Hill v. St. James Hosp. & Health Ctrs. (Summary)

TITLE VII – RACE DISCRIMINATION

Hill v. St. James Hosp. & Health Ctrs., No. 10 C 5780 (N.D. Ill. Feb. 15, 2013)

The United States District Court for the Northern District of Illinois granted a hospital’s motion for summary judgment on a Title VII discrimination claim and state law retaliation claim brought by a female, African-American nurse.   The nurse’s position in the hospital’s cath lab was eliminated because of an increase in the cost of performing procedures in the lab.  Another contributing factor to the elimination of the nurse’s position was a significant decline in the number of cases conducted after a group of doctors that performed all of the procedures in the lab did not renew its contract with the hospital.  The nurse was informed of other openings at the hospital, but the nurse was not interested.  She was then offered a severance package.  However, the nurse declined the severance package because she wanted to collect unemployment benefits.

The nurse sued the hospital and claimed that the elimination of her position constituted race discrimination in violation of Title VII.  The court rejected the nurse’s claims, finding that she failed to establish that her responsibilities were taken on by other individuals in the workforce of a different race or that other individuals of a different race were treated better.  Even if the nurse had shown that a Caucasian nurse was similarly situated to her or that she had taken on the nurse’s responsibilities, the hospital’s cath lab was under financial pressure due to increased costs and decreased procedures. Therefore, the hospital had a legitimate reason to eliminate the nurse’s position.  The court also rejected the nurse’s retaliatory discharge claim under state law, concluding that such a claim was not cognizable because a remedy was available under the Illinois Human Rights Act.

Chaney v. Providence Health Care (Summary)

FMLA

Chaney v. Providence Health Care, No. 87056-0 (Wash. Feb. 21, 2013)

The Supreme Court of Washington granted a motion for directed verdict by a radiologic technician and concluded that a hospital violated the Family and Medical Leave Act of 1993 (“FMLA”) by failing to return the technician to work after receiving a statement from his treating physician that the technician was “ok to work as soon as Employer allows.”  The hospital fired the technician after he took FMLA leave due to his wife’s illness and his own back injury.  The technician argued that the hospital fired him in violation of the FMLA and that the fitness to return to work certification that his physician provided the hospital was sufficient.  The court agreed, concluding that the certification, as required by the FMLA, was made contemporaneously with the technician’s ability to return to work.  The court also dismissed the hospital’s arguments that the physician’s statement of fitness was ambiguous, instructing “[i]f the hospital found the statement of fitness ambiguous, its option was not to terminate [the technician], but rather to seek clarification from [the physician].”

United States v. APS Healthcare, Inc. (Summary)

FALSE CLAIMS ACT

United States v. APS Healthcare, Inc., No. 2:11-cv-01454-MMD-GWF (D. Nev. Jan. 30, 2013)

In a False Claims Act (“FCA”) case, the United States District Court for the District of Nevada granted in part, and denied in part, a motion to dismiss filed by a company providing care management and care coordination services to Medicaid beneficiaries.  The Relator, a former employee of the company, brought the FCA suit claiming that the company had enrolled patients in the program without their consent and had enrolled “ghost patients,” then billed Medicaid.

The district court held that some of the allegations made by the Relator did not involve the company submitting false billing statements to Medicaid which is an essential element under the FCA.  Thus, allegations that the company was understaffed as required by its contract with Medicaid, or that patient assessments were inadequate, or that patients received out-of-date telephone referrals, might constitute a breach of contract claim but were not actionable under the FCA or its state equivalent.   The court dismissed these claims.

However, the court found that some of the Relator’s allegations were sufficient to demonstrate that the company submitted false claims to Medicaid.  Specifically, the Relator alleged that the company billed Medicaid for cases that had been inactive as if services were provided and had a policy of billing Medicaid for “ghost patients.”

The Relator alleged that while she was an employee, she investigated what she believed to false claims or could lead to an FCA action. The Relator spoke to her then supervisor about her concerns. Thereafter, the Relator experienced workplace taunting and was assigned retaliatory tasks.  According to the court, the company’s behavior “is reasonably likely to deter employees from raising concerns about a potential FCA violation.”   Thus, the court refused to dismiss the Relator’s retaliation claim.

Mays v. Bracey (Summary)

EMTALA

Mays v. Bracey, Nos. 11-2158, 12-0085 (W.D. La. Feb. 5, 2013)

The United States District Court for the Western District of Louisiana granted a hospital’s motion for summary judgment with respect to a malpractice claim and a claim brought under the Emergency Medical Treatment and Active Labor Act (“EMTALA”).  Underlying the patient’s claims was her treatment at the hospital’s emergency department.  According to the patient, she had been brought to the emergency department with headaches, slurred speech, and weakness on her left side. She was screened and then discharged from the hospital.  Her symptoms persisted the next morning, and the patient was taken to another hospital where she was treated.  The patient filed suit against the first hospital.

