Nath v. Tex. Children’s Hosp. (Summary)

ATTORNEY’S FEES

Nath v. Tex. Children’s Hosp., No. 12-0620 (Tex. Aug. 29, 2014)

The Supreme Court of Texas upheld sanctions imposed on a physician, holding that there was sufficient evidence for the lower court to require the physician to pay the hospital’s and college of medicine’s attorney’s fees because the physician brought frivolous, time-barred claims. The court, however, remanded the case to determine whether the behavior of the hospital and the College of Medicine caused their legal expenses to accrue. The court pointed out that the defendants waited four years to file a summary judgment motion after they became aware that the physician’s claims were frivolous and time-barred. During these four years, the physician filed six amended complaints to which the defendants were required to respond, inflating their attorney’s fees to $1.4 million.

See Dissenting Opinion Here

Tibbs v. Bunnell (Summary)

PSQIA

Tibbs v. Bunnell, No. 2012-SC-000603-MR (Ky. Aug. 21, 2014)

The Supreme Court of Kentucky reversed a decision issued by the state’s Court of Appeals regarding the disclosure of a surgical nurse’s post-incident event report. The incident report was requested as part of a medical malpractice and wrongful death lawsuit filed by the estate of a deceased patient.

The medical malpractice action concerned an elective spine surgery performed at the University of Kentucky Hospital. The patient died due to complications from the surgery; later that day, a surgical nurse at the hospital generated a post-incident event report. When the patient’s estate requested peer review and incident reports related to the death, the physicians argued that the surgical nurse’s report was protected by the Patient Safety and Quality Improvement Act of 2005 (“PSQIA”). The PSQIA is a federal statute that protects information reported to patient safety organizations for the purposes of quality improvement and patient safety.

The Court of Appeals ruled that the PSQIA only protects documents employing a “self-examining analysis,” and had ordered the circuit court to review the surgical nurse’s report in order to see whether it was protected by the law. The Supreme Court of Kentucky reversed this decision, ruling that the nurse’s incident report was not protected by the PSQIA because its collection, creation, maintenance, and utilization was mandated by Kentucky law as part of its oversight of healthcare facilities. The Supreme Court of Kentucky concluded that information normally contained in an incident report is not privileged under the PSQIA.

U.S. ex rel. Helfer v. Associated Anesthesiologists (Summary)

FALSE CLAIMS – QUI TAM RELATOR

U.S. ex rel. Helfer v. Associated Anesthesiologists, No. 10-3076 (C.D. Ill. Aug. 25, 2014)

The United States District Court of the Central District of Illinois granted in part and denied in part an anesthesiology group’s motion to dismiss a lawsuit filed by a qui tam relator (“relator”). The relator, who had formerly served as a member of the anesthesiology group’s Board of Directors, alleged that the group’s billing practices were illegal under Illinois law and under the regulations issued by the Centers for Medicare & Medicaid Services (“CMS”).

Disputes arose after a business consultant advised the Board of the anesthesiology group to resubmit claims for epidural services administered for patients in labor. These proposed billing changes would indicate that an anesthesiologist had continuously performed the service from the time anesthesia was administered to the delivery of the child. The consultant further advised the Board that it could avoid review from insurance companies by capping its billing at ninety percent of the maximum amount that other anesthesia groups in the state were charging.

The relator, who was present for the discussion, reviewed the CMS regulations after the meeting. The relator came to the conclusion that the proposed billing practice would be illegal, since none of the anesthesiologists actually remained in the Obstetrics Department after beginning the epidural anesthesia service. When the relator aired his concerns with other physicians in the group, one said that he was “just trying to cause trouble.” The relator ultimately chose to contact CMS to see whether the proposed arrangement was legal. When the anesthesiology group learned about this, they informed the relator that he could either resign or be terminated. The relator chose to file a lawsuit, alleging violations of both state and federal laws.

The anesthesiology group and the other defendants succeeded in dismissing several claims due to procedural and jurisdictional defects. However, the court ruled that the relator had adequately alleged federal and state claims for retaliatory discharge, and also permitted the relator to continue his lawsuit for violations of both state law and the federal False Claims Act. In addition, the court held that the relator could sue for violations of the Illinois Insurance Claim Fraud Prevention Act, so long as the violations had occurred within the past eight years.

U.S. ex rel. Bartlett v. Ashcroft (Summary)

STARK LAW/ANTI-KICKBACK STATUTE

U.S. ex rel. Bartlett v. Ashcroft, No. 3:04-57 (W.D. Pa. Aug. 21, 2014)

The United States District Court of the Western District of Pennsylvania granted in part and denied in part a motion for summary judgment filed by two former employees in their lawsuit against the physician-owners of a CT scanning facility. The employees alleged that these physicians violated federal law by making prohibited patient referrals to a hospital. According to the employees, the hospital was paying $410 per CT scan in order to induce patient referrals.

