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Due Process

Aldridge v. Texas Health and Human Services Commission (W.D. Tex.)

Outcome:   Very favorable

Issue

The issue in this case was whether the Texas Health and Human Services Commission (Texas HHS) wrongfully excluded a physician from the Medicaid program without due process. 

AMA interest

The AMA believes that a fair and objective hearing should always be accorded to a physician whose professional conduct is being reviewed.  It supports fairness in procedures for selection and deselection in managed care plans serving Medicaid beneficiaries.

Case summary

Before entering medical school, Milissa Aldridge, MD was a licensed pharmacist.  She used the earnings from her pharmacy practice to help pay for her medical school expenses.  As part of her practice, she enrolled as an approved pharmacist in the Texas Medicaid program.

When Dr. Aldridge graduated from medical school, she discontinued her pharmacy practice and entered into an agreed order with the pharmacy board, under which her pharmacist’s license was classified as inactive.  However, she did not inform Texas HHS, which administers the Texas Medicaid program, of the change in her licensure.

Texas HHS learned of the change directly from the pharmacy board and excluded Dr. Aldridge from the Medicaid program.  Apparently, Texas HHS sent her a certified letter notifying her of the exclusion, for which her husband allegedly signed a receipt.  However, neither he nor Dr. Aldridge recalls receiving the letter.

Dr. Aldridge completed her residency training in pediatric oncology and became one of only 36 board certified pediatric radiologists in the State of Texas.  In 2000, she applied for qualification as a physician in the Texas Medicaid program, and she indicated on the application that she had never been excluded from any state or federal programs that provide medical services.  All during that time, she had left her pharmacist license in inactive status, but she had not undone the Medicaid exclusion.  Thus, her physician enrollment application contained an unintentional misstatement.  Nevertheless, she was accepted as a physician in the Texas Medicaid program.

Dr. Aldridge was employed by a medical group from 2000 to 2009.  During that time, she treated numerous Medicaid patients.  In 2009, the Texas HHS Office of Inspector General discovered the misstatement in her application and disqualified her from the Medicaid program.  As a result of this deselection, she lost her hospital privileges and her employment.

Dr. Aldridge protested the disqualification, but Texas HHS said it was entitled to take this action as part of its administrative authority.  It further said that she had no right to a due process hearing or to an appeal.  Texas HHS said that she could reenroll in the Medicaid program, but only if she repaid the $834,000 that Medicaid had paid to the medical group where she had been employed.

Dr. Aldridge sued Texas HHS in state court for declaratory and injunctive relief.  She contended that Texas HHS had acted unreasonably and denied her of valuable rights without due process.  She asked to be readmitted to the Texas Medicaid program without having to pay the $834,000.  Texas HHS removed the case to the United States District Court for the Western District of Texas, asserting that federal law was at issue. 

Pursuant to a settlement, the case was dismissed.

Litigation Center involvement

The Litigation Center and the Texas Medical Association each awarded Dr. Aldridge a financial grant to offset her legal expenses.

Columbia/JFK Medical Center v. Spunberg, 784 So.2d 541 (Fla. App. Ct. 2001)

Also under Hospitals and Medical staff

Outcome:  Very favorable

Issue

The issue in this case was whether a hospital violated medical staff bylaws by refusing to renew the staff privileges of two radiation oncologists.

AMA interest

The AMA supports the enforceability of medical staff bylaws.

Case summary

This case arose from a hospital’s refusal to renew the staff privileges of two radiation oncologists, because of the hospital’s business decision to exclusively contract with the University of Miami School of Medicine for all radiation treatment of cancer patients.  The hospital did not claim that its decision to not renew the privileges of the two radiation oncologists was based on their competence or conduct.  Rather, the decision was based solely on its right to enter into an exclusive contract with other physician groups. 

The two radiation oncologists filed an action for a preliminary injunction and damages, alleging that the hospital breached its medical staff bylaws, Florida statutes, and the administrative codes, all requiring that reappointment and renewal of privileges be judged on quality-based criteria and not on any additional business or economic rationales.  The trial court granted the preliminary judgment, and the hospital appealed.  The appellate court affirmed the injunction, and the case then went to trial.  The jury then found in favor of the plaintiffs and awarded them $2.5 million in lost profits and $20.25 million in punitive damages.

