Zoellner v. St. Luke’s Reg’l Med. Ctr., Ltd. (Summary)

ANTITRUST

Zoellner v. St. Luke’s Reg’l Med. Ctr., Ltd., No. 1:11-cv-00382-EJL (D. Idaho Mar. 31, 2013)

The U.S. District Court for the District of Idaho granted in part and denied in part a hospital’s motion to dismiss an anesthesiologist’s suit alleging state and federal antitrust violations and state law tortious interference claims.  The anesthesiologist was allegedly forced to resign his employment with an anesthesiology group, which had an exclusive contract to provide anesthesia services at the hospital.  The anesthesiologist claimed that the hospital pressured the group to force his resignation because of his complaints that the neurosurgeons at the hospital were “scheduling surgeries at times that are not in the patients’ best interests.”

The hospital filed a motion to dismiss the anesthesiologist’s suit.  The court dismissed the anesthesiologist’s antitrust claims, concluding that he failed to allege “antitrust injury” through a showing of reduced competition in the market for anesthesiology services because of his alleged forced resignation.  The court also rejected the anesthesiologist’s state law intentional interference with contract claim because such claims are not recognized in Idaho when an employment contract can be terminated without cause, as was the case here.  However, the court allowed the anesthesiologist’s intentional interference with prospective economic advantage claim to go forward, finding that whether the hospital’s alleged interference with the anesthesiologist’s employment was “wrongful” was a question of fact that could not be resolved in a motion to dismiss.

U.S. ex rel. Hobbs v. MedQuest Assocs., Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Hobbs v. MedQuest Assocs., Inc., No. 11-6520 (6^th Cir. Apr. 1, 2013)

In this False Claims Act case, the Sixth Circuit Court of Appeals reversed a lower court’s grant of summary judgment for the relators who had brought the action. An employee brought suit against a diagnostic testing company for Medicare fraud. The employee claimed that the company used supervising physicians who were not enrolled in Medicare and failed to enroll one of the company’s independent diagnostic testing facilities in Medicare and used another physician’s billing number.

The court held that the use of unapproved physicians did not constitute fraud. As for the supervision method used, the court stated that Medicare regulations require only that a physician be present in the office – the physician does not have to be in the room where the procedure is being performed. The court stated that the company provided this level of supervision, even though the physicians were not enrolled in the Medicare program. The court also noted that the False Claims Act does not govern this type of technical compliance with federal regulations.

The court also held that the failure to reregister the testing facility was not a legitimate claim under the False Claims Act. The court stated that this was nothing more than a failure to update enrollment information, which was not a violation of the conditions of payment. The federal government also failed to cite any regulation governing the diagnostic testing company’s conduct which showed wrongful action taken by the company under the Act.

U.S. ex rel. Keltner v. Lakeshore Med. Clinic, Ltd. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Keltner v. Lakeshore Med. Clinic, Ltd., No. 11-CV-00892 (E.D. Wis. Mar. 28, 2013)

The United States District Court for the Eastern District of Wisconsin granted in part and denied in part a multispecialty medical group’s motion to dismiss a False Claims Act suit under state and federal law brought by a former employee.  The former employee worked in the medical group’s billing department and alleged that the medical group violated the False Claims Act by, among other things, upcoding bills for evaluation and management services (“E/M services”) and submitting claims to Medicare with physicians’ stamped signatures.

The medical group filed a motion to dismiss.  With respect to the upcoding claims, the court denied the medical group’s motion, concluding that “[a]lthough [relator] does not allege that [the medical group] knew that specific requests for reimbursement for E/M services were false, she claims that [the medical group] ignored audits disclosing a high rate of up coding and ultimately eliminated audits altogether.”  Regarding the claim rooted in the use of stamped signatures, the court dismissed it, finding that “[t]he fact that [a physician] used a signature stamp does not mean that claims for payment for his services were fraudulent.”

Lastly, the court allowed the relator’s retaliation claim under the False Claims Act to go forward.  According to the court, the relator’s allegations that the medical group told her to stop “digg[ing] up problems,” required her to meet with a supervisor, and then discharged her in response to her reports of fraud were enough to suggest she had been fired because of the actions she took in furtherance of her False Claims Act suit.

