U.S. ex rel. Rembert v. Bozeman Health Deaconess Hosp. — Feb. 2017 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Rembert v. Bozeman Health Deaconess Hosp.
No. CV 15-80-BU-SHE (D. Mont. Feb. 7, 2017)

The United States District Court for the District of Montana denied, among other motions, a hospital’s motion to dismiss for lack of subject matter jurisdiction, reasoning that a public disclosure bar was inapplicable to the case at hand. The hospital filed the motion in response to a qui tam action, which alleged that the hospital had violated the False Claims Act (“FCA”) by unlawfully trading patient referrals for remuneration through the formation and operation of an outpatient medical imaging joint venture.

Noting that the public disclosure bar deprives a district court of jurisdiction over any qui tam action that is based upon allegations or transactions already disclosed in certain public forums (unless the qui tam relator was the original source of the information underlying the action), the court reasoned that the public disclosure bar was inapplicable because no prior disclosure within the parameters of the FCA was shown to have been made.

Part of the dispute over the public disclosure bar centered on an earlier complaint filed in state court.  That complaint had asserted claims for intentional interference with contractual relations, breach of contract, breach of an implied covenant of good faith and fair dealing, unfair trade practices, and punitive damages.  The court explained that this state court action was not similar enough to the current FCA case to qualify as a “public disclosure.”  The court determined that the facts underlying the former state court complaint were not substantially similar to the unlawful kickback scheme that was currently being alleged.  Therefore, the public disclosure bar did not preclude the district court’s jurisdiction, and the court saw fit to deny the hospital’s motion to dismiss.

Walker v. Memorial Health Sys. of E. Tex. — Feb. 2017 (Summary)

NATIONAL PRACTITIONER DATA BANK

Walker v. Mem’l Health Sys. of E. Tex.
Civil Action No. 2:17-CV-00066-JRG (E.D. Tex. Feb. 8, 2017)

The United States District Court for the Eastern District of Texas granted a surgeon’s motion for a preliminary injunction against his hospital employer. After issues arose in conjunction with the surgeon’s treatment of two patients at the hospital, the hospital’s Medical Executive Committee (“MEC”) had recommended that the surgeon have a mandatory concurring proctoring requirement for five bowel surgery cases.

The Board ultimately adopted the MEC’s recommendation (that the surgeon be required to have five bowl surgery cases proctored at his expense), but failed to specify a timetable for the completion of the proctored cases.  Thirty days elapsed without the surgeon completing the five cases, so the hospital filed an adverse report to the National Practioner Data Bank (“NPDB”).  The report noted the proctoring requirement and stated that the basis for the action was “substandard or inadequate skill level.”  (The court noted in a footnote that a hearing committee composed of five physicians had recommended rejecting any adverse action.)

The surgeon filed an administrative dispute of the report and filed this action seeking immediate injunctive relief.  The court found that the surgeon established all of the necessary elements to entitle him to a preliminary injunction: a substantial likelihood of success on the merits of the claim; a substantial threat of irreparable injury or harm for which there is no adequate remedy at law; a threatened injury to the applicant outweighing any harm that the injunction might cause to the defendant; and that the injunction would not disserve the public interest.

The court declined to interpret NPDB reporting requirements in a way that would “discriminate against practitioners in rural communities.”  The court reasoned that it would be easier for a surgeon in a busy Dallas hospital to find a proctor and complete the set number of cases within 30 days, compared to a surgeon practicing in a rural area with fewer potential proctors.  The court also directed criticism at the hospital’s decision-making process, noting that it had access to competent legal counsel yet decided to adopt a proctoring requirement that was silent as to duration, without any explanation.

With respect to irreparable harm, the court noted that an adverse report on the NPDB that deems a surgeon to have “substandard or inadequate skill” is an “indelible stigma” and would be intrinsically harmful to the surgeon’s practice, professional reputation, and livelihood.  In addressing the balance of harm element, the court rejected the hospital’s claim that the injunction would force the hospital to violate federal law by not making the report, stating that any injunctive relief ordered by the court would compel the hospital to comply with federal law, not violate it.

Lastly, the court concluded that the preliminary injunction would not disserve the public’s interest, because Congress had already considered the competing interests of the public and medical practitioners when it drew the 30-day bright-line temporal standard.  The court found that proctoring sanctions against the surgeon were not reportable, and to hold otherwise would read the 30-day requirement out of the statute and applicable NPDB guidelines. Thus, the court granted the surgeon’s motion for preliminary injunctive relief.

