$26M Judgment Against EmCare in Wrongful Termination Lawsuit

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Hospitals or companies that sacrifice patient safety for corporate profits may be liable for substantial damages.

In Brovont v. KS-I Medical Services (an EmCare subsidiary), an emergency physician filed a lawsuit against EmCare for wrongful termination. The physician was fired for complaining about alleged patient safety issues. A jury awarded the physician $29 million in compensatory and punitive damages. That award was reduced by the trial court, but then partially reinstated to $24 million by the Kansas Court of Appeals. The Missouri Supreme Court recently declined EmCare’s request to review the case, finalizing the award in the plaintiff’s favor.


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Background

EmCare is a subsidiary of Envision Healthcare, which is owned by venture capital group KKR. According to the appellate court opinion, EmCare creates different legal entities for each state and/or location it provides emergency medical services so that it can comply with laws prohibiting for-profit corporations or publicly traded companies from owning physician practice groups. EmCare then assigns a physician “owner” to these legal entities that manage many day-to-day operations and staffing issues.

In this case, EmCare contracted with HCA’s Overland Park Hospital (near the Kansas/Missouri border) to provide emergency medical services. The plaintiff in the case signed contracts with EmCare subsidiaries in both Kansas and Missouri and was hired as the ED medical director at HCA Overland Park Hospital in Kansas.

The issue in the subsequent lawsuit involved emergency physicians being required to respond to “code blue” calls, which frequently occurred in Overland’s 343 bed hospital. Because the ED was single coverage for 18 of 24 hours, when emergency physicians responded to a code in the hospital, there was no physician available for emergencies in the emergency department.


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As the emergency department director, the plaintiff raised concerns with EmCare and HCA that leaving the ED uncovered violated EMTALA by delaying medical screening exams. Additionally, this violated American College of Surgery guidelines requiring Level II trauma centers always have a physician in the emergency department. Because of these regulatory violations and the inherent patient safety concerns, the plaintiff sought to either increase ED staffing or to cease the practice of ED physicians responding to hospital codes.

EmCare’s regional director e-mailed the ED physicians stating that the staffing decisions were “financially motivated” and that those decisions were “in everyone’s best interest.”

In response, the plaintiff wrote a letter on behalf of all 22 ED physicians formally stating their concerns with the patient safety issues arising from HCA’s policies and EmCare’s staffing decisions. He was chastised by EmCare’s regional director for “putting that in writing” and was subsequently removed from his position as ED medical director.

Overland Park’s CEO also demanded that the plaintiff be taken off the schedule at the hospital because he “wasn’t being supportive” of hospital changes and was being “oppositional.” EmCare initially arranged for the plaintiff to work at other facilities in Missouri, but when the plaintiff wrote to the hospital to complain that his termination was in retaliation for his complaints about EmCare policies, EmCare refused to allow the plaintiff to work at any EmCare-contracted facility in either Kansas or Missouri.


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After the plaintiff’s termination, the ED environment at Overland Park Hospital became a “weird cult of coercion” where it was allegedly made clear that if a doctor complained, he or she would not be allowed to work at any EmCare-contracted hospital in Kansas or Missouri, potentially requiring the physician to move his or her family to find future employment, per the lawsuit.

The facts in this review were taken from the Missouri Court of Appeals opinion which can be downloaded from this link: http://u.pc.cd/BO

Trial

The plaintiff filed a lawsuit for wrongful termination against EmCare’s Kansas and Missouri subsidiaries, alleging that he was terminated because he complained about dangerous and illegal understaffing at the Overland Park emergency department. A jury awarded him $2,817,045 in economic damages, and $6 million in non-economic damages. The jury also awarded $10 million in punitive damages against each EmCare subsidiary for a total award of nearly $29 million.

The trial judge then reduced the $6 million award to $300,000 and reduced the punitive damage awards to $5 million for each subsidiary.

Appeal

Both parties appealed the judgment.

