Elkharwily v. Franciscan Health Sys. — Aug. 2016 (Summary)

NPDB REPORT; DISABILITY DISCRIMINATION

Elkharwily v. Franciscan Health Sys.
Case No. 3:15-cv-05579-RJB (W.D. Wash. Aug. 15, 2016)

The United States District Court for the Western District of Washington granted in part and denied in part a health system’s motion for summary judgment against a hospitalist who brought a claim for defamation as well as claims for disability discrimination in violation of the Washington Law Against Discrimination (“WLAD”) and the Rehabilitation Act.

After offering the hospitalist a provisional hospitalist position, the health system sent the application to the Regional Credentials Committee, which disclosed that the hospitalist had bipolar disorder.  The hospital subsequently revoked the hospitalist’s temporary medical privileges. Following the Medical Executive Committee’s recommendation that the hospitalist’s application for membership and privileges at the hospital be denied and a hearing and appeal affirming the recommendation, the health system reported the denial of medical privileges to the National Practitioner Data Bank (“NPDB”).

With respect to the hospitalist’s defamation claim, the court rejected the hospitalist’s argument that the health system defamed the hospitalist by reporting the denial of privileges to the NPDB because the report fell within the Health Care Quality Improvement Act privilege to protect professional review actions. The court found no issue of fact with regard to the consistency between the report and the action taken. Thus, the court granted the health system’s motion for summary judgment with respect to the defamation claim.

Turning to the WLAD claim, the court denied the health system’s motion to dismiss, but dismissed the hospitalist’s claim alleging discrimination based on national origin and race. The hospitalist showed that he could have possessed the requisite education and experience to be granted full privileges. However, while the hospital showed a nondiscriminatory reason for denying the hospitalist’s medical privileges, because the record showed that the hospitalist’s bipolar disorder was at least a factor in the health system’s decision to deny medical privileges at every stage of the hospitalist’s application, the court denied the WLAD claim to the extent of discrimination based on disability, and granted his claim on the basis of national origin and race.

Lastly, the court rejected the hospitalist’s allegation of discrimination based on his disability status in violation of the Rehabilitation Act. The court reasoned that the hospitalist failed to show that he was discriminated against solely because of his disability. Rather, the record showed a multitude of evidence supporting the denial of his medical privileges, and thus granted the health system’s motion for summary judgment on the Rehabilitation Act based claim.

Fallon v. Mercy Catholic Med. Ctr. of Se. Pa. — Aug. 2016 (Summary)

RELIGIOUS DISCRIMINATION

Fallon v. Mercy Catholic Med. Ctr. of Se. Pa.
Civil Action No. 16-00834 (E.D. Pa. Aug. 9, 2016)

The United States District Court for the Eastern District of Pennsylvania granted a defendant hospital’s motion to dismiss a religious discrimination claim brought by a former employee, who was terminated due to his unwillingness to be vaccinated.

The hospital required its employees to obtain a flu vaccination or submit an exemption form to obtain a religious exemption.  The employee was granted an exemption two years in a row by providing the hospital with an essay, then was denied an exemption the third year, and was informed that he would need to provide a letter on official clergy letterhead supporting his request for an exemption.  In response, the employee submitted an essay and letter explaining that he couldn’t provide such clergy letter because he was not a member of an official religious organization and explained that his reasoning behind requesting the exemption was his conscience.

The hospital denied the exemption, and the employee brought a claim for religious discrimination under Title VII of the Civil Rights Act of 1964.  The court ruled that the employee failed to state a claim for religious discrimination, finding that: the employee’s mindset was more personal and social rather than spiritual; his beliefs regarding the vaccination consisted of a single governing idea rather than a belief system; the employee explicitly stated that he was not a member of an organized religion, and he did not belong to a religious congregation; and the employee did not claim that his reasons for refusing to be vaccinated were based on a religious belief.

Olson v. Fairview Health Servs. of Minn. — Aug. 2016 (Summary)

QUI TAM

Olson v. Fairview Health Servs. of Minn.
No. 15-1780 (8th Cir. Aug. 8, 2016)

The United States Court of Appeals for the Eighth Circuit affirmed a district court’s grant of a motion to dismiss in favor of a defendant medical center against a relator, who brought a qui tam action alleging violations of the False Claims Act (“FCA”).