AMA involvement

The AMA filed an amicus curiae brief, joined by the American College of Radiology, the Florida Medical Association, and the Florida Radiological Society, arguing in favor of the enforceability of the medical staff bylaws.

Crow v. Penrose-St. Francis Healthcare System, 169 P.3d 158 (Colo. 2007)

Also under Peer review and Hospitals

Outcome:   Unfavorable

Issue

The issue in this case was whether a medical peer review action should proceed without judicial interference, notwithstanding the physician’s right to due process.

AMA interest

The AMA supports the peer review process, but it also believes that a physician’s due process rights must be respected.

Case summary

Dr. Crow, a physician on the medical staff of Penrose-St. Francis Hospital, brought a lawsuit to challenge a peer review action pending against him.  He alleged that the peer review proceedings were procedurally flawed in many respects, his privileges had been summarily suspended, and his reputation injured while the hospital unduly protracted the proceedings.  He asked that the peer review be enjoined and that he be awarded monetary damages.  The hospital moved to dismiss the trial court proceeding, primarily on the ground that the dispute was not yet “ripe” (i.e., adequately concrete and defined to warrant judicial decision), but that motion was denied. 

After the trial court refused to dismiss the case, the hospital, in an extraordinary action, asked the Colorado Supreme Court to order the trial court to dismiss Dr. Crow’s suit.  The hospital asserted that Dr. Crow’s suit, if allowed to continue prior to the completion of the peer review proceedings, would chill the conduct of further peer review actions.

The Colorado Supreme Court ruled that Dr. Crow’s case should be dismissed as premature.  Thus, Dr. Crow would have to wait until exhaustion of the peer review process before he could challenge it.  The Supreme Court did not address the hospital’s contention that Dr. Crow’s suit would unduly chill peer review in Colorado.

Litigation Center involvement

The Litigation Center filed a brief in the Colorado Supreme Court on behalf of the AMA, the Colorado Medical Society, and the American College of Surgeons.  The brief advised the Supreme Court how organized medicine believes the public health interests in peer review should be balanced against the private concern for due process.  It recommended that the Supreme Court allow the trial court to retain jurisdiction over the case.

Colorado Supreme Court brief

DeVore v. Heritage Provider Network (Cal. Ct.App.)

Also under Termination of physician participation in provider networks

Outcome:    Neutral

Issue

The issue in this case was whether a physician could be terminated from a provider network without due process.

AMA interest

The AMA believes a physician should be afforded due process if the professional conduct of the physician is reviewed and as a result of the review the reputation, professional status, or livelihood of the physician may be negatively impacted.

Case summary

A one-physician medical practice in California was a member of several provider networks, all of which were financially related. The network participation contracts provided that they could be terminated without cause.

The provider networks terminated the membership contacts during the months of May and June 2012, without giving any reasons or an opportunity to respond. After the medical practice sued the provider networks for wrongful termination, they offered to provide the practice with an “administrative fair procedure,” an offer which the medical practice declined. The provider networks moved to dismiss the lawsuit on the grounds that the medical practice had failed to exhaust the networks’ proffered administrative procedure. The trial court granted the motion to dismiss, and the medical practice appealed.

The California Court of Appeal rejected the provider networks’ argument, reversed the dismissal, and held that the wrongful termination lawsuit should have been allowed to proceed on the merits. However, the Court of Appeal also held that its decision would be unpublished. The medical practice sought a reconsideration of the decision not to publish the Court of Appeal decision, but that motion was denied.

AMA involvement

The AMA submitted a letter to the Court of Appeal, indicating that the decision allowing the wrongful termination suit to proceed on the merits was of significant importance to physicians and represented a potentially important precedent. The AMA letter urged that the motion of the medical practice to have the appeal published should be granted.

AMA letter to California Court of Appeal

 

Fairfield County Medical Association v. United HealthCare of New England (D. Conn.)

Also under Termination of physician participation in provider networks

Outcome:    Neutral

Issue

The issue in this case was whether United HealthCare of New England (United) could unilaterally amend its participation agreements to prohibit certain of its contracted physicians from serving patients covered under United’s Medicare Advantage Plan.