Certain types of patient referral schemes are prohibited by the federal Anti-Kickback Statute and Stark Law, and healthcare providers are often required to certify compliance with these laws as part of their Medicare billing. Some jurisdictions hold that falsely certifying compliance with these laws can cause healthcare providers to become liable under the False Claims Act for every bill they submit to Medicare. In this case, the court granted summary judgment in favor of the employees on their claim that the CT scan payments violated the Stark Law. The court denied the employees’ motion for summary judgment regarding violation of the Anti-Kickback Statute and the False Claims Act. The court held that genuine disputes of material facts remained regarding these laws, and that they would need to be heard at trial.

Vosough v. Kierce (Summary)

BREACH OF CONTRACT/TORTIOUS INTERFERENCE

Vosough v. Kierce, No. L-6420-09 (N.J. Super. Ct. App. Div. Aug. 27, 2014)

The Superior Court of New Jersey reversed the judgment of a lower court regarding the obligations a hospital owed to independently contracted OB/GYN specialists.

Three independently contracted OB/GYN specialists brought a lawsuit against a hospital, arguing that an intolerable work environment, humiliation, and intimidation forced them to resign from their positions. The lawsuit alleged breach of contract, tortious interference with contract, and tortious interference with the prospective economic advantage. The OB/GYN specialists argued that they were entitled to compensation for the harassment they suffered at the hands of their supervisor. A jury verdict awarded damages to the OB/GYN specialists totaling $1,269,079. The hospital appealed the jury verdict.

The court found that none of the OB/GYN specialists’ claims should have even survived summary judgment. The hospital was found to have violated its own bylaws, specifically a policy to treat others with dignity and respect, by failing to discipline a belligerent and unreasonable supervisor. However, the state common law does not protect an employee from a hostile work environment created by a disagreeable supervisor. Also, because the OB/GYN specialists were contracted with the hospital itself, the specific supervisors could not be held personally liable for their actions. That the supervisors may have performed their duties poorly, or to the dissatisfaction of the OB/GYN specialists, did not mean that they were acting outside the scope of employment. Additionally, the court found that the hospital was not contractually obligated to the OB/GYN specialists beyond the guaranteed 60-day notice of termination. The terms of the at-will employment contract did not bind the hospital to pay anticipated lost wages for an indefinite period of time.

Adams v. Cedars-Sinai Med. Ctr. — Aug. 2014 (Summary)

PEER REVIEW – SUSPENSION – FAILURE TO EXHAUST

Adams v. Cedars-Sinai Med. Ctr.
No. B247957 (Cal. Ct. App. Aug. 22, 2014)

The California Court of Appeal for the Second District, Division 3, affirmed a trial court’s motion to strike a physician’s claim that he was denied the right to practice medicine, finding that the hospital’s activity was protected by the anti-SLAPP statute.

Members of a hospital staff began noticing strange and paranoid behavior from a physician, who was videotaping hospital visitors because he believed he was being followed by the FBI. The hospital’s Chief Medical Officer summarily suspended the physician, providing him with both oral and written notice. The physician was given a letter advising him that he could invoke his peer review hearing rights within 30 days of this notice. Two weeks later, another letter was sent to the physician, reminding him of his right to request a peer review hearing, and alerting him that if he failed to request a hearing, the right would be deemed waived. The physician never requested a hearing during this time period. After a lengthy suspension, the hospital reinstated the physician’s privileges. The physician then sued the hospital for denying him the right to practice medicine during the time of his summary suspension. The hospital then filed a motion to strike under the anti-SLAPP statute, which the trial court granted.

The court agreed with the trial court’s ruling, holding that the hospital’s suspension of the physician was a part of the peer review process, and was therefore protected conduct. The court also held that the suspension constituted peer review even though it was conducted by a single administrator, the hospital CMO, because the hospital bylaws granted him the power to make suspensions in the peer review process. Therefore, the hospital was found to have met its burden to invoke anti-SLAPP protection. The court additionally held that the trial court’s ruling was appropriate because the physician failed to exhaust the administrative remedies made available to him upon his suspension.

Shaw v. Superior Court of L.A. Cnty. (Summary)

RETALIATION

Shaw v. Superior Court of L.A. Cnty., No. B254958 (Cal. Ct. App. Aug. 21, 2014)

The California Court of Appeal granted a writ of mandate and ruled that a former hospital employee is entitled to a jury trial on claims of improper retaliation.

A former hospital employee complained to the healthcare operating system about issues regarding quality of care, services provided, and certification and licensure of healthcare professionals. Soon after voicing her complaints, the employee was terminated. The employee then brought claims against the hospital, seeking a jury trial. However, the request for a jury trial was denied, and the court concluded that the former employee’s cause of action was purely equitable. The former employee then challenged the denial of the jury trial by petitioning for a writ of mandate.