Regarding the amount of judgment, the trial court reduced the $6 million noneconomic damages award because of a statutory cap on non-economic damages in Kansas. In a separate decision handed down after the judgment, the Kansas Supreme Court invalidated non-economic damage caps, so they were reinstated.

The $10 million punitive damages award against EmCare’s Missouri subsidiary was also reinstated since the trial court incorrectly applied Kansas law to a Missouri company. In reinstating the punitive damage award, the Missouri Court of Appeals stated that Missouri’s interest in punishing and deterring Missouri companies from wrongfully discharging their employees for whistleblowing would be “impaired if Kansas law were applied.”

In its appeal, EmCare offered multiple arguments as to why the judgment should have been overturned or reduced.

First, EmCare argued that the jury should never have been able to decide upon the plaintiff’s wrongful discharge claim because the plaintiff didn’t show how allegedly unsafe ED physician staffing violated any public policy. The reasoning behind this argument is that many emergency medicine contracts are either explicitly or implicitly “at will,” meaning that the employee or contractor can be terminated for any reason or no reason at all at the “will” of the employer.

However, Missouri law states that at-will employees and contractors may not be terminated if they refuse to violate the law, if they refuse to violate any “clear mandate of public policy” or if they report wrongdoing or violations of law to superiors or public authorities. Even though at-will employment applied to this case, termination of the plaintiff under any of these prohibited circumstances would violate Missouri law and could subject EmCare to a lawsuit for wrongful discharge.

During sworn testimony, EmCare’s regional director testified that the plaintiff was fired because of “unprofessional behavior and the way he communicated things” including “inaccurate statements regarding safety.” EmCare called the plaintiff’s allegations of unsafe staffing a “subjective belief” rather than a violation of any “well established and clearly mandated public policy.” The Appellate Court noted testimony from the plaintiff’s expert regarding federal regulations requiring that Level II trauma centers always have a physician in the ED to evaluate and treat critical care and trauma patients.

The Appellate Court also highlighted the plaintiff’s testimony that requiring ED physicians to respond to codes outside of the ER violated EMTALA by preventing the physicians from providing timely medical screening examinations. Based on this testimony, the Appellate Court held that the plaintiff had established a “whistleblower exception” to the at-will employment doctrine and that EmCare could be liable for wrongfully discharging the plaintiff.

EmCare also argued that because the plaintiff never complained of any public policy actions occurring in Missouri and that EmCare’s Missouri subsidiary cannot be held liable for firing him. The Appellate Court ruled that the plaintiff’s complaint about the Overland Park code blue policy not only caused him to be fired in the Kansas hospital, but also resulted in termination of his employment by EmCare’s Missouri subsidiary. Therefore, EmCare was liable for damages in both states.

EmCare also alleged that there was insufficient evidence of “evil motive” or “reckless indifference” in its actions to justify such large punitive damage awards. The Appellate Court flatly rejected this argument, detailing evidence showing how EmCare admitted that its staffing decisions were “financially motivated,” how EmCare terminated the plaintiff for “refusing to stay silent when patient safety was significantly at risk,” how the plaintiff’s termination had a “desired chilling effect” on other physicians speaking out about patient safety issues, and how EmCare’s termination of the plaintiff amounted to “retaliation … for financial benefit.”

On March 2, 2021, the Missouri Supreme Court declined to intervene in the case, finalizing the judgment in the plaintiff’s favor. With interest, the judgment totals nearly $26 million.