U.S. ex rel. Osheroff v. Tenet Healthcare Corp. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Osheroff v. Tenet Healthcare Corp., No. 09-22253-CIV (S.D. Fla. Mar. 27, 2013)

The United States District Court for the Middle District of Tennessee dismissed with prejudice a qui tam relator’s False Claims Act suit against a medical clinic and affiliated managed care organization.

The relator alleged that the medical clinic offered lavish inducements, such as free meals and rides in limousines, to encourage Medicare beneficiaries to patronize the clinic and enroll in Medicare Advantage plans offered by the affiliated managed care organization in violation of the federal Anti-Kickback and Anti-Inducement statutes.  The defendants filed a motion to dismiss, arguing that the court should reject the relator’s False Claims Act suit because the allegations in the relator’s complaint were substantially the same as allegations exposed by the Miami Herald and transactions found on the clinic’s website and thus were subject to the False Claims Act’s “public disclosure bar.”  The court agreed, noting that, to constitute a public disclosure bar to qui tam actions, publicly disclosed allegations “need only be sufficient to place the Government on notice about the possibility of fraud.”  The Miami Herald’s article and information on the clinic’s website did just that.  Moreover, the court ruled that the relator is not an original source of information under the False Claims Act because he does not have knowledge that is “independent of, and materially adds to, the publicly disclosed allegations or transactions.”

Mir v. Med. Bd. of Cal. (Summary)

MEDICAL BOARD APPEAL

Mir v. Med. Bd. of Cal., No. 12cv2340-GPC-DHB (S.D. Cal. Mar. 19, 2013)

The United States District Court for the Southern District of California denied a physician’s motion seeking injunctive and declaratory relief from the California Medical Board’s decision to revoke his medical license.  The medical board’s action commend in 2003 when the physician was first charged with gross negligence after performing a series of surgeries on an 81-year-old woman that ultimately led to an above-the-knee-amputation due to gangrene. After an initial determination to revoke the physician’s license in 2007, and a lengthy appeal process, the medical board finalized its decision in 2012. However, the district found that the physician failed to present any comprehensible facts to support his motion, instead finding that the physician’s motion “includes confusing assertions that mix law and facts.”

In Mir v. Med. Bd. of Cal., No. 12cv2340-GPC-DHB (S.D. Cal. May 8, 2013), the United States District Court for the Southern District of California granted the Medical Board of California and the other defendants’ motion to dismiss the physician’s first amended complaint.  The Court also denied the physician’s motion for reconsideration of the Court’s order denying the physician’s preliminary injunction.  The Court concluded, among other things, that the Medical Board of California was entitled to immunity under the Eleventh Amendment , the physician failed to state a claim under 42 U.S.C. § 1983, and the physician failed to provide facts necessary to obtain a preliminary injunction.

Henderson v. Montefiore Med. Ctr. (Summary)

DISCRIMINATION AND RETALIATION CLAIMS

Henderson v. Montefiore Med. Ctr., No. 12 CV 1468(HB) (S.D. N.Y. Mar. 21, 2013)

The United States District Court for the Southern District of New York partially granted and partially denied a medical center’s motion for summary judgment against a former employee’s allegations of discrimination and retaliation.  In the case, the employee is a black woman who suffers from multiple sclerosis.  She is board certified in Obstetrics and Gynecology and Maternal-Fetal Medicine.  She served as the Chief of Maternal-Fetal Medicine (“MFM”) at a hospital that was subsequently acquired by the medical center.  After this acquisition, the medical center eliminated the employee’s Chief of MFM position.  In the two years after the medical center acquired the local hospital, the employee was cited for 11 deviations from the standard of care.  The medical center ultimately intervened with a meeting between the employee and the medical center’s Senior Medical Director.  The Director’s notes from this meeting included comments about the employee’s slow movements – these movements were the result of the employee’s MS.  During the meeting, the employee raised concerns that she was the victim of disability and racial discrimination, but the Director did not follow the medical center’s protocol that required him to report such complaints to the medical center’s administrators.  The medical center then retained an outside consultant to review the employee’s conduct, and he concluded that the employee required at least temporary supervision if she were to continue to practice medicine.  Rather than adopting this suggestion, the medical center terminated the employee.  The employee then sued for racial and disability discrimination and retaliation.

