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.

Long v. Parry (Summary)

LITIGATION – CHANGE OF VENUE

Long v. Parry, No. 2:12-cv-81 (D. Vt. Feb. 1, 2013)

The United States District Court for Vermont denied an attorney’s motion to dismiss a physician’s claim against him after the attorney obtained a multi-million dollar settlement on the physician’s behalf after the physician’s employment at a hospital was terminated.  Upon obtaining the settlement, the attorney and physician had a disagreement over how the funds should be allocated and disbursed.  The present litigation ensued.  At this stage of the litigation, the parties are seeking to determine which state’s laws apply to the litigation, and the court is seeking to change venue from Vermont to the Eastern District of Pennsylvania.

Forsythe v. Advocate Health & Hosps. Corp. (Summary)

MEDICAL MALPRACTICE

Forsythe v. Advocate Health & Hosps. Corp., No. 11 C 7676 (N.D. Ill. Feb. 1, 2013)

The United States District Court for the Northern District of Illinois denied a hospital’s motion to dismiss allegations in a patient’s amended complaint alleging malpractice and loss of consortium.  Although the hospital argued that the amended complaint included allegations that had not appeared in prior complaints and were now alleged after the statute of limitations period had run, the court disagreed and concluded that the patient’s amended allegations were sufficiently pled to have arisen out of the same transaction or occurrence and therefore related back to the original complaint that was filed within the statute of limitations period.  Accordingly, the court denied the hospital’s motion to dismiss the allegations in the patient’s amended complaint.

In the case, a patient alleged that she had suffered injuries as the result of negligent treatment by physicians and nurses at a hospital, and her husband alleged that as a result of those injuries he had been deprived of a portion of the patient’s love, companionship, and consortium.  Two different physicians reviewed the patient’s medical records and concluded that the patient had a reasonable and meritorious cause for filing a lawsuit against the hospital and the patient’s physicians.

The patient filed a series of complaints against the hospital.  In the patient’s second amended complaint, the patient added new physicians and claims to her complaint.  The hospital sought to dismiss these complaints because they were filed after the statute of limitations had run.  However, the court denied this motion to dismiss because it concluded that the complaint had sufficiently alleged new facts that may have been part of the same transaction and occurrence described in the patient’s prior complaints.  For this reason, the court concluded that the new facts and allegations related back to the original complaint, which was filed within the statute of limitations period.

Rhodes v. Sutter Health (Summary)

CORPORATE PRACTICE OF MEDICINE

Rhodes v. Sutter Health, No. CIV 2:12-0013 WBS DAD (E.D. Cal. Feb. 1, 2013)

The United States District Court for the Eastern District of California granted in part and denied in part a non-profit clinic’s motion for summary judgment.  A physician brought suit against the clinic and a medical group practice for a number of claims after her termination.  She argued that the medical group and the clinic should be treated as either joint employers or as one singular, integrated employer.

The district court held that the clinic should not be considered liable as a joint employer.  The clinic had little control over the day-to-day activities of the physician.  She was operating under her own license and did not have a supervisor.  The staff members of the clinic provided evaluations but only at the request of the medical group.  The court stated that assistance and support of an employer is not sufficient to demonstrate the control necessary of a joint employer.

The district court also held that the clinic and the medical group should not be treated as an “integrated enterprise.”  The court stated that it would be a mistake for a corporate entity to face liability for another entity’s acts simply because the two have a contract to provide services.  The relationship between the medical group and the clinic was meant to satisfy a state law prohibiting corporations from practicing medicine.

Ne. Med. Servs., Inc. v. Cal. Dep’t of Healthcare Servs. (Summary)

MEDICAID ACT

Ne. Med. Servs., Inc. v. Cal. Dep’t of Healthcare Servs., No. C 12-2895 CW (N.D. Cal. Feb. 1, 2013)

The United States District Court for the Northern District of California granted one motion to dismiss and granted in part and denied in part a separate motion to dismiss.  A non-profit health center brought suit against the government and the state department of healthcare for violations of the Medicaid Act.  The non-profit claimed that the federal government mischaracterized its financial reporting requirement and that the state department of healthcare violated the Medicaid Act by not providing on-time reimbursements to the non-profit.

The district court dismissed the claims against the federal government for lack of jurisdiction.  The court stated the letter sent by the government was not an agency action that could be reviewed by the court.  The letter was a summary of the U.S. attorney’s investigative findings and clearly indicated that it was for the sole purpose of negotiating a settlement.  The court did not believe that the letter had any impact on the non-profit’s legal obligations.

The district court dismissed one of the non-profit’s claims against the department of healthcare because it did not allege a concrete injury.  The court held that claiming a compliance dilemma existed between the government’s letter and state law was too broad.  The state healthcare department did not play a role in the drafting of the letter.

The district court allowed the non-profit’s claim of timely payments to survive the motion to dismiss.  The court held that the non-profit was entitled to full compensatory payments every four months, as indicated by the Medicaid Act.  The department’s policy of providing interim prospective payments was not a satisfactory method of payment.

Johnson v. SSM Healthcare Sys. (Summary) UPDATED

HCQIA – IMMUNITY GRANTED

Johnson v. SSM Healthcare Sys., No. 4:11CV1235 HEA (E.D. Mo. Jan. 30, 2013) (see Update Below)

The United States District Court for the Eastern District of Missouri granted a hospital’s motion for summary judgment based on HCQIA immunity.  A physician brought suit against the hospital after an altercation with a patient’s mother led to the suspension and eventual revocation of his clinical privileges.  The hospital granted the physician all of the necessary hearings as required by the hospital bylaws before making the decision to revoke his privileges.

