Wulff v. Sentara Healthcare, Inc. (Summary)

EMPLOYMENT DISCRIMINATION

Wulff v. Sentara Healthcare, Inc., No. 12–1262 (4th Cir. Mar. 4, 2013)

In this disability discrimination case, an appellate court affirmed summary judgment in favor of a health care corporation on a nurse’s claims for failure to accommodate, discriminatory termination, and retaliatory termination under the Americans with Disabilities Act (“ADA”).

The nurse worked at one of the corporation’s hospital’s emergency departments. In September 2009, she presented her employer with a doctor’s note, which restricted her from lifting more than ten pounds with her left arm for six weeks. The corporation accommodated this restriction. In December 2009, another doctor’s note extended the lifting restriction for an additional six weeks.

In March 2010, the corporation asked the nurse to update her restrictions. She returned a form with far stricter restrictions than before, including restrictions on pushing, pulling, climbing, and stretching and working above her shoulders. The corporation could not accommodate these restrictions and removed the nurse from the work schedule until the restrictions dissipated. Months later, the nurse informed the corporation that the restrictions had been lifted. It offered her an opportunity to return to work, but she never responded.

She then filed this lawsuit. However, the trial court granted summary judgment in favor of the corporation, because it found that the nurse could not perform the essential functions of her position.

The appellate court affirmed. With respect to the failure to accommodate claim, the nurse had to show that, with reasonable accommodation, she could perform the essential functions of the position. The nurse admitted in her deposition during discovery that her position required her to lift, push, or pull some amount of weight. Thus, her March 2010 form revealed that she could not perform some of the essential functions of her job, and summary judgment was appropriate on her claim.

As to the nurse’s discriminatory termination claim, the nurse had to establish that she fell within the ADA’s protected class, in other words, be “a qualified individual” with a disability. A “qualified individual” is someone who “with or without reasonable accommodation, can perform the essential functions of the employment position.” Because the court found that the nurse was unable to perform the essential functions of her position, as discussed above, she could not maintain a discriminatory termination claim.

Finally, with respect to the nurse’s retaliatory termination claim, the nurse had to produce evidence that (1) she engaged in protected activity, (2) Sentara took adverse action against her, and (3) there is a causal connection between the protected activity and the adverse employment action. Afterwards, the corporation had to articulate a legitimate, non-retaliatory reason for the termination of her employment. Even assuming that the nurse established a prima facie case of retaliatory discrimination, the corporation had a legitimate, non-retaliatory reason for the termination of her employment, because she was unable to perform the essential functions of her job. For those reasons, the appellate court affirmed summary judgment in favor of the corporation on all of the nurse’s ADA claims

United States v. Fadul (Summary)

FALSE CLAIMS ACT

United States v. Fadul, No. DKC 11–0385 (D. Md. Feb. 28, 2013)

A federal district court granted summary judgment to the government on its claim for payment by mistake of fact against a cardiovascular center, but denied the motion with respect to other claims under the False Claims Act (“FCA”).

The cardiovascular center provided mobile diagnostic services to residents of nursing homes. After completing a test, a technician electronically transferred the results to a radiologist who had been assigned by the cardiovascular center to read the test and produce a report. The mobile technicians and radiologists received compensation on a per-test basis.

The facility used billing software which required software-specific, non-CPT codes that were automatically translated to two CPT codes to bill insurers. This case involved two particular software-specific codes, which billed combination CPT codes automatically. First, the software-specific code for abdominal ultrasounds automatically generated CPT 76700 (abdominal ultrasound) and CPT 76770 (retroperitoneal ultrasound) codes. The government argued that these codes represented tests that require separate orders and are rarely performed on the same patient at the same appointment.

Second, the software-specific code for bilateral lower extremity venous studies automatically generated CPT 93970 (venous duplex ultrasound, bilateral) and CPT 93965 (non-invasive physiologic study of extremity veins) codes for billing. CPT 93965 was also billed when a technician reported that she had performed a unilateral lower extremity venous study. The government represented that these also were different tests. In fact, some of the center’s technicians admitted that they never performed CPT 93965 tests.

The cardiologist agreed that the tests were different and that automatic billing occurred, but disputed his knowledge of the practice and the extent of his involvement in the billing operations.