In its evaluation of the employee’s discrimination claims, the court began by concluding that the employee had established a prima facie case for discrimination.  The court then concluded that the medical center’s negative appraisals of the employee’s work provided legitimate reasons for terminating her employment.  However, the court concluded that questions of fact remained as to whether the termination was at least partially motivated by a discriminatory animus.  For the court, these questions of fact emerged from the Director’s notes about the employee’s slow movements – these notes indicated to the court that the employee’s disability was on the Director’s mind when he terminated her employment.  Furthermore, the Director’s failure to address the employee’s complaints of discrimination suggested a possible discriminatory animus.  Finally, the medical center’s replacement of the employee with nonblack and nondisabled physicians could allow a fact finder to infer a discriminatory animus.  Accordingly, the court denied the medical center’s motion for summary judgment of the discrimination claims.

With regard to the employee’s allegation of retaliation, the court looked for a causal nexus between a protected activity and an adverse employment action.  Here, the protected activity was the employee’s complaint to the Director that she had suffered from racial and disability discrimination.  The adverse employment action was her termination four months later.  The court concluded that a finder of fact might conclude that these two events were close enough in time to infer a causal nexus.  Accordingly, the court denied the medical center’s motion for summary judgment of the employee’s retaliation claim.

Finally, the court addressed the employee’s discriminatory demotion and failure-to-promote claims.  Here, the court cited the medical center’s non-discriminatory justifications for demoting the employee – the demotion was necessary to ease the integration process after the medical center acquired the hospital where the employee served as Chief of MFM, and the Chief of MFM position was redundant after the integration.  Thus, the court concluded that the employee had failed to present any evidence that her demotion and failure to be promoted were tainted with a discriminatory animus.  Accordingly, the court granted the medical center’s motion for summary judgment for these claims.

Dookeran v. County of Cook (Summary)

DEFAMATION

Dookeran v. County of Cook, No. 1-11-1095 (Ill. App. Ct. Mar. 22, 2013)

The Appellate Court of Illinois affirmed a trial court’s grant of summary judgment against a physician’s allegation of defamation and held that res judicata barred the physician’s remaining claims against a county in Illinois that conducted business as a hospital.  In the case, a physician was denied reappointment to a hospital because the hospital discovered that the physician had willfully failed to disclose a letter of reprimand that a prior employer had issued and that he had a history of verbally abusing hospital personnel.  The physician contested the denial of reappointment through the hospital’s administrative procedures.  While the hospital’s administrative review was pending, the physician filed a civil complaint.  The appellate court’s decision here addresses the allegations of this civil complaint.

The court concluded that res judicata applied to the physician’s retaliatory discharge and breach of contract claims.  For both of these allegations, the court concluded that the issues had been fully tried via the administrative process, had involved the same parties, and had achieved a final verdict.  Here, the court applied a transactional test that considered whether the allegations arose from a single group of operative facts.  Because the court concluded that the claims in the civil action satisfied the transactional test, the court concluded that the claims were barred under res judicata.

Furthermore, the court sustained the grant of summary judgment based on its review of the record that led the court to conclude that the allegedly defamatory statements were in fact true.  Accordingly, the court affirmed the grant of summary judgment.

Hagen v. Siouxland Obstetrics & Gynecology, P.C. – March 2013 (Summary)

GROUP EMPLOYMENT TERMINATION

Hagen v. Siouxland Obstetrics & Gynecology, P.C., No. C 11-4047-MWB (N.D. Iowa Mar. 20, 2013)

The United States District Court for the Northern District of Iowa partially denied a medical group’s motion to strike evidence submitted by a physician (and former equity owner, president and director of the group) and denied the medical group’s motion for partial summary judgment.  However, the court also cautioned the physician from taking his claims to trial, because the court anticipated that the physician would come across to the jury as an “arrogant jerk” and would be unlikely to recover alleged damages from a jury verdict.