AMA interest

The AMA believes that, before termination from a participation contract, a physician should be given notice of the grounds for termination, have available a defined process for appeal, and be afforded an opportunity to remediate the grounds for the proposed termination.

Case summary

United notified several thousand physicians within its network that they would no longer be entitled to participate in its Medicare Advantage Plan. In response, two county medical associations in Connecticut sued to prevent the termination, claiming that United breached the physicians’ participation contracts. United challenged the district court’s jurisdiction.

The district court judge entered a preliminary injunction to prohibit the terminations. United appealed the injunction to the Second Circuit Court of Appeals.

On February 7, 2014, the Second Circuit affirmed the preliminary injunction in modified form. The modified injunction provided that those physicians who felt they were improperly terminated from the United HealthCare Medicare Advantage plans would have 30 days to file an arbitration proceeding to challenge the termination. After the 30 days, the preliminary injunction against United would expire.

On remand, the parties stipulated that the case will be voluntarily dismissed.

Litigation Center involvement

The Litigation Center filed an amicus brief in support of the county medical societies.

United States Court of Appeals for the Second Circuit brief

Foong v. Empire Blue Cross and Blue Shield, 762 N.Y.S.2d 348 (N.Y.S.Ct., App. Div. 2003)

Also under Termination of physician participation in provider networks

Outcome:   Very favorable

Issue

The primary issue in this case was whether, under New York law, a managed care organization could terminate one of its panel physicians without due process.

AMA interest

The AMA supports fairness in the relationship between managed care organizations and the physicians participating in their provider networks.

Case summary

Empire Blue and Dr. Foong disputed the propriety of certain of his medical practices, as well as the justification for his billings.  Dr. Foong submitted his records to the New York County Medical Society, whose Review Committee found that Dr. Foong “had demonstrated sound medical practice in each case.”  Empire Blue nevertheless terminated Dr. Foong, who then sued Empire Blue.  Empire Blue moved for dismissal of the complaint or, in the alternative, for summary judgment.

The trial court found that Dr. Foong had asserted a potentially valid claim and denied Empire Blue’s motion.  Empire Blue appealed.

The Appellate Division affirmed the trial court.  It held that, by New York statute, physicians are entitled to a due process hearing to contest a managed care plan deselection.

Litigation Center involvement

The Litigation Center, along with the Medical Society of the State of New York, filed an amicus curiae brief in support of Dr. Foong in the Appellate Division of New York Supreme Court.

New York Supreme Court Appellate Division brief

La Follette v. Marin General Hospital (Marin Cty., Cal. Super. Ct.)

Also under Medical staff

Outcome:   Favorable

Issue

The issue in this case was whether a hospital could restrict a physician’s medical staff privileges without granting that physician’s request for a formal peer review hearing on the restriction.

AMA interest

The AMA supports the right of medical staff members to have timely and fair peer review hearings.

Case summary

Dr. Lizellen La Follette was an obstetrician-gynecologist at Marin General Hospital.  The hospital summarily restricted her medical staff privileges, requiring her to undergo a six-month period of observation during which she was not allowed to deliver babies unless another physician was present.  Dr. La Follette believed that this restriction was unwarranted, and she requested a formal peer review hearing.  The six-month observation period passed, but the hospital, without explanation, failed to provide the hearing.  Meanwhile, Dr. La Follette’s record remained blemished, and she was required to report the disciplinary action on applications for medical staff privileges elsewhere.

Dr. La Follette sued the hospital for declaratory relief, an injunction to clear her name, and monetary damages.  The court awarded her the declaratory relief and the injunction, so the only remaining issue was her claim for emotional distress damages resulting from the hospital’s negligence.  The trial court held that Dr. La Follette could not pursue such a claim in the absence of other forms of monetary damage, and dismissed this element of her case.  Dr. La Follette decided not to appeal this issue.

Litigation Center involvement

The Litigation Center and the California Medical Association each awarded Dr. La Follette a financial grant to offset her legal expenses.