The government sought summary judgment on all of its claims.  As to its FCA claims, while it was undisputed that false claims were submitted to Medicare and Medicaid due to the automatic combination billing previously described, the claims had to be submitted “knowingly.”  Under the FCA, this can mean that a person actually knows that claims are improperly submitted, acts in deliberate ignorance of that fact, or acts in reckless disregard of whether false claims are being submitted.  In addition, the collective knowledge of employees cannot be used to prove knowledge on the part of a facility.  Rather, an individual employee must act knowingly to attribute the knowledge to the entity.  Because of disputes as to the cardiologist’s knowledge and involvement with the billing practices of the entity, the court denied the government’s motion for summary judgment as to its FCA claims.

However, the government also asserted a claim for payment by mistake of fact to recover claims that were improperly paid.  Because knowledge was not a requirement for that claim and the cardiologist did not dispute that claims were improperly paid, the court granted summary judgment to the government on the mistake of fact claim against the center in the amount of $682,947.74.

U.S. ex rel. Herron v. Indianapolis Neurosurgical Group, Inc. (Summary)

QUI TAM – FALSE CLAIMS ACT

U.S. ex rel. Herron v. Indianapolis Neurosurgical Group, Inc., No. 1:06–cv–1778–JMS–DML (S.D. Ind. Feb. 21, 2013)

The United States District Court for the Southern District of Indiana granted in part a medical group’s motion to dismiss a qui tam action brought by two medical coding experts (the “relators”) who alleged that the group violated the False Claims Act (“FCA”) by billing for services not provided or provided at a lower intensity than claimed.

In partially dismissing the suit, the court held that Indiana’s state version of the FCA did not apply retroactively to conduct that occurred prior to the act’s passage.  Therefore, any state-based FCA claims against former members of the medical group who left prior to the enactment of Indiana’s FCA could not survive.  In addition, the surviving state-based FCA claims against remaining members of the group would be limited to conduct that occurred after the statute’s enactment.

The court also dismissed all claims based on conduct that occurred more than six years prior to the filing of the case’s first complaint, finding that such claims were barred by the statute of limitations.

Finally, the court dismissed a retaliation claim brought by one of the relators, finding insufficient allegations that the medical group was on notice that the relator had filed a qui tam complaint against the group.  The relator argued that his retaliation claim should survive because the medical group knew that he believed that it was engaging in illegal billing practices.  However, the court rejected this argument as insufficient, holding that the notice requirement in a retaliation claim related to a qui tam action is only satisfied if the defendant is aware that the relator is pursuing a qui tam action or has reported the defendant’s conduct to the government.

York v. Health Mgmt. Assocs., Inc. (Summary)

PHYSICIAN EMPLOYMENT CONTRACTS

York v. Health Mgmt. Assocs., Inc., No. 5:10–cv–00094–RLV–DSC (W.D. N.C. Feb. 20, 2013)

The United States District Court for the Western District of North Carolina granted summary judgment, in part, in favor of a hospital management corporation and its physician-recruiting/employing subsidiary (the employer), both of which were being sued for breach of contract by an orthopedic surgeon whose employment contract fell through after he failed to obtain a state license to practice medicine.

The physician alleged that he incurred costs in relocating his family to North Carolina from California and that the employer was obligated to reimburse him for moving expenses, among other things.  The employer, on the other hand, argued that no payment was due because the employment contract was conditioned on the physician obtaining state licensure.

The court held that because the terms of the employment contract did not specify when the physician was required to obtain state licensure, it was implied that he had a reasonable amount of time to do so – and a “reasonable” time period for compliance may or may not correlate with the employer’s obligation to pay the physician pursuant to the contract.  Noting, though, that “reasonable” is an ambiguous contract term, the court allowed parole evidence to be admitted to further clarify whether the licensure requirement was truly a condition precedent to the contract or, alternatively, a requirement of the contract with which failure to comply would be deemed breach.

The parole evidence to be admitted included an agreement whereby the employer retained counsel to represent the physician before the state medical board.  That agreement specified that the physician was employed by the employer, conditional on his receiving a license from the state.  Noting that the parole evidence to be submitted by the employer was generally partial or related to other ongoing contractual negotiations, the court held that the jury should weigh the evidence and decide its effect on the contract’s interpretation.

Finally, the court dismissed the hospital management corporation from the lawsuit, noting that, without any allegations of fraud, or actual or constructive agency, against the company, it could not, as a parent of the subsidiary, be held liable for the subsidiary’s actions.

Estrada v. Mijares (Summary)

NURSE-PATIENT RELATIONSHIPS

Estrada v. Mijares, No. 08-10-00290-CV (Tex. App. Feb. 20, 2013)

The Court of Appeals of Texas (“appellate court”) affirmed summary judgment in favor of a nurse practitioner being sued by the estate of a patient who died of a heart attack after being discharged from a hospital where he received pulmonary evaluation and treatment.  The estate claimed that the doctors treating the patient – and the nurse practitioner who interacted with one of those doctors – should have recognized that the patient was suffering from heart disease and taken further action to prevent his death.

