Blowing the Whistle on Bad Medicine

(or how I became a better registered nurse)

Presented on March 29, 1999, to the University of Texas-Tyler, Palestine Extension Campus, Registered Nurse Program.

Summary

The Texas Legislature has enacted legislation to protect health care workers from retaliation and discrimination for blowing the whistle on bad medical practices. In most instances the legislation not only protects the whistleblower, but imposes a professional duty upon the licensed health care professional to report unlawful or unethical conduct of other health care providers. The purpose of this paper is to improve the quality of health care in Texas by educating the nursing professionals of their rights and responsibilities under this legislative plan which has been expanded upon by our Texas Courts.

Introduction

The delivery of quality health care to patients requires that the registered nurse be free to report violations of law or ethical violations of other registered nurses and other health care professionals that compromise the delivery of service to the patient. In most instances the act of reporting the illegal or unethical conduct is required of the registered nurse. The registered nurse can "blow the whistle" on all health care professionals, including doctors and hospitals without fear of retaliation or termination with no legal recourse. Due to the mandatory reporting requirements of the statutes, the registered nurse is also protecting his or her education and credentialed career by reporting unlawful and unethical medical treatment. Given the astronomically large annual investment of American dollars into the medical care system, it is imperative to the delivery of quality health care that registered nurses be able to report unlawful or unethical medical practices with impunity.

Factual Background

Texas is what is known as an "at-will" employment state. This means that any employer may terminate any employee for any reason, except where a statutory or case law exception has been enacted to protect the employee from "at-will" termination. Historically, employees have been discriminated against or terminated for many reasons: on the job injuries, filing workers compensation claims, and reporting unlawful or unethical activity of employers.

Is there a financial incentive for health care employers to discriminate against their employees? The answer is unequivocally, YES. In our country with the vast array of benefits available to Americans, including major medical health insurance, health maintenance organizations, preferred provider organizations, Medicare, Medicaid, veterans entitlements, and provisions for indigent health care, medicine is a $1.2 trillion dollar a year industry. To put this number in perspective, the total medical expenses of Americans from our independence from England in 1776 through World War II was only a total of $80 million dollars. With the huge array of scientific and procedural advancements (organ transplants, heart by-passes, MRIs, CAT scans, lasers, fiber optic surgeries, etcetera), it is no wonder that so much is spent annually on American health care. Therefore, profound financial incentive exists for the discrimination against health care employees.

Is there a moral and ethical need for whistleblowers in the medical profession? Ralph Nader, the consumer activist, in January of 1993 published a report of 1,500 pages based upon an investigation that had taken place over three years of health care in American hospitals. Mr. Nader offered the shocking statement that over 300,000 Americans per year are killed in American hospitals. These are preventable deaths brought about by the negligent or gross negligent conduct of medical care providers (operations on wrong patients, administration of lethal doses of anesthesia or prescriptions resulting from a misplaced decimal or wrong procedures, etcetera). These numbers do not include cases of medical negligence that do not result in death that have severe and permanent consequences upon billions of Americans a year in our hospitals, treatment centers, nursing homes and clinics. To put this number in perspective, in the 10 years that America was at war in Vietnam, only 56,000 American soldiers were killed. That would be 5,600 persons per year in a war with people trying to kill each other compared to 300,000 persons a year being killed, instead of healed, in our hospitals. Therefore, YES, there is a moral and legal duty to report unlawful or unethical medical practices.

Whistleblower Statutes

The Texas Legislature finally recognized in 1983 that there was a public interest in the protection of employees that blow the whistle on unlawful conduct of employers - in this case, public employers with the enactment of the Texas Whistleblowers Act in 1983.

A. The Nurse Protection Act - Article 4525a V.A.T.S. (Attached as Appendix A)

Article 4525a was enacted in 1987. It has subsequently been amended to provide for more protection for registered nurses and damages (set out on Page 5) that are compatible with other statutes protecting health care employees.

Section 11(a) provides

"No person shall suspend, terminate, or otherwise discipline or discriminate against a person reporting, without malice, under this article. A person has a cause of action against an individual, organization, agency, facility, or other person that suspends or terminates the employment of the person or otherwise disciplines or discriminates against the person for reporting under this article."

The statute requires the registered nurse to report to the licensing board any other registered nurse that has exposed or is likely to expose a patient or other person unnecessarily to a risk of harm, or who has engaged in unprofessional conduct or has failed to adequately care for a patient or has failed to perform to the minimum standards of acceptable professional nursing practice, or any registered nurse whose practice is impaired by chemical dependency. Sec. 1.(a)

A person suing under the statute has the burden of proof, but it is presumed that if the suspension or termination takes place within 60 days of making the report, that the termination or suspension was for making the report.