The following facts spurred the court’s biting evaluation of the physician and his dim prospects for success in this legal proceeding.  The physician was a shareholder in a medical group that eventually had four physician shareholders.  He had a long history of berating and threatening nurses, being intoxicated while on call, and conducting himself in an unprofessional manner.  When the physician asked a staff member of the medical group to fill out his medical license applications for the various state medical licensing boards, the staff member filled out the forms incorrectly and forged notarized signatures on the applications, and because of the inconsistencies in the applications, one state eventually requested that the physician withdraw his application for medical licensure.  In addition, the physician stated that he believed that one of the medical group’s shareholders and a hospital where the medical group practiced had committed malpractice, and he threatened to report the malpractice.

The three remaining shareholders of the medical group lost all tolerance for the physician’s bad behavior, and they held a secret meeting during which they decided to terminate the physician’s employment with the medical group.  The physician then sued for a host of claims that can be categorized into the three general categories of negligence, licensure application (vicarious liability) claims, and wrongful termination claims.  The medical group moved for summary judgment of the licensure application and wrongful termination claims.

The court denied the motion for summary judgment of the licensure application claims on the basis that factual questions still existed as to whether the medical group was vicariously liable for the allegedly fraudulent conduct of the employee who filled out the physician’s application forms.  Likewise, the court denied the motion for summary judgment of the wrongful termination claims because the court concluded that genuine issues of material fact existed.  Thus, although the court’s opinion discouraged the physician from taking his case to trial, the opinion itself concluded that all of the physician’s claims had issues of material fact that had to be resolved by a jury.

U.S. ex rel. Simms v. Austin Radiological Assoc. (Summary)

Discovery – Compliance Officer Privilege

U.S. ex rel. Simms v. Austin Radiological Assoc., No. A-10-CV-914-AWA (W.D. Tex. Mar. 18, 2013)

In this false claims case, the United States District Court for the Western District of Texas granted in part and denied in part multiple motions to compel discovery. A former employee brought suit against a radiology group alleging that the company wrongfully retained millions of Medicare/Medicaid overpayments and fraudulently billed the government for bone density scans that were interpreted by technicians instead of physicians. The employee claimed that her investigation led to a retaliatory termination. The relator filed motions to compel discovery and the radiology group filed objections, claiming, in part, that documents maintained by its compliance officer were privileged under state law and not subject to discovery.

The district court held that the compliance officer’s documents were not privileged and were subject to discovery. The court interpreted the state statute regarding compliance officers as not creating a “new” privilege; rather, it found the statute cited by the radiology group merely incorporated protections already in existence, but that these protections did not affect the scope of discovery. Furthermore, the district court rejected the radiology group’s argument that the state’s peer review protection extended to compliance officers, noting that compliance officers are purposefully excluded from discovery protection.

Patterson v. St. Dominic-Jackson Mem’l. Hosp. (Summary)

SEX DISCRIMINATION (NURSE)

Patterson v. St. Dominic-Jackson Mem’l. Hosp., No. 3:11-cv-623-CWR-FKB (S.D. Miss. Mar. 19, 2013)

The United States District Court for the Southern District of Mississippi denied a hospital’s motion for summary judgment on a nurse’s sex discrimination and retaliation claims. The nurse applied and was interviewed for one of four “RN Team Lead” positions in the emergency department at the hospital. However, all four positions were filled by men, and there was a rumor that the supervisor was not interested in hiring women because she thought they were too emotional and could not deal with the stress of the job. After the nurse filed a complaint, her supervisor brought forward a list of over 100 medical charts that the nurse had accessed in violation of the hospital’s privacy policy. At the supervisor’s suggestion, the nurse was terminated from her position.

The district court held that the nurse was within the statutory period to file the complaint. It was reasonable for the nurse to assume that she was in the running for the job up until she was informed that all four positions had been filled. The court considered rumors of the supervisor’s desire to not hire females as nothing more than office gossip.

The district court also held that the nurse demonstrated a causal link between her complaint and her eventual termination. The nurse had received excellent evaluations and had no history of disciplinary problems. Although the supervisor argued that accessing unassigned patients was inappropriate, other nurses in the emergency department claimed to access unassigned charts for a number of legitimate reasons. These nurses were never disciplined for violating the hospital’s privacy policy. The district court felt that this dispute over the reason for reporting the privacy violation was enough to survive the motion to dismiss.