Federal Court Dismisses Physician’s Age Discrimination Claims by Finding That Comments Such as “Old, Infirm, or Lame” Were Sporadic and Made by Those with No Authority Over the Physician’s Employment, Among Other Things
The United States District Court for the District of Delaware granted in part and denied in part a physician’s employment discrimination claims against a health system (“system”) and individuals who worked at the system. The physician’s contract was terminated when the system eliminated its neuro-hospitalist program. The physician alleged age and disability discrimination under the Americans with Disabilities Act (“ADA”) and Age Discrimination in Employment Act (“ADEA”), among other things. The court dismissed all claims under the ADEA against the individual defendants since the statute did not impose liability on individuals who are not employers. The court also dismissed the physician’s claims for hostile work environment under the ADEA against the system finding that, even assuming such a claim is cognizable, comments referring to the physician as “old, infirm, or lame” were sporadic, statements suggesting a preference for “new graduates” were stray remarks, the alleged speakers had no authority over the physician’s employment and the conduct did not rise to the level of severe or pervasive. Finally, the elimination of the neuro-hospitalist program was found to be consistent with the system’s documented operational challenges, rather than a pretext for discriminatory motives. Katz v. Beebe Healthcare
Federal Court Grants Summary Judgment on Surgeon’s Breach of Contract Claims Finding That Clinic Had Valid Reason to Terminate Surgeon and Surgeon Was Not a Party or Third‑Party Beneficiary of the Contract Between the Clinic and Hospital
The United States District Court for the Federal District of Utah granted summary judgment to a surgical clinic and a hospital and dismissed claims brought by a surgeon who alleged breach of contract and defamation claims, among other things. The surgeon was employed by the clinic under a contract that required her to participate in trauma call services at the hospital, and worked at the hospital through a professional services agreement (“PSA”) entered into between the clinic and the hospital. The hospital refused to allow her to participate in trauma call after behavioral complaints, and because this was a “core duty” under her employment contract, the clinic terminated her for cause. On the breach of contract claims, the court held that the clinic had valid cause to terminate the surgeon because she could no longer fulfill a material term in the contract, and that she could not bring breach of contract claims against the hospital because she was neither a party nor third-party beneficiary of the PSA. As for the defamation claim, the court found that an automated affiliation verification from the hospital which directed the requestor to “call the MSO” could not be interpreted to have a defamatory meaning. Garvey v. Ogden Clinic Prof. Corp.
Federal Appeals Court Reverses Conviction Against Owner of Medical Equipment Distribution Company, Holding That the Anti-Kickback Statute Was Not Violated Since the Owner Did Not Leverage Power or Influence Over Healthcare Decisions and Payments Were Not for Referrals
The United States Court of Appeals for the Seventh Circuit reversed a district court’s judgment that there was sufficient evidence to find that an owner of a medical equipment distribution company had violated the Anti-Kickback Statute (“AKS”). The owner of the medical equipment distribution company organized an arrangement with a manufacturer, a marketing firm, and a billing agency to help advertise medical equipment to patients. The trial court found the owner of the company guilty of one count of conspiracy and three counts of offering and paying kickbacks in return for referral of Medicare beneficiaries to his company. The owner then appealed that the payments were lawful and were made for advertising, not for acts prohibited by AKS. The appellate court agreed with the owner and reversed the district court’s judgment, finding the evidence against the owner of the medical equipment distributor to be insufficient. The court explained that AKS inquiries involving non-physicians need to consider whether the payee leverages “fluid, informal power and influence” over healthcare decisions, and held that no AKS violation could be found since there was no evidence that the owner leveraged any form of informal power and influence over healthcare decisions, and that the payments were not for the referrals but for ordinary, legal services such as advertising, manufacturing and shipping products. United States v. Sorensen