The relator alleged that the medical center fraudulently induced the Minnesota Department of Human Services to over-reimburse it for services provided to Medical Assistance patients by claiming that the children’s unit of the medical center was a children’s hospital under an amendment that excluded children’s hospitals from a reimbursement reduction.  The relator maintained that the medical center knowingly presented or caused to be presented false or fraudulent claims for payment or approval of Medicaid monies, knowing that it did not legally qualify for the exemption.

The court was unpersuaded by the relator’s argument, reasoning that the relator assumed that the term “children’s hospital” is simply a derivative of combining the definition of “children” and “hospital.”  The court found that there was no statutory definition, and that in the absence of an explicit statutory definition of “children’s hospital,” the statute was ambiguous, and a reasonable interpretation of ambiguous statutory language does not give rise to an FCA claim.  Therefore, the court affirmed the judgment of the district court.

U.S. ex rel. Swoben v. United Healthcare Ins. Co. — Aug. 2016 (Summary)

QUI TAM

U.S. ex rel. Swoben v. United Healthcare Ins. Co.
No. 13-56746 (9th Cir. Aug. 10, 2016)

The United States Court of Appeals for the Ninth Circuit vacated a district court’s judgment that dismissed a qui tam relator’s complaint, which alleged that certain Medicare Advantage organizations submitted false certifications in violation of the False Claims Act.

The relator claimed that the defendant organizations submitted false certifications by performing biased retrospective medical record reviews designed to not identify erroneously reported diagnosis codes, which the district court dismissed, concluding that relator failed to allege a False Claims Act claim with particularity.

The relator appealed, and the defendant organizations argued that during the relevant time period, there was no authority which indicated that a Medicare Advantage plan was obliged to undertake affirmative steps to uncover potentially unsupported codes before it could certify the third-party risk adjustments based on its best knowledge, information, and belief.

The appeals court held that in light of CMS guidance, Medicare Advantage organizations have always had an obligation to take steps to ensure the accuracy, completeness, and truthfulness of the encounter data submitted.  When Medicare Advantage organizations design retrospective reviews of enrollees’ medical records deliberately to avoid identifying erroneously submitted diagnosis codes that might otherwise have been identified with reasonable diligence, those organizations can no longer certify based on the standard set forth by CMS.  The appeals court further noted that this is especially the case when, as the relator alleged, an organization was on notice that its data included a significant number of erroneously reported diagnosis codes.

Additionally, the appeals court noted that blind coding is not consistent with the good faith requirement when it is used to avoid or conceal over-reporting errors: if Medicare Advantage organizations perform audits, identify both under-reporting and over-reporting, but withhold information about the over-reporting, the result is a false certification.  Therefore, the relator’s allegations were a cognizable legal theory and, consequently, the appeals court vacated the district court’s judgment.

Owensboro Health, Inc. v. U.S. Dept of Health and Human Servs. — Aug. 2016 (Summary)

MEDICARE DISPROPORTIONATE SHARE

Owensboro Health, Inc. v. U.S. Dep’t of Health and Human Servs.
Nos. 15-6109 and 15-6110 (6th Cir. Aug. 10, 2016)

The United States Court of Appeals for the Sixth Circuit affirmed a district court’s grant of summary judgment in favor of the federal government and against three hospitals, holding that the district courts were correct in concluding that the Medicare statute is unambiguous in excluding Kentucky Hospital Care Program (“KHCP”) patient days from the calculation of the Medicare Disproportionate Hospital Share (“DHS”) payment.

Kentucky enacted KHCP, a program that provides medical coverage to low-income individuals who do not qualify for Medicaid.  The hospitals submitted their Medicare cost reports to their fiscal intermediaries, and in their computations for the DHS payment, the hospitals included both Medicaid and KHCP patient days in their calculations.  The fiscal intermediaries disagreed with the inclusion of the KHCP patient days, and excluded such patient days from the DHS payment.  The hospitals went through the Medicare administrative process, then sought review in district courts, which ruled that the KHCP patient days should be excluded from the calculation, and the hospitals then appealed to the court of appeals, which consolidated the appeals.