The court found that a writ relief should be granted to resolve the issue of statutory interpretation regarding the Health and Safety Code. In addressing the code’s statutory interpretation, the court held that both the language and the legislative history behind the statute reflect the original lawmakers’ intent that a jury trial be granted. The court reached this conclusion by determining that the legislature added the language at issue specifically to broaden the scope of remedies available to harmed employees, and to give the court greater discretion. Additionally, the court found that the former employee’s cause of action was based in law rather than equity. Because her damages stemmed from the hospital’s statutory violation, her cause of action is triable before a jury.

Budhun v. Reading Hosp. and Med. Ctr. (Summary)

FMLA

Budhun v. Reading Hosp. and Med. Ctr., No. 11-4625 (3d Cir. Aug. 27, 2014)

The United States Court of Appeals for the Third Circuit vacated a district court’s dismissal of an employee’s Family Medical Leave Act (“FMLA”) interference claim against a hospital, holding that there are genuine issues of material fact that a jury must decide. Plaintiff, employee, worked at defendant, hospital, as a credentialing assistant. The employee broke a bone in her hand which limited her ability to type at her normal pace, which resulted in the employee taking FMLA leave for a week. Prior to returning to the hospital, the employee saw a physician and obtained a note stating she could return to work with no restrictions. The hospital informed her that due to her broken hand, she would not be able to perform her typing duties at her expected capacity. The employee went back on FMLA leave, and visited her physician to have him complete the required FMLA leave certification form. On the form, the physician indicated that the employee was unable to perform “any of his/her job functions.” The employee’s FMLA leave expired without her physician clearing her to return to work; therefore, the hospital informed her she would be terminated. The employee brought this action claiming that the hospital interfered with her right to be restored to her position, as granted by the FMLA, after her first attempt to return to work.

The court held that there were genuine issues of material fact that needed to be decided by a jury; specifically, whether the employee was capable, and cleared by her healthcare provider, to return to work. Relying on the FMLA regulations, the court stated that the only way for an employer to keep an employee from returning to work for not being able to perform the essential functions of her job is to provide a list of the essential functions at the time the employee takes the FMLA leave. Additionally, the court noted the inconsistencies in the physician’s notes and held that these issues are appropriate for a reasonable jury to decide.

U.S. ex rel. Guardiola v. Renown Health (Summary)

FALSE CLAIMS – QUI TAM RELATOR

U.S. ex rel. Guardiola v. Renown Health, No. 3:12-cv-00295-LRH-VPC (D. Nev. Aug. 20, 2014)

The United States District Court for the District of Nevada denied a hospital’s motion to dismiss a former employee’s False Claims Act (“FCA”) claim, holding that the complaint adequately alleged a plausible claim for relief against the hospital. The relator, a registered nurse and former compliance professional at defendant, hospital, alleged that she discovered a fraudulent billing scheme while employed at the hospital. Relator brought the scheme to upper management’s attention, but nothing was resolved. Specifically, the relator alleged that the hospital incorrectly coded outpatients as inpatients, resulting in higher Medicare payouts.

The court held the relator’s allegations should not be dismissed because the relator adequately set forth the details of an alleged scheme and its falsehoods, as well as the manner in which the allegedly false claims were submitted to Medicare for payment. The court stated that the relator provided 579 inpatient claims that were allegedly incorrectly billed because they were discharged from the hospital in the same calendar day making them outpatients. Furthermore, the relator sufficiently alleged that the hospital had actual knowledge of the fraud, or, at a minimum, acted in deliberate ignorance of the falsity of the inpatient claims because an audit of the hospital’s billing and documentation practices revealed a “significant” problem that the hospital was submitting inaccurate outpatient claims as inpatient claims and it failed to take appropriate corrective measures.

Bode v. L.A. Doctors Hosp. Corp. (Summary)

HCQIA IMMUNITY

Bode v. L.A. Doctors Hosp. Corp., B244502 (Cal. Ct. App. Aug. 20, 2014)

The California Court of Appeals ruled that a trial court properly denied a hospital’s motion for summary judgment based on HCQIA immunity because there was evidence that the plaintiff physician was not provided notice and a hearing as required by the safe harbor provisions of the Act. However, the appeals court ruled that the trial court improperly adjudicated the issue of immunity in favor of the plaintiff physician because she did not file a motion for summary adjudication. Thus, the issue should have remained for determination at trial. The appeals court reversed and remanded the matter to the lower court “to determine the issue of immunity under HCQIA by way of a motion by [the plaintiff physician] for summary adjudication, a court or jury trial on disputed factual issues, or other appropriate procedure….”

The appeals court also ruled that the trial court erred in not granting summary judgment to the hospital on the issue of immunity under California law. However, the appeals court ruled that the trial court properly determined that the anesthesiologist showed no evidence of outrageous conduct or severe emotional distress, and no evidence that the hospital acted with malice.