Takeaways

 

  • At-will contracts are common in emergency medicine. While a contract may not specifically state that it is “at will,” state law may automatically apply at-will status to the agreement. In addition, terms that allow a contract to be terminated “at the request of hospital administration” or for “events that negatively affect [the group’s] reputation in any way” effectively create an at-will agreement regardless of state law protections. It is unlikely that staffing companies or hospitals will remove such provisions. Protect yourself from at-will terminations by always being on staff at more than one facility and always working with more than one group/staffing company.
  • Not every state has protections against at-will contracts based on public policy issues or whistleblower complaints. Don’t assume that similar results would occur with a similar complaint in a different state. Consult an employment attorney in your state if you are having issues with your employer or contracting facility.
  • While this case only provides legal precedent in Missouri, it does provide persuasive authority that can be presented to other state courts in similar cases.
  • The underlying accusations in this case, if true, show how large corporations (especially those run by venture capital companies) can exert significant influence over physicians’ actions – potentially to the detriment of patient safety. The integrity of our profession depends upon physicians working for the best interests of our patients. Kudos to this doctor for standing up for his patients and for the doctors he supervised.
  • The large punitive damage awards in this case demonstrate that – even in the absence of an alleged patient injury – juries will not tolerate sacrificing patient safety to increase corporate profits.

ABOUT THE AUTHOR

SENIOR EDITOR DR. SULLIVAN, an emergency physician and clinical assistant professor at Midwestern University in Illinois, is EPM’s resident legal expert. As a health law attorney, Dr. Sullivan represents medical providers and has published many articles on legal issues in medicine. He is a past president of the Illinois College of Emergency Physicians and a past chair and current member of the American College of Emergency Physicians’ Medical Legal Committee. He can be reached at his legal web site http://sullivanlegal.us.

11 Comments

  1. I am happy the courts upheld in favor of the physician. It is time the giant staffing companies realize they cannot bully doctors in the name of profits and then hide their intentions.

  2. Robert M. McNamara, MD on

    Yet EmCare/Envision is welcome at the meetings and as sponsors of our major EM PHYSICIAN professional society. The sham structure set up is to skirt the prohibitions on the Corporate Practice of Medicine. Drs. Byrne and McHugh are aiding and abetting the illegal CPOM. They should be reported to the state board of medicine to investigate this arrangement.

    “Gregory Byrne, M.D., a Dallas-based physician employed by EmCare, is the sole owner of KS-I. At any given period of time he also owns between 275 and 300 other EmCare subsidiaries in at least 20 different states. The exact number of EmCare subsidiaries he owns changes every month, and he does not keep track of them or take any management role in any of them. The number does not matter to him because all the profits of the subsidiaries flow to EmCare. The owners of the subsidiaries are simply paid a salary by EmCare. The payroll, human resources, legal, physician recruiting, and operation of each subsidiary was controlled by EmCare, and they would forward operational documents for the physician “owner” of the subsidiary to sign.”

  3. Celia Entwistle MD on

    Did Doctor Sullivan represent the plaintiff?
    What an excellent article with an outstanding outcome. I love to see a bully taken down.

  4. Nigel M. Fontenot on

    Finally a state court decided on the side of a physician expressing concerns of patient care and safety compromise by corporate or hospital administrative decisions. This case really opens the door for physicians to finally chip away at the dictatorial methods of those involved with medicine solely for the money generated by the individual physicians. At the very least, courts should prevent punitive measures which are mostly aimed at prevention of a physician to be a physician handed out daily to physicians in the US from corporate entities whose sole income is from the reimbursement of medical care (by physicians) and patient care issues (which should be decided by physicians). Courts should have a heavy hand when those care issues are compromised by corporations and hospitals whose foremost motivation is profit.

  5. Envision earns approximately $12.5 million per day… until they break these conglomerates up, this will continue.

  6. Thomas Kelly on

    This judgement is deserving of
    Envision.. Too bad HCA didn’t get sue with Envision. Both are money hungry corporate greed over patient care.

  7. I recently worked with a Midlevel in Florida who was just “terminated without cause” by Envision after she reported against the ER Nursing Director for covering up some illegal/inappropriate activity.
    She is a mother of three young boys who is now black listed and can’t even get an interview due to the same corporation Ascension owning all of the hospitals on the panhandle. Does Anyone know who represented Dr. Brovont?

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