U.S. ex rel. Conroy v. Select Med. Corp. — Feb. 2017 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Conroy v. Select Med. Corp.
No. 3:12-cv-00051-RLY-DML (S.D. Ind. Feb. 3, 2017)

The United States District Court for the Southern District of Indiana denied a defendant hospital’s motion for interlocutory appeal in a False Claims Act (“FCA”) action.  Former employees alleged that the defendant-hospital had perpetrated a scheme to defraud Medicare, in violation of the FCA.

The FCA, a fraud enforcement statute for entities participating in federal programs, allows the Executive Branch to oppose the dismissal of a claim if the allegations were previously publicly disclosed.  This is part of the “public disclosure bar” doctrine.  On appeal, the hospital argued that if the allegations had indeed been publicly disclosed, the public disclosure bar would prohibit a federal court from hearing the case.  Looking to the language of the statute, the court found that Congress had clearly not intended for public disclosure to serve as a reason for stripping federal courts of their ability to hear a case.  The unanimous decisions of other circuits bolstered the court’s rationale.

The court also addressed whether the Executive Branch’s involvement in consensual dismissal of an FCA action constituted a separation of powers violation.  Because both the court and attorney general must give written consent for the voluntary dismissal of a qui tam FCA claim, the hospital claimed this created an impermissible “built-in condition” that required Executive Branch approval before dismissing a case.  The court disagreed, holding that no such approval is required in cases of involuntary dismissal and, therefore, the Executive Branch approval in voluntary dismissal by a qui tam relator does not run afoul of the separation of powers doctrine.  This is because the government, which has been injured by the violative conduct, has a right to intervene where an otherwise meritorious FCA claim might be dismissed by a defendant on public disclosure grounds.

Accordingly, the court denied the hospital’s motions for interlocutory appeal on the questions of law presented.

Brasher v. Thomas Jefferson Univ. Hosp. Inc. — Jan. 2017 (Summary)

AGE DISCRIMINATION

Brasher v. Thomas Jefferson Univ. Hosp. Inc.
No. 16-1146 (3d Cir. Jan. 27, 2017)

The United States Court of Appeals for the Third Circuit affirmed a lower court’s grant of summary judgment to a hospital on a claim of age discrimination under the Age Employment in Discrimination Act (“ADEA”).

The hospital terminated the employment of a nurse in her 50s following clinical concerns.  The hospital cited the nurse’s failure to follow protocols, initiation of procedures exceeding her scope of practice, and documentation errors as reasons for her termination.  The nurse claimed the proffered justifications were pretextual.  The nurse offered a similarly situated individual, a fellow nurse in her 20s, who allegedly also made a serious medication error.  The court found the comparison unpersuasive because the comparator did not have a similar disciplinary record.  The nurse also cited the animosity of the staff as evidence of age discrimination toward her.  The court similarly found this argument unconvincing because the nurse did not demonstrate how other staff members were treated more favorably than her.  Finally, the court held that the nurse’s mere contention that her scope of practice violation was done with the prior approval of a physician was insufficient to raise suspicion that the hospital’s explanation for her termination was pretextual.

Because the nurse produced evidence to discredit only one of the hospital’s many reasons for terminating her employment, the nurse failed to demonstrate that her termination was the result of age discrimination under the ADEA.

Mullins v. Suburban Hosp. Healthcare Sys., Inc. — Feb. 2017 (Summary)

EMTALA

Mullins v. Suburban Hosp. Healthcare Sys., Inc.
Civil Action No. PX 16-1113 (D. Md. Feb. 6, 2017)

The United States District Court for the District of Maryland granted in part and denied in part motions to dismiss claims of medical malpractice and violations of the Emergency Medical Treatment and Active Labor Act (“EMTALA”).

A patient went to a hospital’s emergency room for stabilization of a hand injury.  When the patient’s request for a transfer to a hand specialty facility for treatment was denied, the on-call physician performed the surgery himself.  The patient later filed suit against the hospital, treating physicians, and the hand specialty facility for medical malpractice and violations of EMTALA.

Because the patient was screened, stabilized, diagnosed, and treated at the hospital, all of which are requirements under EMTALA, the court found that the patient had no basis to stake a claim under the statute.  The appropriateness of care, the court noted, is a different concern that implicates state medical malpractice laws and is not addressed by EMTALA.  EMTALA is not a federal malpractice statute.  Accordingly, the court granted the hospital’s motion to dismiss the claim.

The court also granted the hospital’s and physicians’ motions to dismiss the medical malpractice claims, because the patient did not comply with the appropriate Maryland procedures for filing his claims.  The court did, however, deny the hand specialty facility’s motion to dismiss the claim under EMTALA’s “reverse-dumping” provision, which mandates that hospitals with specialized capabilities “shall not refuse to accept an appropriate transfer” from another facility.  Therefore, the patient’s allegations that the hand specialty facility was a participating hospital with specialized services and refused his transfer request were sufficient to survive the motion to dismiss.