The nurse practitioner moved for summary judgment on the basis that she had no nurse-patient relationship with the patient.  She provided evidence that her only involvement in his case was to inform the nurse that her collaborating physician was not on call that day and the patient should be assigned to the on-call physician, to telephone the on-call physician as a courtesy to inform him that a pulmonology consult was being requested for the patient, to provide him with certain information from the patient’s chart, and then to transcribe the on-call physician’s verbal order into the chart.

The court held that the actions of the nurse practitioner did not give rise to a nurse-patient relationship with the patient and, therefore, she could not be held liable for medical malpractice in this case.  In reaching this determination, the court rejected the estate’s claim that the nurse practitioner owed some duty to the patient merely by virtue of holding a nurse’s license (noting that such a holding would mean that nurses owed a professional nursing duty to everyone who asked for nursing care).  The court also noted that the remainder of the evidence failed to establish the existence of any relationship between the nurse and the patient. Specifically, the nurse practitioner never examined or evaluated the patient, nor attempted to diagnose or treat him; the treating physician never asked the nurse practitioner to evaluate the patient; and the treating physician countersigned his verbal order.

Eady v. Koon (Summary)

SCOPE OF EMPLOYMENT

Eady v. Koon, C.A. No. 3:12-cv-1671-CMC (D. S.C. Feb. 21, 2013)

In this case involving a counterclaim of defamation brought by several surgeons against the orthopedics department chief at the Veterans Affairs hospital where they provided patient care, the United States District Court for the District of South Carolina granted the United States’ motion to substitute itself as defendant, in the place of the department chief.  In turn, the court dismissed the chief from the lawsuit.

The surgeons claimed that the United States should not be permitted to substitute as defendant because the department chief was acting outside the scope of his employment when he made his defamatory remarks.  In rejecting that argument, the court noted that the department chief’s comments fell into three categories:  (1) a number of letters that he wrote, challenging the investigation of his practice at the VA and the suspension of his clinical privileges, (2) statements to a claims administrator and assistant U.S. Attorney asserting that one of the surgeons was solely responsible for the damages in a malpractice suit that had been filed against the hospital, and (3) communication with an accreditation agency regarding residents’ rotations at the hospital.

The court held that communications in all three of these categories fell within the scope of the department chief’s employment.  With respect to the first category, the court noted that an employee’s defense of his ability to perform all assigned duties is within the scope of employment when the employee remains employed, presents his defense to his superiors, and makes comments that bear some relevance to his suspension.  With respect to the second category, the court noted that as the head of orthopedic services, the physician was responding to inquiries that had been directed to him as head of the department.  Accordingly, his replies would have been within the scope of his employment.  Finally, the court held that the department chief’s statements regarding the residency rotation were within the scope of his employment because, as chief of the department, he had an interest in having residents perform rotations at the hospital.

Finding all of the department chief’s statements to be within the scope of the physician’s employment, the court granted the motion to substitute the U.S. as counterclaim defendant.

Doe v. Montefiore Med. Ctr. (Summary)

NEGLIGENT SUPERVISION/RETENTION

Doe v. Montefiore Med. Ctr., No. 12 Civ. 686 (CM) (S.D. N.Y. Feb. 19, 2013)

The United States District Court for the Southern District of New York granted in part and denied in part a medical center’s motion for summary judgment.  In the case, a patient was allegedly sexually assaulted by a physician employed by the medical center.  At the time of the alleged assault, the physician was in violation of the medical center’s policy that required a chaperone to be present when a male physician conducted an intimate exam on a female patient.

The patient sued the medical center for, among other things, negligent supervision or retention and negligence.  In granting the medical center’s motion for summary judgment on the patient’s negligent supervision claim, the court concluded that internal e-mails that demonstrated that the medical center knew of the physician’s bizarre behavior did not provide evidence from which an inference could be made that the medical center specifically knew or should have known that the physician “had a propensity for violence or sexual abuse.”   However, the court denied the medical center’s motion for summary judgment on the patient’s claim that the medical center negligently failed to apply its chaperone policy.  The court noted that an administrator for the medical center stated that the chaperone policy was implemented to prevent the occurrence of sexual assaults and, thus, the sexual assault was foreseeable.  Accordingly, the court concluded that the negligence claim regarding the chaperone policy must be submitted to a jury.

