U.S. ex rel. Assocs. Against Outlier Fraud v. Huron Consulting Group, Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Assocs. Against Outlier Fraud v. Huron Consulting Group, Inc., No. 09 Civ. 1800 (JSR) (S.D. N.Y. Mar. 5, 2013)

In this False Claims Acts (“FCA”) case, the United States District Court for the Southern District of New York granted summary judgment in favor of a consulting firm hired to revitalize a hospital’s revenue cycle, and its fiscal intermediary.

The hospital’s board retained a consulting firm, which recommended that the hospital increase its pricing, which the hospital did, and which also increased the hospital’s outlier reimbursements from Medicare. A hospital administrator contacted its fiscal intermediary and disclosed that she was concerned that the hospital may have received excessive outlier payments after the price increases.

While the court found that raising the hospital’s charges while benefitting from a stale cost-to-charge ratio may have been a bad practice, it found that it was not forbidden. Therefore, it granted summary judgment to the consulting firm on the FCA claims against it.

The relator also alleged that the fiscal intermediary violated the FCA by recklessly authorizing the payments in violation of its contract with the government. The trial court also found that no statute or regulation expressly requires a fiscal intermediary to refuse to forward any outlier charge that is calculated based on a stale cost-to-charge ratio. Instead, the reconciliation process, through which excessive reimbursements are recovered, only requires fiscal intermediaries to flag potential excess reimbursement, which it did. Therefore, the court granted summary judgment to the fiscal intermediary on the FCA claim against it as well.

U.S. ex rel. Upton v. Family Health Network, Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Upton v. Family Health Network, Inc., No. 09 C 6022 (N.D. Ill. Mar. 4, 2013)

In this False Claims Act (“FCA”) case, the United States District Court for the Southern District of Illinois denied a managed care organization’s (“MCO”) motion to dismiss the federal and state FCA claims against it.

The MCO contracted with the state and federal governments, agreeing not to discriminate based on health status, and certified quarterly that it would not participate in such discrimination. However, the relator alleged that the MCO routinely submitted claims to Medicare and Medicaid, while discriminating based on health status by refusing to enroll high-cost individuals.

The court found that the relator had stated FCA claims against the MCO and denied its motion to dismiss.

Meier v. Awaad (Summary)

HIPAA

Meier v. Awaad, No. 310808 (Mich. Ct. App. Mar. 12, 2013)

The Michigan Court of Appeals reversed a trial court’s order that required the disclosure of the names and addresses of all Medicaid beneficiaries treated by a pediatric neurologist in a medical malpractice suit.  The appeals court found that the HIPAA Privacy Rule permits state law to govern when it is more protective than HIPAA.  In this case, Michigan law is more protective since it requires the patient to waive the physician-patient privilege, and since the privilege was not waived, access to their records was impermissible.

Dhillon v. Tenn. Health Related Bd. of Exam’rs (Summary)

CIVIL RIGHTS

Dhillon v. Tenn. Health Related Bd. of Exam’rs, No. 3-12-0151 (M.D. Tenn. Mar. 7, 2013)

A magistrate judge for the United States District Court for the Middle District of Tennessee recommended that the district judge dismiss all claims brought by a former physician against the hospital that had previously employed him, the hospital’s peer review board, the state Board of Medical Examiners, the attorneys at his hearings before the Board, and others.

The physician obtained his license to practice medicine in Tennessee in 1999.  However, within three years, concerns about the quality of care that he provided arose to the level that a hospital that employed the physician initiated peer review proceedings, which resulted in the physician’s employment being terminated.  Although the physician continued to practice at other hospitals, the state Board of Medical Examiners placed the physician’s license on probationary status and later indefinitely suspended his license for exhibiting a pattern of negligent and incompetent practice.

The physician filed suit in state court, although most of the allegations in state court were dismissed, and despite the pending status of the state court proceedings, the physician filed a lawsuit in federal court, alleging breach of fiduciary duty, unfair competition, disparate treatment and racial bias, violation of his due process rights, violation of Title VII, and state law claims.

The magistrate judge described the federal case as a “legal quagmire of [the physician’s] own making,” and his claims as a “hodgepodge of legal theories of recovery,” and recommended that the judge dismiss all of the physician’s federal claims with prejudice because he failed to state claims upon which relief could be granted.

Sesso v. Mercy Suburban Hosp. (Summary)

AGE DISCRIMINATION

Sesso v. Mercy Suburban Hosp., No. 11-5718 (E.D. Pa. Mar. 13, 2013)

The United States District Court for the Eastern District of Pennsylvania denied a hospital’s motion for summary judgment in a physician’s age discrimination lawsuit, finding that non-renewal of the physician’s contract, not asking the physician if he was willing to work full-time, and statements made by hospital administration regarding the expectation that the physician would retire, was evidence of discrimination.

Ihegword v. Harris County Hosp. Dist. (Summary)

NATIONAL ORIGIN DISCRIMINATION/ADA

Ihegword v. Harris County Hosp. Dist., No. H-10-5180 (S.D. Tex. Mar. 7, 2013)

The United States District Court for the Southern District of Texas granted a hospital’s motion for summary judgment against a nurse who had previously been employed by the hospital.

The nurse alleged that she was fired as the result of national origin discrimination (she was Nigerian), disability discrimination, and retaliation, and that she had not received overtime wages.