The appeals court reviewed the Medicare statute to determine whether KHCP patient days should be included or excluded from the calculation.  The appeals court stated that it was clear that Congress’s use of the phrase “eligible for medical assistance under a State plan approved under subchapter XIX” is synonymous with being eligible for Medicaid – thus, in order for patient days to be considered in the calculation for DHS payment, a patient must be eligible for Medicaid.  The appeals court then found that, in accordance with the KHCP program, individuals must be ineligible for Medicaid in order to qualify for coverage.  Since KHCP patients were ineligible for Medicaid, the court affirmed the district courts’ rulings that the statute unambiguously excludes KHCP patient days from the calculation for DHS payments.

WLB Radiology, LLC v. Mercy Health N., LLC — Aug. 2016

BREACH OF CONTRACT

WLB Radiology, LLC v. Mercy Health N., LLC
No. L-16-1015 (Ohio Ct. App. Aug. 5, 2016)

The Ohio Court of Appeals affirmed a trial court’s grant of summary judgment in favor of a defendant health system on claims of breach of contract and tortious interference with contract and business expectations brought by a plaintiff radiologist’s limited liability company.

The health system and radiologist entered into a professional services agreement and after a number of months, the health system terminated the agreement, without cause.  The agreement called for a 90-day notice period, but the health system compensated him based on his average salary for the three months prior to termination instead of allowing the radiologist to provide services during the notice period.  The radiologist filed a lawsuit against the health system, among others, and alleged breach of contract and tortious interference with contract and business expectations, among other things.  The trial court granted summary judgment in favor of the health system, and the radiologist appealed as to the claims of breach of contract and tortious interference with contract and business expectations.

The radiologist argued that the health system breached the agreement when it unilaterally stopped paying him for reading CT scans and for working overtime, and also breached the agreement when it calculated his average salary for the three months prior to termination, since that calculation did not include reading CT scans and working overtime.  However, the court agreed with the health system and found that the agreement clearly stated that he was to read CT scans only as requested by the health system, and that he did not submit the proper documentation required under the agreement.  Therefore, the court held that the health system did not breach the agreement.

As for the interference with patients claim, the radiologist argued that the health system prevented him from providing follow-up care to his patients.  The health system countered that the radiologist never identified any patients with whom he had contracts and that there was no evidence that it intentionally refused access to facilities or patients.  The court agreed with the health system and held that the state did not recognize a claim for negligent interference, so the lack of evidence of intent made summary judgment appropriate.  On the claim of interference with referral services, the court found that the radiologist had not presented admissible evidence that the health system told potential referral sources that he could no longer perform procedures.

Azomani v. State — Aug. 2016 (Summary)

FRAUD AND ABUSE

Azomani v. State
No. 2015–KA–00050–COA (Miss. Ct. App. Aug. 9, 2016)

The Court of Appeals of Mississippi affirmed a jury’s verdict finding a physician guilty of Medicaid fraud.

A physician used the incorrect CPT Code, 99215, to bill Medicaid for services rendered to 125 children, resulting in him receiving the maximum payment for those services.  The Medicaid Fraud Control Unit investigated the physician’s billing practices, and found that the services were improperly billed to Medicaid.  The physician was indicted, found guilty of fraudulently misusing Medicaid billing codes, and he appealed arguing, among other things, that there was no evidence that he intended to improperly bill Medicaid.

The physician argued that he relied on the results of an audit by the Mississippi Department of Medicaid, which reported three coding errors, but none related to 99215, and that his reliance shows that there is no evidence that he “willfully, unlawfully, and feloniously” filed fraudulent claims for Medicaid benefits.  The appeals court focused on the testimony of the Program Integrity Director of the Mississippi Department of Medicaid, who stated that the physician was ultimately responsible for submitting properly coded bills, and that viewed in the light most favorable to the state, a jury could have found that the physician was ultimately responsible, regardless of the errors in the audit, and affirmed the conviction.

Cuellar v. Sw. Gen. Emergency Physicians, PLLC — Aug. 2016 (Summary)

RETALIATION

Cuellar v. Sw. Gen. Emergency Physicians, P.L.L.C.
No. 15-51078 (5th Cir. Aug. 4, 2016)

The United States Court of Appeals for the Fifth Circuit reversed the district court’s decision to grant defendant physician group’s motion to dismiss plaintiff nurse practitioner’s retaliation claim.

The nurse practitioner, an employee of the physician group, filed a claim against the group alleging sexual harassment and retaliation.  The nurse practitioner alleged that she was terminated after she reported that her supervisor promised to “spank her if she misbehaved.”  The district court granted the physician group’s motion to dismiss the sexual harassment and retaliation claim, and the nurse practitioner appealed the ruling solely on the retaliation claim.

