOYMENT TERMINATION/ DISABILITY

Wynes v. Kaiser Permanente Hosps., No. 2:10-cv-00702-MCE-GGH (E.D. Cal. Mar. 28, 2013)

In this employment discrimination case, the U.S. District Court for the Eastern District of California granted in part and denied in part a motion for summary judgment filed by a hospital.  A nurse brought suit against a hospital after she was terminated from her position.  The nurse had a shoulder injury that forced her to take extended leaves of absence from the hospital.  She complained of an inadequate accommodation at her desk because its size required her to lift her arm in ways that were very painful and which led to another leave of absence.  The hospital terminated the nurse’s employment while she was still on leave.  The nurse claimed that she was discriminated against on the basis of, among other things, disability, age and race.

The district court denied summary judgment with respect to an Age Discrimination in Employment Act (“ADEA”) claim, stating that the nurse had sufficiently demonstrated an issue of fact sufficient to survive a summary judgment motion.  As to an Americans with Disabilities Act (“ADA”) claim, the nurse argued that she could have and would have performed the essential functions of her job with reasonable accommodation.  This issue of fact was enough for the claim to survive summary judgment.

The court granted summary judgment for the race claim because the nurse failed to demonstrate that similarly situated employees of a different race were treated differently.  The court denied summary judgment on the age and disability claims because the nurse’s ADEA and ADA claims provided genuine issues of fact that needed to be addressed.

Masri v. Wis. Labor and Indus. Review (Summary)

EMPLOYMENT CLAIM/WRONGFUL TERMINATION

Masri v. Wis. Labor and Indus. Review, No. 2012AP1047 (Wis. Ct. App. Apr. 2, 2013)

An appellate court affirmed an agency’s determination that a psychologist intern was not an employee protected by the state’s health care worker protection statute, and so was not entitled to a court review of her complaint.

The intern was a doctoral candidate at a university completing an unpaid internship with the university’s medical college.  During this time, she worked 40 hours a week at the hospital and was provided with office space, support staff, free parking, full access to facilities and patient records, and professional networking opportunities.

During this time, the intern reported alleged medical ethics violations to a medical college official.  Thereafter, her internship was terminated.  She then filed a complaint with a state agency, alleging that the state’s health care worker protection statute protected her from retaliation by the medical college for reporting her medical ethics concerns.  The agency ruled that the intern was not an employee, and so did not come under the protections of the statute.

The court noted that while the relevant section of the statute uses the term “person[s]” to refer to protected individuals, other parts of the statute that interact with the relevant section expressly apply only to employees.  The section defining the types of disciplinary actions prohibited by the relevant section defines such actions as “any action taken with respect to an employee….”  For this reason, along with other, similar references to “employees” rather than “persons” in the statute, the court found that the legislature intended the statute to protect only employees from retaliatory behavior for filing a protected report.

The court concluded that the agency’s conclusion that the intern was not an employee was reasonable.  It found that many courts have determined that some sort of compensation is essential to an employee/employer relationship.  Because the intern did not have a salary and her parking, office space, and the like were provided to enable her to perform her assigned duties, she was not compensated for her work.  In addition, the promise of health insurance that was not given and a willingness to pay a salary at some future time, contingent on the receipt of grant funding, were insufficient to render the intern an employee of the medical college.

Tate v. Univ. Med. Ctr. of S. Nev. (Summary)

CONDITIONAL REAPPOINTMENT

Tate v. Univ. Med. Ctr. of S. Nev., No. 2:09–CV–01748–LDG (NJK) (D. Nev. Mar. 26, 2013)

The court granted summary judgment to the medical center, medical staff, board of trustees, and the chief of the medical staff on all of a doctor’s claims related to his conditional reappointment and the subsequent expiration of his reappointment.

After an incident between the doctor and a patient’s family, the physician was granted reappointment and clinical privileges for a period of only three months, rather than the typical two-year period.  The physician also was required to satisfy certain conditions, namely that he had to: (1) submit to a full mental and physical evaluation with the state health professionals foundation; (2) submit to an evaluation for drug and alcohol dependence with a foundation; and (3) demonstrate evidence of enrollment in an anger management program of the foundation.