Finally, the court denied the patient’s motion to amend his complaint, on the basis that his proposed amendments had no bearing on the pending motions to dismiss.

Brugaletta v. Garcia — Feb. 2017 (Summary)

NEW JERSEY PATIENT SAFETY ACT PRIVILEGE

Brugaletta v. Garcia
Docket No. A-4342-15T1 (N.J. Super. Ct. App. Div. Feb. 6, 2017)

The Superior Court of New Jersey reversed a lower court’s order compelling the production of hospital documents, holding that the documents were privileged under the New Jersey Patient Safety Act.  The case arose out of a complaint filed by a former patient, alleging that the hospital and various providers had negligently diagnosed and treated her condition.

Under the New Jersey Patient Safety Act, hospitals are required to create a safety plan and to establish a dedicated patient safety committee.  These committees are intended to provide processes for analyzing harmful events, including so-called serious preventable adverse events (“SPAEs”).  To encourage hospitals to comply with these obligations, the Patient Safety Act attaches a privilege to specific kinds of information generated by hospitals when investigating and reporting adverse events to regulators.  In this case, the defendant-hospital argued that the Patient Safety Act privileged one of the documents in its possession, which was characterized as an “Event Detail History with All Tasks.”

The lower court determined that even though the hospital had acted in accordance with the procedural requirements of the Act, the document revealed that the patient had suffered a separate SPAE.  Because the hospital had failed to report this other SPAE, the lower court ordered the hospital to disclose the portion of the document that described the SPAE (even though it revealed aspects of the hospital’s self-critical analysis).

On appeal, the Superior Court of New Jersey sided with the hospital.  It explained that the privilege for a self-critical analysis exists independently from a hospital’s compliance with the reporting obligations.  In particular, it concluded that the self-critical analysis privilege did not depend on reporting SPAEs to the state Department of Health.  It held that the trial court erred in compelling the hospital to disclose the documents and reversed the lower court’s order.

Lalonde v. Cent. Me. Med. Ctr. — Jan. 2017 (Summary)

INDEMNIFICATION POLICIES

Lalonde v. Cent. Me. Med. Ctr.
Docket: And-16-68 (Me. Jan. 31, 2017)

The Supreme Judicial Court of Maine refused to dismiss a claim for indemnification brought against a hospital by a physician whose employment it had terminated, on the basis that the hospital’s corporate bylaws language stated that the hospital would indemnify any person who was or is a party to an action, suit, or proceeding, by reason of the fact that the person was an employee of the hospital.  Interestingly, the physician was seeking indemnification for the costs associated with defending an investigation and complaint brought against him by the Board of Licensure in Medicine.  And that investigation and complaint arose as a result of the hospital filing a report with the Board stating that the physician’s employment was terminated “because of concerns about his clinical competence and behavior.”

The hospital claimed that it could not be made to indemnify the physician for his defense because it was immune from liability for reporting the physician’s termination to the Board.  The court agreed that the hospital was immune for reporting, but held that the claim for indemnification was unrelated to whether the hospital was the entity that reported the physician to the Board.  Accordingly, immunity would not apply to the claim for indemnification.

Charles v. S. Baptist Hosp. of Fla., Inc. — Jan. 2017 (Summary)

PSQIA – PATIENT SAFETY ORGANIZATIONS

Charles v. S. Baptist Hosp. of Fla., Inc.
No. SC15-2180 (Fla. Jan. 31, 2017)

The Florida Supreme Court reversed the state appeals court and held that, in the absence of a state law protecting certain documents from discovery, a hospital cannot claim privilege over records relating to adverse medical incidents (“Amendment 7” records) by declaring them to be patient safety work product and submitting them through a voluntary reporting system established pursuant to the Federal Patient Safety and Quality Improvement Act (“PSQIA”).

Through Amendment 7, the Florida constitution gives patients a right to access documents related to adverse medical incidents that are created or received by health care facilities and providers.  According to the Florida Supreme Court, the PSQIA creates a voluntary, confidential system for health care providers to share data about errors, with the aim of improving health care delivery.  In this case, pursuant to the PSQIA, the hospital established a patient safety evaluation system for purposes of reporting “events that are not consistent with the routine operations of the hospital or the routine care of a patient or that could result in an injury.”

The confidentiality of those records came into dispute after the hospital was sued for malpractice.  During discovery, the plaintiff requested documents related to adverse medical incidents at the hospital and related to any physician who worked at the hospital.  The hospital claimed that many documents that would be responsive, because they were adverse incident reports, were privileged under the PSQIA as “patient safety work product.”

