Elkharwily v. Franciscan Health Sys. — Dec. 2015 (Summary)

HCQIA IMMUNITY

Elkharwily v. Franciscan Health Sys.
Case No. 3:15-cv-05579-RJB (W.D. Wash. Dec. 1, 2015)

The United States District Court for the Western District of Washington denied a health system’s motion to dismiss a lawsuit brought by a physician who alleged he experienced loss of income and employment benefits after the health system denied his application for privileges and revoked his temporary privileges, as a result of it discovering his bipolar disorder and the fact that he had commenced a wrongful termination action against his former employer.

The physician alleged that an employee from the health system told him his mental illness was a “red flag” and the appellate review board “denied and resisted” giving the physician a chance to complete a proctorship to alleviate the health system’s concerns. Further, an employee from the health system allegedly informed the physician’s prospective employer that they “should watch what type of people” they bring to work at the hospital. Finally, the physician alleged the health system made a false report to the National Practitioner Data Bank (“NPDB”) indicating the physician “fail[e]d to demonstrate the scope and adequacy of his experience or his current clinical skill and competence.” The physician filed suit, claiming defamation and violation of the Washington Law Against Discrimination (“WLAD”), Rehabilitation Act, Title VI, and Section 1981.

With regard to the physician’s defamation claim, the district court rejected the health system’s argument of immunity under the Health Care Quality Improvement Act, noting that if the health system only had reports from coworkers indicating the physician was competent (as the physician alleged), a reasonable inference could be made that the health system knew its NPDB report was “false” because it did not substantiate any of the information the health system had in its possession.

With regard to the WLAD and Rehabilitation Act claims, the district court found the physician alleged sufficient facts to state a claim against the health system for disability discrimination, holding that bipolar disorder is considered a disability under both statutes, and the comments made by employees of the health system supported the argument that the physician was denied privileges because of his disability. The district court also upheld the physician’s Title VI claim, holding that the health system’s receipt of Medicare and Medicaid funds to employ physicians established that the health system was a recipient of federal funds and, therefore, subject to Title VI.

The district court did grant the health system’s motion to dismiss the physician’s anti-retaliation claim under the False Claims Act (“FCA”), holding that the court had no knowledge of any authority expanding FCA liability to a third party who was not involved with the whistleblowing activity. Additionally, the district court held the physician did not describe how the rejection of privileges was related to his whistleblowing activity against a former employer, and did not follow the unique procedure for FCA claims.