The district court dismissed the patient’s medical malpractice claim against the hospital because it was brought before the case had been submitted to a medical review panel as required by law. The court stated that the malpractice claim could be filed after the medical review process was complete.

The district court also granted the hospital’s motion for summary judgment with respect to the EMTALA claim.  According to the court, EMTALA was not meant to be a federal malpractice statute.  An appropriate screening examination under EMTALA, “is not judged by its proficiency in accurately diagnosing the patient’s illness, but rather by whether it was performed equitably in comparison to other patients with similar symptoms.”  The hospital provided evidence that the ED physician and nurse did not believe the patient had an emergency medical condition when they discharged her from the hospital.  In granting the hospital’s motion for summary judgment, the court concluded that the patient had not provided sufficient evidence to demonstrate that she had been treated differently based on her lack of insurance.

Nacogdoches Heart Clinic, P.A. v. Pokala (Summary)

NON-COMPETE PROVISION

Nacogdoches Heart Clinic, P.A. v. Pokala, No. 12-11-00133-CV (Tex. App. Feb. 6, 2013)

The Texas Court of Appeals affirmed a trial court’s decision that a non-compete agreement in a cardiologist’s employment contract was unenforceable.  The cardiologist had joined a founding cardiologist’s practice at a heart clinic. The two later opened an outpatient cardiovascular lab.  Both cardiologists had an ownership interest in the practice and were employees of the heart clinic.

The employment agreement contained a non-compete clause, which prohibited each cardiologist from practicing or holding any ownership interest in a medical practice within ten miles of city limits for one year after the termination of employment.  After more than 15 years of practicing together, the two cardiologists had a dispute over a patient matter.  This prompted the founding cardiologist to fire the other cardiologist.  Immediately thereafter, the cardiologist, whose employment had been terminated, opened his own practice.

The founding cardiologist and the heart clinic sued the cardiologist for breach of the non-compete provision of the employment agreement. The cardiologist counterclaimed for breach of a buy-sell agreement and his employment contract.

The trial court found that the non-compete clause would adversely affect the interests of the public and therefore was unreasonable and unenforceable.  The court found that there was a need for cardiologists in the small town in which they lived and that “for one doctor to be taken out of the equation hurts the medical care of the people.”

The appellate court affirmed this decision.  Both courts were persuaded by the fact that the employment agreement prohibited the cardiologist from practicing medicine of any sort. Therefore, the agreement was broader than it needed to be to protect the interests of the heart clinic.

Of greater significance to the courts was a concern that enforcement of the non-compete clause would harm the public by inadequate health care and continuity to care and would deprive the public of access to the physician of its choice.  In finding that the non-compete clause was unreasonable and unenforceable, the appellate court concluded that the trial court appropriately considered evidence from the local hospital administrator and an attorney who represented the local hospital district about the injurious effects on the public from a shortage of cardiovascular services.

The appellate court also found that the provision in the buy-sell agreement that required the cardiologist to resign privileges at all hospitals where he practiced, was, in effect, a covenant not to compete, was inconsistent with public policy concerns, and would not be enforced.  Therefore, under the buy-sell agreement, the cardiologist was entitled to the full value of his shares even though he did not resign his privileges to practice at the hospital.

Baker v. Texas Med. Bd. (Summary)

LICENSING ACTION

Baker v. Texas Med. Bd., No. 03-12-00313-CV (Tex. App. Feb. 6, 2013)

An appellate court affirmed the decision of a state medical board to revoke the license of an orthopedic surgeon. The physician had a history of violating the standard of care with respect to surgical and non-surgical patients and deviating from the standard of care in post-operative patients.  As a result of these complaints, the physician and the Board had entered into an Agreed Order with conditions, including that the physician “shall not perform or be present at any spinal surgery.”  Four days after the Agreed Order went into effect, the physician performed kyphoplasty.

The Board ordered the temporary suspension of the physician’s license. Initially, after a settlement conference, the disciplinary panel offered the physician a new agreement, which he signed.  However, the Board rejected this agreement and filed a complaint against the Physician.  At the administrative hearing, the administrative law judge proposed the revocation of the physician’s license, and the Board adopted this recommendation.