The three-month reappointment and grant of privileges was renewed twice.  The appointment and privileges were not renewed a third time because the physician had not provided notice of compliance with the conditions of his reappointment and had not requested an extension.  Thereafter, the doctor brought his action.

In his first claim, the doctor alleged that he had a property interest in his clinical privileges and that these were denied without due process.  The court found that any protected interest in reappointment was not a protected interest in a two-year reappointment to the medical staff and that due process only came into play upon a denial of the reappointment request.  The medical staff bylaws did not recognize a shortened appointment as an adverse action.  Furthermore, a three-month reappointment could not constitute a denial because it did not preclude any reapplication to the medical staff for a period of up to two years.

The court found that the physician had a protected interest in appointment and the grant of privileges themselves, which was not denied by his conditional, shortened reappointment and grant of privileges.  Accordingly, the physician had not identified a protected property interest on which to base his due process claim.

The court also found that the doctor could not maintain any action based on his application for reappointment, because his application contained a waiver by which he agreed to release the medical center from liability for acts made in connection with the credentialing process.

With respect to his contract claim, the court found that the physician could not maintain an action concerning the termination of the contract based on the fact that the contract terminated after three months, rather than after two years.  The offers of membership and clinical privileges clearly specified that the terms of reappointment would be for three months, rather than two years.  Thus, when the contract ended after three months, there was no breach.

Cabotage v. Ohio Hosp. for Psychiatry, LLC (Summary)

FALSE CLAIMS ACT

Cabotage v. Ohio Hosp. for Psychiatry, LLC, No. 2:11–cv–50 (S.D. Ohio Mar. 26, 2013)

In this False Claims Act (“FCA”) retaliation case, a trial court granted summary judgment to a psychiatric hospital and the company that operated it on all of a nurse’s claims related to the termination of her employment.  The nurse had become concerned that the hospital’s medical director was engaging in fraudulent and illegal activities.  She assumed that claims related to such activities were being submitted to Medicare and Medicaid.  She reported these concerns to her immediate supervisor and the vice president of human resources.  She also called the Medicare Fraud Hotline, which prompted an on-site investigation by the Ohio Department of Mental Health.  In addition, the nurse took copies of various confidential documents home as part of her investigation of her concerns.

At one point, the nurse stated that a patient told her that she did not want to take the medicine that had been prescribed for her by the medical director and that the medical director had not seen her.  The nurse stated, at the patient’s request, that she then called the patient’s daughter from home to tell her about the patient’s concerns.  Afterward, the nurse was terminated for contacting a patient’s family member from home, without authorization.

The nurse alleged that she was engaged in whistle-blowing activity, that the hospital knew about her activity, and that it fired her in retaliation, in violation of the FCA.

The court granted summary judgment to the hospital with respect to the FCA claim.  Under the FCA, a person has recourse for a retaliatory discharge if (1) the individual engages in activity protected by the act, (2) the employer knew that the individual was engaging in the protected conduct, and (3) the employer retaliated against the individual, at least in part, because of his or her protected activity.

“Protected activity” means conduct “in furtherance of an action.” As per the court, merely reporting concerns to a supervisor, as the nurse did, does not constitute protected activity.  Because the nurse merely raised her concerns with supervisors and assumed that false claims were being submitted to the government, the court found that the nurse’s conduct did not rise to the level of protected activity.

Furthermore, the court found that, even assuming that the nurse had properly alleged a retaliation claim, the hospital met its burden of showing that it would have made the same decision absent any protected conduct, because the nurse violated the hospital’s confidentiality policies by contacting a patient’s family from home without proper authorization.

Gastroenterology Consultants v. Meiselman (Summary)

RESTRICTIVE COVENANT

Gastroenterology Consultants v. Meiselman, No. 1-12-3692 (Ill. App. Ct. Apr. 15, 2013)

The Appellate Court of Illinois affirmed a lower court’s denial of a physician group’s motion for a preliminary injunction that would have prevented a former physician of the group from soliciting patients and from treating patients except in medical emergencies.

