Lampenfeld v. Pyramid Healthcare, Inc. – March 2015 (Summary)

WHISTLEBLOWER

Lampenfeld v. Pyramid Healthcare, Inc., Civil Action No. 3:14-CV-0283 (M.D. Pa. Mar. 4, 2015)

The United States District Court for the Middle District of Pennsylvania dismissed whistleblower protection and wrongful termination claims brought against a drug and alcohol treatment facility by its detoxification program director/nurse manager, holding that the nurse manager was not a covered employee under the Commonwealth’s whistleblower statute and her termination did not violate public policy.

The nurse manager in this case alleged that she reported to the director of nursing that a physician was billing for patient assessments and medical examinations, even though he never actually performed them. Almost a year later, after investigating a patient complaint involving a medication and charting error, the nurse manager reported to the director of nursing that the patient’s complaint was the result of the same physician’s “professional incompetence” and that the “nursing staff are fed up with him.” The director of nursing took the opportunity to share these comments with the physician, at which point he indicated the trust relationship between himself and the nurse manager had been “irrevocably broken.” Four days later, the nurse manager was placed on suspension, for insubordination to a supervisor. A few days later, the nurse manager reiterated her concerns about the physician’s care and billing practices in a letter. Two days after that letter, the nurse manager was terminated for insubordination and for making false or malicious statements about the physician (the medical director) and the director of nursing.

The nurse manager sued, alleging violation of the False Claims Act’s prohibition on retaliation and Pennsylvania’s whistleblower statute, as well as wrongful discharge contrary to public policy (because she was under a duty to report the physician’s incompetence).

In dismissing the claim under Pennsylvania’s whistleblower statute, the court held that the statute did not apply to the drug and alcohol treatment facility. Specifically, the court noted that the whistleblower statute covers only employees of a “public body” – which is defined as a body created by, or funded in any amount by or through, the Commonwealth. Although the facility did receive reimbursements from Medicaid and TRICARE for services it provided, the court held that such reimbursement did not constitute funding by the Commonwealth as intended by the whistleblower statute.

Additionally, the court held that the nurse manager was not discharged contrary to public policy. Employment in the Commonwealth is at-will and the only exception to this doctrine is if the employee’s discharge violates clearly mandated public policy. The court explained that nowhere in the nursing statutes or regulations is there an affirmative duty to report alleged instances of medical negligence. Therefore, the nurse manager’s termination was not contrary to clear public policy.