The physician group argued that the nurse practitioner’s retaliation claim should be dismissed because there was no viable sexual harassment claim.  The appeals court held that the nurse practitioner’s retaliation claim does not depend on the viability of her sexual harassment claim, and ruled that since there was enough information in her complaint to support a retaliation claim, the district court’s grant of the physician group’s motion to dismiss was reversed.

Nam v. Regents of the Univ. of Cal. — July 2016 (Summary)

SLAPP

Nam v. Regents of the Univ. of Cal.
No. C074796 (Cal. Ct. App. July 29, 2016)

The Court of Appeal of California affirmed the trial court’s decision to deny defendant educational institution’s special motion to strike based on the anti-SLAPP (“Strategic Lawsuit Against Public Participation”) statute, holding that the plaintiff resident’s claims for sexual harassment and retaliation were not protected First Amendment activities under the statute.

After a resident drafted an email expressing concerns about patient care and refused the alleged sexual advances of the residency program director, she received complaints and warnings, was investigated, and ultimately given written notice of termination.  The resident filed a complaint against the educational institution for, among other things, sexual harassment and retaliation.  The institution moved to strike the resident’s complaint, alleging that it constituted a SLAPP because the resident’s complaint arose out of complaints based on the institution’s protected activity as part of an official proceeding.  The resident argued that her complaint did not arise out of the formal documentation of complaints and the formal documentation of her termination, but out of her voicing concern for patient safety, being sexually harassed, and being retaliated against when she publicly expressed her concerns for patient care, and refused the physician’s alleged advances.

The court rejected the educational institution’s argument.  The court stated that accepting the institution’s argument would subject most harassment and retaliation claims to an anti-SLAPP motion to strike, since the institution could use protected activities such as compiling complaints, conducting investigations, and giving written notice of suspension or termination as means to discriminate or retaliate.  The court also stated that the resident alleged the wrongdoings of sexual harassment and retaliation, and such conduct is not a protected activity.  Thus, since the alleged wrongdoings are not protected activities, the institution could not succeed on a motion to strike based on the anti-SLAPP statute.  The court further noted the questionable nature of characterizing the resident’s claim as a SLAPP because it is unlikely that the resident’s suit would be able to stifle the institution from conducting protected activities, as is the motivation for a SLAPP.

Glaskox v. George Cty. Hosp. — Aug. 2016 (Summary)

EMTALA

Glaskox v. George Cty. Hosp.
Civil No. 1:16cv9-HSO-JCG (S.D. Miss. Aug. 1, 2016)

The United States District Court for the Southern District of Mississippi granted a defendant hospital’s motion for judgment on the pleadings, dismissing a patient’s Emergency Medical Treatment and Active Labor Act (“EMTALA”) claim for failure to comply with the pre-suit notice requirement of state law.

The plaintiff patient went to a hospital’s emergency department due to abdominal pain after an abdominal surgery.  Since only nine days had passed since the patient’s surgery, a physician determined that it would be best to transfer the patient to the medical center where she received the surgery in order for the patient to receive a higher level of care from physicians who are familiar with her case.  The patient alleged that prior to her transfer she went into shock and was not in a stable condition.  The hospital proceeded with the transfer and the patient suffered limb complications resulting in amputation.  The patient filed an EMTALA claim against the hospital asserting that the hospital failed to stabilize her before she was transferred, and that failure caused her injury and a loss of chance of a better result.

EMTALA allows patients injured by hospital failure to obtain damages available under state law, thereby acting in concert with state law.  In this case, state law requires the patient to file a pre-suit notice of her claim with the hospital in order to proceed, or risk having her claim dismissed. The patient did not file a pre-suit notice with the hospital, and argued that the state requirement was in conflict with EMTALA which would prevent her from complying with the pre-suit notice requirement.

The court held that the pre-suit notice requirement was not in conflict with EMTALA, and in theory would actually support the underlying policy of EMTALA by allowing hospitals to respond to patient allegations more quickly in order to prevent further patient injuries due to similar treatment.  Because the pre-suit notice requirement was not in conflict, and such notice is required under state law in order to proceed with the EMTALA claim, the court granted the hospital’s motion for judgment on the pleadings and dismissed the patient’s EMTALA claim.