The physician had a contract with the physician group that prohibited him from soliciting or treating patients of the group within a 15-mile radius of the group’s office for a period of 36 months following the termination of employment.  However, a few months after the termination of his employment, the physician was treating any patient who requested his services, including patients he had treated while working for the physician group.

The appellate court affirmed the lower court’s decision, finding that the lower court considered all of the possibilities in determining whether the physician group had a legitimate business interest in need of protection.  The appellate court found that the group did not have a near-permanent relationship with the patients treated by the physician, that the physician had practiced in the area for ten years before joining the group and preserved the independent relationship he had already established, that referrals were made individually, not to the group itself, that the physician billed for his own services, and that he maintained his own office and telephone number.  Thus, the appellate court confirmed that the group did not have a legitimate business interest in the patients solicited by the physician.

Read v. Haley (Summary)

STATE MEDICAL BOARD – LICENSE REVOCATION

Read v. Haley, No. 3:12-cv-02021-MO (D. Or. Apr. 10, 2013)

The United States District Court for the District of Oregon granted a motion to dismiss filed by individual defendants of a state medical board involved in the board’s decision to revoke a physician’s license.

The physician submitted an application for the renewal of the active status of his medical license, and disclosed that he had been unemployed for four years and ceased the active practice of medicine.  A committee of the medical board recommended that the physician’s license be changed to inactive, and the medical board informed the physician that if he wanted active status, he would be required to undergo an evaluation that must include an assessment of medical knowledge, clinical skills and psychiatric health.

The physician challenged the medical board’s decision, and the board conducted an interview with the physician.  The physician failed to answer questions at the interview, and did not undergo the evaluation, leading the medical board to inform the physician that his license would remain inactive due to his failure to provide the board with the information it requested.  The physician again requested that the board change his status to active, and the medical board issued an order for evaluation, and also stated that failure to comply with the order could result in disciplinary action.  The physician did not undergo the evaluation, and his license was revoked.  The physician brought suit, claiming that the medical board violated a number of his constitutional rights.

The district court held that the physician’s claims of constitutional rights violations were barred by immunity, and stated that immunity protects the medical board members from harassment and intimidation in the performance of their duties, and that the board members were acting in a capacity that was sufficiently similar to a judge or prosecutor as to warrant immunity.

Di Teresi v. Stamford Health Sys. (Summary)

NEGLIGENT/INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

Di Teresi v. Stamford Health Sys., No. 33052 (Conn. App. Ct. Apr. 23, 2013)

The Appellate Court of Connecticut affirmed a lower court’s grant of summary judgment in favor of a hospital after a patient’s daughter brought suit against the hospital for emotional distress after she claimed the hospital mismanaged the aftermath of a nurse’s sexual assault on her ill mother.

The daughter claimed that the hospital delayed in informing her of the incident, denying her the ability to comfort her mother and ensure that she was cared for in the wake of the assault, and the lower court granted the hospital summary judgment on the emotional distress claims, which the daughter appealed.

The appellate court held that the hospital did not have a duty to report the incident any faster than it did, and the fact that it was foreseeable that such information might cause emotional distress is not enough to establish liability, stating that allowing such liability to stand may incentivize a hospital to engage in rash reporting of unconfirmed incidents.  The appellate court also affirmed the lower court’s determination that the hospital’s conduct in responding to the assault was not outrageous or reckless, and noted that even if the delay in reporting to the daughter was motivated by public relations concerns, there is no evidence that the hospital intended to inflict emotional distress.  The appellate court noted that the hospital took the time to investigate a sensitive issue and consult with counsel, behavior that the court did not find to be outside the bounds of decency.

The appellate court also affirmed summary judgment on the claim of breach of fiduciary duty, holding that the hospital did not owe a fiduciary duty to the mother because she was in the hospital for comprehensive care, not for a particular procedure performed by a physician.  In addition, the appellate court did not see the benefit gained by the hospital in withholding the news from the daughter for only a few hours, and that the brief concealment of the incident did not amount to fraud on the part of the fiduciary.