Henry Fenton and Dennis Lee recently achieved a favorable result for a client in a published opinion by the Second District Court of Appeal. The case pertained to quasi-legislative decisions made by hospitals and to Health and Safety Code Section 1278.5.
Fenton Law Group represented a group of infectious disease doctors, who sued the University of Southern California, Concord Hospitalist Group, and Elevate Health Group. The doctors, who were part of a panel of on-call physicians at USC’s Verdugo Hills Hospital, alleged that there was an illegal kickback and referral scheme, in which USC paid below-market rates for hospitalist services from Concord, and Concord self-referred patients to Elevate, which shared ownership with Concord.
The doctors alleged that they stopped receiving referrals when one of them complained to management at Verdugo Hills Hospital about the illegal scheme, and the on-call panel was dissolved as retaliation. The doctors’ causes of action included violations of Health and Safety Code section 1278.5, a health care whistleblower statute; Government Code section 12653, part of the California False Claims Act; and Business and Professions Code section 17200, et seq., the Unfair Competition Law.
USC demurred to the complaint, which the trial court sustained. Later, the Second District Court of Appeal found that the complaint alleged sufficient facts to support causes of action for violations of Health and Safety Code section 1278.5 and Business and Professions Code section 17200, et seq. As a result, the Second District Court of Appeal reversed the judgment of the trial court, in favor of Fenton Law Group’s client.
Defendants and Respondents University of Southern California, Keck School of Medicine of USC and USC Verdugo Hills Hospital were represented by Nelson Hardiman. Defendants and Respondents Concord Hospitalist Group and Elevate Health Group were represented by Hooper, Lundy & Bookman.