Gentilello v. Dallas Cnty. Hosp. Dist. (Summary)

SOVEREIGN IMMUNITY

Gentilello v. Dallas Cnty. Hosp. Dist., No. 05-13-00150-CV (Tex. App. Mar. 24, 2014)

The Court of Appeals of Texas affirmed a trial court’s ruling that a hospital had sovereign immunity in a physician’s claim alleging that he was removed from the call schedule and retaliated against for reporting practices that violated Medicaid rules and regulations.

The physician was employed by a medical center and also provided services at the hospital.  In accordance with an agreement between the medical center and the hospital, physicians employed by the medical center who provided services at the hospital were required to follow the policies and procedures of the hospital, including its corporate compliance policy and procedures.  One such procedure required that employees, contractors, and agents were to report potential or suspected incidents of fraud and violations of law to the hospital.  The physician filed a lawsuit which alleged that after he reported the practices that violated Medicaid rules and regulations, the hospital removed him from its call schedule and conspired with the medical center to retaliate against him for reporting the violations.  The hospital then entered into a settlement agreement with the physician and, under the terms of the agreement, the physician was allowed to reserve his right to maintain his retaliation claim under state law.

After the settlement, the hospital asserted that since it is a state entity, the physician’s retaliation claim is barred by sovereign immunity, and the trial court agreed.  On appeal, the physician’s contention was that the language of the settlement agreement indicated that the hospital waived its sovereign immunity; however, the appeals court found that the agreement did “not contain clear and unambiguous language waiving sovereign immunity.”  The physician also argued that the hospital waived sovereign immunity by its “extraordinary, egregious, and inequitable” conduct; however, the appeals court also declined to conclude that a state entity, such as the hospital, could waive sovereign immunity by its conduct.  Finally, the court found that whether the hospital is liable under the terms of the state’s Medicaid fraud prevention laws is irrelevant absent a waiver of sovereign immunity.