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Seven Things To Know When You Receive A Notice Of Investigation From The Department Of Health

Doctor’s Defamation Suit Okayed for Termination by University over Use of Resident Physicians

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law and Hartley Brooks, Law Clerk, The Health Law Firm

On July 11, 2023, the United States District Court for the Eastern District of Kentucky allowed a doctor to move forward with one of his defamation claims against the university’s provost for allegations made to support his termination.

A medical doctor and oral surgeon at the University of Kentucky (UK) sued the university and university officials on multiple grounds, including making a claim of defamation against the university’s provost. The defamation claim stems from the Statement of Charges made by the provost in the physician’s termination proceedings.

The Statement of Charges claims that the doctor stole from UK, took credit for patient care services that a resident performed, caused the College of Dentistry to submit false claims to the federal government, and encouraged a colleague to falsify medical records.

The court granted summary judgment on three of the counts but denied summary judgment on the claim that the doctor stole from the university.

University of Kentucky Policy.

UK employed the doctor from 2001 to 2019. Before 2017, UK policy approved by its Dental Care Board required its staff to designate the faculty member as the treatment provider on billing documents when a resident helped the faculty member with treatment and documented the care. During 2017, billing practices changed, and employees began designating residents as the treatment providers whenever the residents documented a patient’s care.

When the faculty member was designated as the treatment provider, the faculty member would be entitled to 40 percent of the fees paid.

University of Kentucky’s Investigation.

From April 2017 to July 2018, UK documents designated a resident as the treatment provider for 89 patients that the plaintiff doctor alleges he treated. The doctor, believing he was entitled to income for this care, reviewed the files and removed any reference to a resident from the patient notes, or so it is alleged in the pleadings.

The altered documents triggered an internal investigation. The university interviewed seven residents whose notes had been changed by the doctor. The residents confirmed that patient clinical care occurred in two ways:  1)  they would treat the patient and present their findings to the doctor and he would then reevaluate the patient or 2)  the resident and doctor would treat the patient simultaneously.

Since none of the 89 patients left without seeing the plaintiff doctor, he alleges that he was entitled to the income for their care.

The investigation confirmed that there were no patient care issues. The issues were purely with the documentation of the patient care. The medical records do not reflect the services performed because the documents do not mention a resident providing care. The report alleges that the doctor removed all references to residents in the documentation solely to obtain compensation for these visits.

The university’s provost decided that the university needed to discipline the doctor for altering the medical records, most probably a prudent decision.

Disciplinary Actions.

The provost informed the doctor in January 2019 that university termination proceedings would begin.  However, he did not follow the correct termination procedures, it is alleged. The provost decided to investigate further while suspending the doctor from clinical care pending the investigation’s outcome.

After this, the provost filed a Statement of Charges against the doctor, which began the administrative process to terminate tenured faculty. In the Statement of Charges, the provost claimed the doctor stole from the University of Kentucky, falsified medical records by claiming he provided services that a resident provided, caused the university to submit false claims to Medicare and Medicaid, and encouraged a colleague to behave in the same manner.

The doctor resigned and sued the university and university officials on multiple grounds, including the defamation claim against the provost for his four statements in the Statement of Charges.

Legal Proceedings.

The provost filed a motion for summary judgment for qualified privilege. Qualified privilege protects a speaker where the communication is one in which the party has an interest, and it is made to another interested party.

In an employment context, qualified privilege applies to internal discussions and communications necessary to a company’s proper function and law enforcement. This protection will apply despite a statement’s falsity if the public interest in detecting wrongdoing outweighs the private interest for defamation if the suspicions are made in good faith.

Privilege can be overcome by showing both actual malice and falsity in making a statement. It is the burden of the plaintiff to defeat the assertion of qualified privilege. So, in this case, the doctor has to show that the provost’s four statements are false and were made maliciously.

In the present proceeding, the judge is not deciding if the statements are defamatory. The judge is only deciding if a jury could find the statements defamatory and whether to grant summary judgment in favor of UK.

The judge granted summary judgment in favor of the UK provost on three of the allegedly defamatory statements:  1) That the doctor falsified medical records, 2)  That the doctor caused the university to submit false claims to the federal government, and 3) that the doctor influenced another faculty member to do the same.

Federal courts grant summary judgment if the moving party shows that there is no genuine dispute as to a material fact. If there is no dispute between the parties, then the moving party is entitled to judgment.  The judge found no disagreement with the statement that the doctor falsified medical records.

For the statement that the doctor caused the college to submit false claims to the government, the doctor could not overcome the qualified privilege that the provost had as a matter of law. The doctor failed to show that the provost knew or should have known that the allegation was false or that the provost spoke maliciously.  Therefore, the qualified privilege stood and theat claim was dismissed.

The doctor also failed to show that the provost’s statement that the doctor influenced a colleague was false. Therefore, the doctor was unable to defeat the qualified privilege for that statement, as well.

The judge decided that the plaintiff doctor introduced sufficient evidence for a jury to decide whether he could defeat qualified privilege as to the claim that he stole from the University of Kentucky.  This evidence included the testimony of four other UK dentists stating that the doctor should have been designated as the treatment provider, not the residents. This means that it could be argued that the funds were actually earned by the plaintiff doctor and not stolen by him.

Evidence was also introduced tending to show that the provost recklessly disregarded the possibility that the statement was false. There was no evidence that the doctor failed to participate in caring for the patients at issue. All evidence showed that he did treat the patients with a resident. Because of this, the jury could conclude that he was entitled to the compensation and, therefore, did not steal it.

The judge denied summary judgment for the UK provost regarding the statement that the doctor stole from the University of Kentucky.  However, summary judgment was granted in favor of the UK provost on the other three defamation claims dismissing them.

Click here to read the Memorandum Opinion and Order on our website

Contact Health Law Attorneys Experienced in Representing Health Care Professionals and Providers.

At the Health Law Firm we represent dentists and oral surgeons, resident physicians and fellows, and other health professionals. We represent them in legal disputes and disciplinary cases against their universities and residency programs, in investigations and complaints against their licenses, in clinical privileges matters and peer review hearings, in administrative hearings and in complex litigation.  We litigate cases in state and federal courts and in administrative forums.  We have a great deal of experience in representing physicians against universities, medical schools, and graduate medical education programs. The lawyers of The Health Law Firm are experienced in both formal and informal administrative hearings and in representing physicians in investigations complaints before the board of dentistry and board of medicine.

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Cunningham v. Blackwell, CIVIL 3:20-cv-00008-GFVT-EBA (E.D. Ky. Jul. 11, 2023)
“U.S. Court in Kentucky Allows Physicians Defamation Claim to go Forward in Termination Dispute.” American Health Law Association Health Law Weekly. (21 July 2023).

About the Authors: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law; he is the President and Managing Partner of The Health Law Firm, which has a national practice.

Hartley Brooks is a law clerk with the health law firm. Its main office is in Orlando, Florida, area. The Health Law Firm, 1101 Douglas Avenue, Suite 1000, Altamonte Springs, FL 32714, Phone: (407) 331-6620 or Toll-Free: (888) 331-6620.

Current Open Positions with The Health Law Firm. The Health Law Firm always seeks qualified individuals interested in health law. Its main office is in the Orlando, Florida, area. If you are a current member of The Florida Bar or a qualified professional who is interested, please forward a cover letter and resume to: [email protected] or fax them to (407) 331-3030.

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