The Supreme Court of Florida reversed the lower court and held that insomuch as state law required health care providers to compile data on adverse medical incidents, patients had a right to access this data through the Florida constitution and the PSQIA did not abridge this right.  Because Florida law required providers to create and maintain adverse medical incident reports for patients to access, the adverse medical data collected by the hospital was exempted from the PSQIA because it “exists separately[ ] from a patient safety evaluation system.”  The court further held that the hospital’s choice to place the data in a safety evaluation system did not, alone, transform the data into patient safety work product.

The court also held that the PSQIA did not preempt Amendment 7.  Accordingly, the court ruled that the hospital could not claim privilege over the documents.

Munoz v. Watsonville Cmty. Hosp. — Jan. 2017 (Summary)

EMTALA

Munoz v. Watsonville Cmty. Hosp.
Case No. 15-cv-00932-BLF (N.D. Cal. Jan. 25, 2017)

The United States District Court for the Northern District of California granted dismissal in part and denied dismissal in part in a lawsuit alleging that a hospital violated the Emergency Medical Treatment and Active Labor Act (“EMTALA”) when it failed to diagnose a patient’s internal hernia, peritonitis, and septic shock and discharged her, despite her complaints that her pain level was an 8 on a scale of 10.

The patient, who previously underwent gastric bypass surgery, died after twice presenting to the emergency department, on the same day, complaining of severe pain.  While the patient was examined, given a laxative and pain medication, and determined to be suffering from an emergency medical condition (severe pain), the decision was ultimately made to discharge the patient despite her complaints that her pain level remained an 8 on a scale of 10.  After returning home, the patient suffered a cardiac arrest, which led to her death.  The patient’s son sued, alleging that the hospital violated EMTALA because it performed a disparate or cursory exam and failed to stabilize the patient’s emergency medical condition prior to discharge.

The court granted the hospital’s motion to dismiss the claim related to the adequacy of the screening examination.  The court noted that just because the patient came to the same ED twice in one day does not mean the ED was required to provide the same screening examination during both visits.  In support of this finding, the court pointed out the fact that the circumstances were different during the second visit than they were during the first.  In the end, the court noted that while the son may be able to support a cause of action for malpractice, based on the hospital’s failure to identify the patient’s emergency medical condition, the son failed to present evidence of disparate treatment to support a claim for violation of EMTALA.

The court refused to dismiss the claim related to failure to stabilize, however.  The court noted that the emergency medical condition identified by the ED physician was “severe pain” and, despite this, the patient was discharged with a pain level of 8 out of 10.  Further, during the patient’s second visit to the ED, she was not provided pain treatment (instead being treated with Ativan, for anxiety, Haldol, an antipsychotic, and a soap-suds enema).  These allegations were sufficient for the son’s claim to survive dismissal and move forward for additional litigation.

Adem v. Des Peres Hosp., Inc. — Jan. 2017 (Summary)

PEER REVIEW – COMPOSITION OF HEARING PANEL

Adem v. Des Peres Hosp., Inc.
No. ED104191 (Mo. Ct. App. Jan. 24, 2017)

The Missouri Court of Appeals for the Eastern District affirmed the judgment of a lower court dismissing a physician’s claims for injunctive relief, temporary restraining order, and declaratory judgment against his former hospital employer.

The physician, a member of the medical staff at the hospital, was informed that his privileges were going to be revoked.  The physician requested a hearing, but objected to the appointment of the hearing panel, which allegedly failed to comply with the medical staff bylaws because it was comprised of practitioners who did not have sufficiently similar experience to the physician and because one of the panel members was employed by the hospital’s parent.  Although Missouri law typically does not allow judicial oversight of decisions regarding staff privileges, a physician may bring a claim for injunctive relief to require the hospital to abide by its bylaws before revoking privileges.

In this case, the court looked at the bylaws and found no specific provision that disallowed an employee of the hospital’s parent company to serve as a member of a peer review committee.  In fact, the bylaws required physicians to participate in peer review activities, when requested, as a condition of their continued clinical privileges.  Further, the physician did not object to the appointment of the panel within the period of time allowed by the bylaws.  As such, the court found that the physician failed to provide sufficient facts that showed an “express, material, procedural violation of the [hospital’s] bylaws.”

The court declined to determine whether the appointed peer review committee members were “sufficiently similar” to the physician in “practice experience, education or training” because Missouri’s rule of non-review, which allows a court to examine only the procedural guarantees of a hospital’s bylaws, precluded such an inquiry.  Accordingly, the court affirmed the judgment of the lower court.