F.T.C. v. Phoebe Putney Health Sys., Inc. (Summary)

STATE ACTION DOCTRINE/ANTITRUST

F.T.C. v. Phoebe Putney Health Sys., Inc., No. 11-1160 (U.S. Feb. 19, 2013)

The Supreme Court of the United States reversed and remanded a holding from the United States Court of Appeals for the Eleventh Circuit.  In its holding, the Supreme Court concluded that a hospital authority created under the auspices of a Georgia state law was not entitled to state-action immunity from federal antitrust laws because the Georgia law did not clearly articulate a policy allowing the hospital authority to make acquisitions that substantially lessen competition.

Under Georgia’s Hospital Authorities Law, state authorities may create hospital authorities to provide for the operation and maintenance of needed health care facilities in the state.  The case at hand involves one of these hospital authorities.  This hospital authority owns one of two hospitals in its county, and when the hospital authority decided to purchase the second hospital, the Federal Trade Commission and Georgia sought to enjoin the acquisition because of allegations that it violated federal antitrust laws.  The hospital authority argued that it was immune from antitrust liability under the state-action doctrine.

The Supreme Court disagreed, and applied the “clear articulation” test, which states that state-action immunity will attach only to activities that are undertaken pursuant to a “clearly articulated and affirmatively expressed” state policy to displace competition.  Under this test, the Supreme Court concluded that the state-action immunity defense failed because the hospital authority failed to produce evidence that Georgia affirmatively contemplated that hospital authorities would displace competition by consolidating hospital ownership.  The Supreme Court further clarified the requirements of the test, stating that a state policy to displace federal antitrust law is sufficiently expressed when the displacement of competition is the logical or ordinary result of the authority delegated by the state legislature.  In contrast, if a state only grants a general power to act, the entity empowered through this general delegation remains subject to federal antitrust laws.  The Supreme Court concluded that the general delegation of power to the hospital authority resulted in the continued application of the federal antitrust laws to the hospital authority’s conduct.  Accordingly, the Supreme Court reversed and remanded the case for further consideration.

Friedman v. Kan. State Bd. of Healing Arts (Summary)

REVOCATION OF STATE LICENSE

Friedman v. Kan. State Bd. of Healing Arts, No. 102,921 (Kan. Feb. 15, 2013)

The Supreme Court of Kansas affirmed a district court’s decision to uphold a state professional board’s (“board”) revocation of a physician’s license. The physician was licensed in the state for seven years before requesting that his license be designated inactive. After his request, the board brought a disciplinary action against the physician and alleged five counts of misconduct, including falsification of medical records.  Ultimately, the board revoked the physician’s license.  The physician brought an action for judicial review of the order.

The district court affirmed the board’s order.  On appeal, the Supreme Court of Kansas also affirmed, holding that the board had jurisdiction to initiate the disciplinary proceedings and to revoke the physician’s license.   The court stated that the board’s jurisdiction did not depend on the status of the license at the time of the disciplinary action, but rather on the date or dates of the alleged misconduct.  Since the misconduct occurred while the physician was licensed, the board had jurisdiction.  The court also concluded that the board’s Order of revocation was based on material and reliable evidence, including evidence that the physician entered notes into the medical record of a patient indicating that he was present for the delivery of a baby when he was not present.   The court did not consider the physician’s due process argument (that he was not given an opportunity for oral argument to the board’s hearing panel) because it was not supported by factual record or legal authority.

Ball v. Einstein Cmty. Health Assocs., Inc. (Summary)

ADA & ADEA

Ball v. Einstein Cmty. Health Assocs., Inc., No. 12-1729 (3d Cir. Feb. 14, 2013)

The United States Court of Appeals for the Third Circuit affirmed a trial court’s grant of summary judgment to a medical practice corporation (“employer”) and others that were sued by an employed primary care physician for age and disability discrimination.  The physician was diagnosed with a disabling nervous system condition that significantly limited his physical mobility.  Despite this, he was able to perform the essential functions of his position.  At age 73, the physician’s contract with the employer was not renewed.  The physician sued, claiming that his contract was not renewed in violation of the Americans with Disabilities Act and the Age Discrimination in Employment Act.  The employer disagreed, arguing that the reasons his contract was not renewed were that he failed to pass billing and coding audits, inappropriately prescribed narcotics and at a high rate, and failed to follow the employer’s pain management policy.  The court concluded that the physician could not demonstrate that the employer’s proffered reasons for not renewing his contract were a pretext for discrimination.  Accordingly, the court granted summary judgment to the employer.