The court granted summary judgment on the national origin discrimination claim because it concluded that the nurse failed to allege sufficient facts that would enable a jury to conclude that the hospital intentionally discriminated against her on the basis of her national origin. Although the court noted that the nurse and one of her Nigerian colleagues had both filed grievances regarding perceived discriminatory treatment, the court concluded that these grievances did not amount to sufficient evidence that the nurse’s termination was caused by animus for her national origin.

Furthermore, the court concluded that the nurse failed to establish a prima facie case for national origin discrimination because she failed to identify anyone outside of her protected class who was treated more favorably than she under nearly identical circumstances.

The court granted summary judgment on the disability discrimination claim because it concluded that the hospital had provided the nurse with reasonable accommodation for her alleged disability of osteoarthritis of her knees. When the nurse first requested that the hospital modify her work schedule as a reasonable accommodation for her osteoarthritis, the hospital granted her request and modified her work schedule. The court considered this modification to be adequate and timely accommodation of her disability.

The court granted summary judgment on the retaliation claim on two grounds.  First, although the nurse alleged that she was subjected to disciplinary actions that were retaliatory in nature, the court noted that these disciplinary actions were in response to conduct that the nurse acknowledged that she engaged in even though it was prohibited by the hospital.  Second, the court concluded that the time period between the nurse’s reasonable accommodation and her termination from employment (17 months) was too long for the court to identify a causal relationship between the accommodation and the termination.

Finally, the court granted summary judgment on the unpaid wages claim because the nurse failed to produce any evidence that she performed work for which she was never paid.

Moran v. S. Coast Med. Ctr. (Summary)

REAPPOINTMENT DENIAL

Moran v. S. Coast Med. Ctr., G045628 (Cal. Ct. App. Mar. 11, 2013)

The California Court of Appeal affirmed a trial court’s denial of a physician’s writ of mandate to compel a hospital to vacate its decision to deny his reappointment and to withdraw a report sent to the Medical Board of California.  The court concluded that the hospital’s decision to deny reappointment had been based upon substantial evidence and had been subject to a meaningful appeals process that was in compliance with California’s Business and Professions Code.

Huang v. Rector & Visitors of the Univ. of Va. (Summary)

FALSE CLAIMS ACT

Huang v. Rector & Visitors of the Univ. of Va., 3:11-cv-00050 (W.D. Va. Mar. 7, 2013)

The United States District Court for the Western District of Virginia denied defendants’ motion for judgment as a matter of law in a False Claims Act (“FCA”) retaliation case.

A researcher at a university obtained a federal research grant, and after he noticed and reported that his funding was being misallocated within his research group, he was terminated from the group. The researcher filed an FCA retaliation claim and a jury awarded him lost wages and compensatory damages against the individual defendants. After the verdict, the individual defendants moved for judgment as a matter of law.

The court denied the individual defendant’s motion for judgment as a matter of law because it concluded that the defendants waived their right to so move. The court found that although defendants sought judgment on the issue that the FCA does not provide for individual liability, the defendants failed to raise this issue during the trial, and the court therefore concluded that the defendants had waived their argument that the FCA does not provide for individual liability.

United States v. Alpharma, Inc. (Summary)

FALSE CLAIMS ACT

United States v. Alpharma, Inc., No. ELH-10-1601 (D. Md. Mar. 5, 2013)

The United States District Court for the District of Maryland granted a pharmaceutical corporation’s motion to dismiss in this False Claims Act (“FCA”) case.

An employee of the corporation filed a qui tam action against the corporation for fraudulent submissions to Medicaid, claiming that the company was marketing a topical pain medication in ways that were not approved by the FDA, and that these off-label prescriptions were submitted to Medicaid for reimbursement.

The district court held that the employee did not provide sufficient evidence to support his claims of fraud. It stated that the FCA requires that specific instances of fraud be alleged in the complaint, and since the employee’s complaint relied on the inference that some of the prescriptions filled by the marketing scheme must have been reimbursed by government entities, these were general allegations provided by the employee.

Goldberg v. Rush Univ. Med. Ctr. (Summary)

FALSE CLAIMS ACT

Goldberg v. Rush Univ. Med. Ctr., No. 04 C 4584 (N.D. Ill. Mar. 6, 2013)

The United States District Court for the Northern District of Illinois denied in part and granted in part motions to dismiss submitted by a medical center, a surgery center and a physician group, among others, all defendants in this False Claims Act (“FCA”) case.

The relators filed a qui tam action against the medical center, surgery center, a physician group and individual physicians for fraudulent claims billed to Medicare and Medicaid. The relators alleged that for nine years the defendants were billing for surgeries performed by residents who were improperly supervised or by surgeons performing overlapping surgeries, in violation of the Medicare and Medicaid rules and regulations.

The district court held that the relators alleged sufficient facts to survive the motion to dismiss against the surgery center and physician group. The court stated that each of the paragraphs in the complaint alleged specific instances of claims that were submitted to Medicare, and the fact that the relators did not have information on whether or not the claims were actually submitted was not relevant because that information was inaccessible to the relators. The district court also held that the relators’ complaint sufficiently alleged the “who, what, when, where, and why” necessary to allege fraud, since the relators specifically named certain physicians who engaged in the surgery scheme as well as detailed the fact that the surgery fraud was taking place in the medical center and the surgery center during the nine years indicated. The district court found that the details of the surgery schedules sufficiently demonstrated how the overlapping and unsupervised surgeries were being carried out.

The district court dismissed the medical center from the action, finding that the relators failed to allege that the medical center was knowingly submitting fraudulent claims, and the fact that the medical center allowed doctors to schedule concurrent surgeries was not a cause of action under the FCA.