The district court held that the hospital was entitled to summary judgment because it acted within the scope of the HCQIA immunity provision.  The court stated that the precautionary suspension of the physician immediately following the confrontation with the mother constituted a professional review action.  The court stated the record was clear that the quality of health care was at the forefront throughout the peer review process.  The district court also believed that the hospital made an effort to obtain the relevant facts and that the physician received adequate hearing and notice procedures.  The hospital took statements from the physician, nurses and the patient’s mother before making any determination at the hearing.  The hospital also gave copies of the hearing transcript to the physician, and allowed him to cross-examine witnesses, use exhibits and make opening and closing statements.

**UPDATE**

Johnson v. SSM Healthcare Sys., No. 14-1397 (8^th Cir. Nov. 14, 2014)

The U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s determination that the hospital was entitled to immunity under the Health Care Quality Improvement Act. According to the court, the physician did not produce sufficient evidence to suggest that a reasonable jury would find the hospital’s peer review process fell below legal standards.

U.S. ex rel. Armfield v. Gills (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Armfield v. Gills, No. 8:07-CV-2374-T-27TBM (M.D. Fla. Jan. 30, 2013)

In this FCA case, the United States District Court for the Middle District of Florida denied a physician’s motion for summary judgment.  The government brought suit against the physician for claims fraudulently billed to Medicare.  The government alleged, over the course of a patient’s cataract surgery, the physician upcoded procedures and examinations so that Medicare would pay for them.

The district court denied summary judgment on claims that false codes and medically unnecessary procedures were used to defraud the government.  The court stated that the correctional procedure performed after the first cataract surgery was coded properly, but a dispute existed over whether the procedure was medically necessary.  The correctional procedure met the regulatory requirements of a minor surgery: it was performed in a “minor procedural room” and required topical anesthesia.  There was, however, an issue of fact over whether the procedure was to be considered a correction or was meant to be an alternative to corrective lenses.  Due to this issue of material fact, the district court denied summary judgment.

The district court also denied summary judgment of the claim that the decision to perform the second cataract surgery was falsely billed to Medicare.  The court stated that the differing opinions of the experts needed to be heard by a reasonable jury.  The physician’s expert argued that the final decision on the second surgery was a regulatory requirement.  The government’s expert argued that the second pre-surgery examination (which occurred prior to the surgery on the patient’s second eye) was unnecessary and that the examination performed before the first cataract surgery would have been sufficient.

The court stated that the fact that the physician submitted the claims based on the advice of a consultant was not controlling.  The district court believed that a reasonable jury could determine that the physician acted with disregard when submitting his Medicare claims.

Gonsalves v. Sharp Healthcare (Summary)

NEGLIGENCE:  INFORMED CONSENT

Gonsalves v. Sharp Healthcare, No. D060514 (Cal. Ct. App. Jan. 30, 2013)

In this medical malpractice case, the California Court of Appeal reversed a trial court’s grant of summary judgment to a hospital.  A patient underwent open heart surgery at the hospital.  Days later, she developed fluid around her lungs.  Her pulmonologist ordered insertion of a tube to drain the fluid, but expected the practitioner who performed the procedure to discuss it with the patient.  Nurses from the hospital called the patient to obtain her consent to the procedure.  Since the patient had dementia, her daughter consented to the procedure for her, allegedly without being informed of the risks or benefits associated with it.  The physician who inserted the tube also did not discuss it with the patient before beginning.  During surgery, he punctured her aorta.  The patient died two years later, allegedly due in part to the physiological stress caused by the puncture and related injuries.  The family of the deceased patient then sued the hospital and doctors for malpractice, wrongful death, and battery.

As to the medical malpractice and wrongful death claims, the hospital challenged the causal connection between the puncture and the patient’s death two years later.  As to the battery claim, it argued that there was no evidence that anyone but the doctor who performed the procedure had touched the patient.  Finally, the hospital also argued that it was the doctor, not the nurses, who should have provided informed consent.  Therefore, it reasoned that it could not be liable, since it could only be liable for the acts of the nurses, as employees, not the acts of the doctor, an independent contractor.  The trial court accepted these arguments and granted summary judgment in favor of the hospital.

The appellate court reversed, finding that it was possible that the puncture and related injuries caused the patient’s death. Because touching a patient without informed consent constitutes medical negligence in California, rather than battery, and because wrongful death claims are essentially medical malpractice claims, where the alleged negligence results in the death of the patient, the appellate court analyzed all of the claims under the umbrella of medical malpractice. First, it reviewed the trial court’s decision to see if there was evidence of a causal connection between the puncture and the patient’s death. To show a causal connection, the patient’s family needed to provide evidence that a reasonable person would not have undergone the procedure, if aware of the risk of the puncture. Thereafter, the hospital had the chance to show that the particular patient still would have gone ahead with the procedure, even if informed of the risks. The patient’s family and the hospital presented conflicting evidence as to whether a reasonable person would have gone through with the procedure after being informed of the risk of puncture. Since an issue of fact remained with respect to causation, the appellate court reversed the grant of summary judgment in favor of the hospital and remanded the case for further proceedings.