The physician then sought judicial review. The trial court affirmed the Board’s decision. On appeal, the physician argued that there was no substantial evidence that kyphoplasty was a spinal surgery. The appellate court disagreed, finding that kyphoplasty constituted spinal surgery, because it involved drilling into the pedicle, inserting a “K-wire,” and injecting bone cement into the space between the vertebrae.  In addition, expert testimony supported that this procedure constituted spinal surgery.  The appellate court upheld the decision to revoke the Physician’s license.

McKee v. Laurion — Jan. 2013 (Summary)

DEFAMATION

McKee v. Laurion, No. A11-1154 (Minn. Jan. 30, 2013)

The Supreme Court of Minnesota reversed the decision of a lower court and granted summary judgment to the son of a patient in a defamation lawsuit brought by a treating physician.  The physician sued his patient’s son after the son posted various statements on “rate-your-doctor” websites and in letters to various medical institutions.  The posts and letters included what the son believed were inappropriate statements made by the physician during his examination of the father.

The physician argued the statements were defamatory and interfered with his business.  The trial court dismissed the physician’s lawsuit.  This decision was overturned on appeal.   The supreme court reversed, once again dismissing the lawsuit.

With respect to three of the six statements at issue (“I had to spend time finding out if you transferred or died”; “44 percent of hemorrhagic strokes die within 30 days, I guess this is the better option”; and “[it] doesn’t matter [whether your gown is tied]”), the supreme court found that there was no issue that the statements were substantially true.   According to the court, minor discrepancies of detail are irrelevant.  Since the physician admitted that the statements were made to the patient and his family (even though he argued that certain details were incorrect), the statements could not be used in a defamation claim.  As the court noted: “Truth is a complete defense to a defamation action and ‘true statements, however disparaging, are not actionable.’”

With respect to the remaining three statements, the physician claimed that they were damaging to his reputation.  These statements included:  “Therapists? You don’t need therapy”; “Five minutes later, [the Physician] strode out of the room. He did not talk to my mother or myself”; and “When I mentioned [the Physician’s] name to a friend, who is a nurse, she said, ‘[the Physician] is a ‘real tool.’”  In dismissing the lawsuit, the supreme court held that these three statements were not actionable because they were incapable of conveying a defamatory meaning.

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

LITIGATION – PUNITIVE DAMAGES

Chudacoff v. Univ. Med. Ctr., No. 2:08-cv-00863-RCJ (D. Nev. Feb. 1, 2013)

A doctor sued a university medical center and a variety of other individuals for suspending his medical staff privileges, which allegedly also resulted in the termination of his professorship.  This decision involved a variety of discovery disputes.  Essentially, the doctor served interrogatories and requests for production on several defendant doctors, seeking information of each person’s net worth in calculating punitive damages.  The individuals objected to the interrogatories and requests as being irrelevant and invasive of their personal privacy.  Nevertheless, they ultimately presented some of the requested documents.  But the doctor still moved to compel the production of other documents.

In this decision, the court clarified what exactly the individuals had to produce in response to the doctor’s discovery requests.  In Nevada, personal wealth is considered relevant to the issue of punitive damages.  Although the relevance is limited to an individual’s current financial condition, some discovery is allowed with respect to the individual’s prior financial condition.  However, other states have limited such discovery to two years from the time that the lawsuit was filed, because only the person’s present financial condition is relevant to punitive damages.  This court similarly limited the relevant time period.  Therefore, it only required the individuals to produce their 2010, 2011, and 2012 federal income tax returns and only required the individuals to respond to the interrogatories with information from January 1, 2011 to the present.  It thus granted in part the doctor’s motion to compel discovery.

In addition, the doctor and the individuals sought discovery sanctions from each other for other discovery violations.  Since both parties had behaved badly in those instances, the court decided to offset their fees and expenses.  However, it denied the motion for sanctions with respect to the individuals’ refusal to provide the requested financial information.

Chi v. Loyola Univ. Med. Ctr. (Summary)

RELEASE FORM – ABSOLUTE IMMUNITY

Chi v. Loyola Univ. Med. Ctr., No. 10 C 6292 (N.D. Ill. Feb. 1, 2013)

The United States District Court for the Northern District of Illinois granted summary judgment to a residency director and a medical center on a former resident’s defamation claim based on a reference that the director provided to a requesting medical center, finding that a release form, signed by the former resident, granted the director and medical center absolute immunity from the claim.  The former resident claimed that the director and other staff members made false and critical statements about him throughout his residency.  The medical center and the director contended that any issues discussed in the reports were prompted by the former resident’s poor interpersonal communication skills.