Mileikowsky v. Superior Court (Cal. App. 2001)

Also under Hospitals, Medical Staff, Peer review

Outcome:   Unfavorable

Issue

The issue in this case was whether a hospital was required to provide a timely peer review hearing before suspending a physician's medical staff privileges.

AMA interest

The AMA supports a timely and fair peer review process.

Case summary

This case alleged that a hospital, Encino Tarzana Regional Medical Center (ETRMC), abused the peer review process.  Dr. Mileikowsky, an obstetrician/gynecologist specializing in in-vitro fertilization at ETRMC, became embroiled in a number of disputes with ETRMC.  He testified against ETRMC and against several of the physicians on its staff in malpractice suits.  ETRMC attempted to deny or curtail his privileges, and Dr. Mileikowsky obtained two court injunctions against ETRMC.

Without prior notice, ETRMC abruptly informed Dr. Mileikowsky that it had summarily suspended his medical staff privileges.  After Dr. Mileikowsky requested a peer review hearing, ETRMC sent Dr. Mileikowsky a formal notice of charges, listing complaints against him that dated back 10 years.  ETRMC repeatedly postponed Dr.Mileikowsky’s hearing.  Thus, Dr. Mileikowsky’s medical staff privileges were summarily suspended without a hearing.  Dr. Mileikowsky applied to another hospital for medical staff privileges but was refused when that hospital learned of his suspension from ETRMC.

Under California law, a hospital may suspend a physician’s staff privileges without a hearing only if it finds that the physician presents an “imminent danger” to patient health or safety.  Even then, the hospital must hold a hearing within sixty days after receipt of the physician’s request.  The entire peer review process must be completed “within a reasonable time.”  ETRMC, by delay, avoided these obligations.

Dr. Mileikowsky sued the hospital in the Los Angeles County Superior Court and requested a preliminary injunction to restore his staff privileges.  The court denied the preliminary injunction, holding that, in light of the ongoing peer review proceeding, it lacked jurisdiction.  Dr. Mileikowsky appealed to the California Court of Appeal.  He requested a writ of mandamus, which would order the trial judge to adjudicate his request for a preliminary injunction. 

The Court of Appeal , in a two paragraph order, denied Dr. Mileikowsky’s appeal.  Although the hospital had not raised the point in its brief, the court held that Dr. Mileikowsky’s lawyer had not given the hospital proper notice of the motion for preliminary injunction.  Because of this procedural flaw, the trial court had, indeed, lacked jurisdiction.

Litigation Center involvement

The Litigation Center joined a brief prepared by the California Medical Association in support of Dr. Mileikowsky.  The CMA/Litigation Center brief emphasized Dr. Mileikowsky’s procedural rights and avoided taking sides in the ultimate factual dispute.  The brief pointed out that a fair peer review procedure requires that a physician’s staff privileges not be abridged without a hearing.  Summary suspension of those privileges should be allowed only if there is an emergency and then only if a hearing is held promptly to determine if the emergency is genuine.  The brief urged an expedited appeal.

Potivn v. Metropolitan Life Insurance Co., 997 P.2d 1153 (Cal. 2000)

Also under Economic credentialing and Termination of physician participation in provider networks

Outcome:   Very favorable

Issue

The issue in this case was whether a managed care organization could properly terminate  a physician’s participation in its physician-provider networks without cause, notwithstanding an “at will” termination provision in the provider contract.

AMA interest

The AMA supports fairness in the relationship between managed care organizations and the physicians participating in their provider networks.

Case summary

Dr. Potvin sued MetLife, alleging a violation of statutory and common-law rights to “fair procedure,” when it terminated him without cause from participation in its physician networks.  The trial court entered summary judgment against Dr. Potvin.  However, the California Court of Appeal reversed, holding that Dr. Potvin had a right under California common law to fair procedure, notwithstanding an “at-will” termination provision in the contract.

On May 8, 2000, by a 4-3 decision, the California Supreme Court affirmed the Court of Appeal.

Litigation Center involvement

The Litigation Center paid a portion of Dr. Potvin’s legal fees.  Additionally, the Litigation Center, along with the California Medical Association, filed an amicus curiae brief with the California Supreme Court to uphold the appellate court’s ruling.