Upon completion of his residency, the former resident applied for a position at another medical center.  His application included a release form, which authorized third parties to release information to the medical center upon request, so long as the information pertained to his qualifications as a physician.

In responding to a request for information, the residency director checked a box which indicated that he could not recommend the former resident.  The director returned the forms to the new medical center.  The former resident alleged that the credentialing committee at that medical center did not feel comfortable granting him temporary privileges after receiving this reference.

The former resident then sued the director of his residency program and the medical center for a host of state law claims.  However, at the time of this decision, the only claim left was his defamation claim, because all of the other claims had been dismissed.

The court looked to whether the release form provided the director and medical center with immunity from liability for providing information to the requesting medical center.  The Arizona Supreme Court has not addressed this issue.  Relying on case law from other states, however, the court found that the release would provide absolute immunity to the doctor and medical center for providing the information, if the statements made fell within the scope of the statements covered by the release, i.e., statements regarding the former resident’s qualifications for the new position.  The court then went on to find that the director’s indication that he could not recommend the applicant fell within the scope of the release form, because it either expressed an assessment of the former resident’s skills or implied that the former resident did not possess the qualifications necessary for the job.

However, the court found that immunity could only extend to defamatory statements to the extent that the former resident knew when he signed the release that the statements elicited might be negative.  Since the doctor alleged a history of the director and the medical center making false and critical statements regarding his performance and behavior throughout his residency, the court found that any jury would find that the former resident had reason to know that negative statements may be made against him in response to reference requests.  Therefore, the court granted summary judgment in favor of the medical center and residency director.

The court also awarded the former resident attorney’s fees and expenses incurred due to the medical center’s failure to preserve certain backup tapes during discovery.  However, the only fees recoverable were those directly related to the follow-up discovery that was reasonably necessitated because of the failure to preserve the backup tapes, which the court stated should only be a modest subset of all the discovery costs that the former resident incurred.

Ellis v. Allegheny Specialty Practice Network (Summary)

EMPLOYMENT LAW – WHISTLEBLOWER

Ellis v. Allegheny Specialty Practice Network, No. 2:12cv404 (W.D. Pa. Feb. 1, 2013)

A Pennsylvania trial court dismissed a doctor’s wrongful discharge claim against his former practice, but allowed his statutory retaliation claims to go forward.  The doctor had entered into a three-year employment contract with the group practice.  He alleged that, during that time, he was asked to engage in certain treatment methods which he believed were unethical, non-consensual, and below the standard of care.  He declined to use such treatment methods and reported the issues to his supervisor and the company’s internal compliance officer, stating that he intended to report the problems to the proper authorities, if they failed to take action to resolve the issues.  Thereafter, his employment was terminated and he sued the group practice for breach of contract, violation of the Pennsylvania Whistleblower Statute, violation of the Medical Care Availability and Reduction of Error Fund (“MCARE”), and wrongful discharge.

The group practice moved to dismiss the whistleblower, MCARE, and wrongful discharge claims.  First, the group practice argued that the Whistleblower Statute was inapplicable, because the statute only applies to “employers,” which includes “public bod[ies],” and it did not constitute a “public body” under the statute.  The court rejected this argument.  The statute defined “public body,” in part, as any body funded, in any amount, “by or through” the state.  The court found that the practice satisfied the funding requirement by receiving Medicaid reimbursements and, therefore, constituted a “public body.”

Second, the group practice argued that the MCARE statute was not triggered, because the doctor was not reporting an “incident” or “serious event” within the meaning of the statute.  The court also rejected this argument.  The MCARE statute protects health professionals from retaliation for reporting “incidents” or “serious events” to the appropriate safety officer.  Under the statute, a “serious event” is “[a]n event, occurrence or situation involving the clinical care of a patient in a medical facility that results in death or compromises patient safety and results in an unanticipated injury requiring the delivery of additional health care services to the patient.”  The court found that treatment that was unethical, non-consensual, and below the standard of care, as the doctor alleged, would compromise patient safety and could result in unanticipated injury and, thus, met the definition of a “serious event.”  Since the conduct could meet that definition, there was a possibility that the doctor may have suffered retaliation for reporting conduct covered under the statute.

Third, the group practice argued that the doctor could not maintain a wrongful discharge claim, because he was not an at-will employee.  Under Pennsylvania law, wrongful discharge claims are not available when an employment contract protects the employee from termination without cause.  Because the doctor alleged that he had an employment contract for a definite term, he was not an at-will employee under Pennsylvania law and could not maintain a wrongful discharge claim.  Therefore, the court dismissed the wrongful discharge claim, but denied the motion to dismiss on the doctor’s whistleblower and MCARE claims.