Venue, or the location for the lawsuit in this statute, as in the other statutes protecting health care professionals is in the district court of the county where the plaintiff resides, or in which the plaintiff was employed by the defendant, or the county in which the defendant conducts business. This means that the plaintiff gets to choose the county for the lawsuit which is a significant benefit to the plaintiff.

Article 4525d is also attached as Appendix B which provides for protection for the registered nurse who refuses to engage in an act or omission relating to patient care that would constitute grounds for reporting the nurse under Article 4525a and incorporates the relief available and damages available under Article 4525a.

B. Section 161.132 of Texas Health & Safety Code (Attached as Appendix C)

Section 161.132(a) protects a person, including an employee, volunteer, or other person associated with a variety of health facilities that reasonably believes, or knows of information that a reasonable person would believe, that the physical or mental health or welfare of a patient, or client of the facility is, or will be, adversely affected by abuse or neglect caused by any person, who reports the information to the licensing or regulatory agency of the state.

Section 161.132(b) requires that the employee of the facility report other employees or other health care professionals associated with the facility that, have or will be, engaged in illegal, unprofessional, or unethical conduct to the agency that licensed the facility or to the state regulatory agency.

Section 161.132 (and Section 161.131 providing for definitions) are attached hereto as Appendix D.

Section 161.132 requires posting of notice of the statute and more importantly provides for immunity from civil or criminal liability for any person who, in good faith, is reporting under the statute. Failure to report is a Class A misdemeanor.

Section 161.134 of the Texas Health & Safety Code, attached as Appendix E, provides for relief from retaliation by the employing hospital or facility. Public policy of the state is to encourage reporting, and therefore retaliation for a report made to the employee's supervisor, or an administrator of the facility, or to a state regulatory agency, or a law enforcement agency of any violation, is protected. Reports to supervisors are discussed in a case below.

The hospital, mental health facility, or treatment facility is liable to the person discriminated against and may sue for injunctive relief and damages as hereinafter set forth.

Venue for a claim under 161.134 is in the county in which the plaintiff was employed by the defendant or in which the defendant conducts business. The rebuttable presumption of the suspension or termination within 60 days of the report is included in the statute.

Section 161.135, attached as Appendix F, prohibits retaliation against non-employees. This statute provides protection to patients or family members of employees that are retaliated against by the employing hospital or treatment facility for the report made by the employee.

Sections 161.131, 161.132, 161.134, and 161.135 were passed by the Legislature in 1993, after cases brought by employees for retaliation were being dismissed in court under the "at-will" doctrine.

C. The Texas Medical Practice Act.

Article 4495b regulates the conduct of physicians, doctors of osteopathy, podiatrists, and other professions licensed under this act. The Texas Medical Practice Act provides that any person, including partnerships, associations, corporations, or other entities may file a complaint against a licensee (doctor or physician) under Article 4495b with the Board.

Section 5.06 providing for reporting and confidentiality provides that:

"(q) (1), No person shall suspend, terminate, or otherwise discipline or discriminate against a person reporting to the board under this Act. A person has a cause of action against a health care entity or the owner or employee of such an entity that suspends or terminates the employment of the person or otherwise disciplines or discriminates against the person for reporting to the board..."

The person may recover damages as hereinafter set forth.

Venue for this action is in the district court of the county in which the plaintiff resides, in which the plaintiff was employed by the defendant, or in which the defendant conducts business. The burden of proof is upon the plaintiffs, but if the person's employment was suspended or terminated for the report within 90 days, it is presumed that the termination was a result of the report. This is a rebuttable presumption.

D. Section 242.133, Texas Health & Safety Code. (Attached as Appendix G)

Chapter 242 of the Texas Health & Safety Code regulates convalescent and nursing homes and related institutes.

Section 242.133(a) provides:

"A person has a cause of action against an institution, or the owner or employee of the institution, that suspends or terminates the employment of the person or otherwise disciplines or discriminates or retaliates against a person for making a report or complaint under this chapter to the department or a law enforcement agency, or for reporting abuse or neglect or other complaint to the person's supervisors, or for initiating or cooperating in any investigation or proceeding of a governmental entity relating to care, services, or conditions at the institution."

Section 242.133 provides for the rebuttable presumption of the retaliation if the report is made within 60 days of the termination.

Venue for a suit under this section is in the district court in the county in which the plaintiff resides, where the plaintiff was employed by the defendant, or where the defendant conducts business.

Note that this statute has a "mini" statute of limitation requiring that suit be brought within 90 days of the date the person's employment was suspended or terminated or notify the Texas Workforce Commission (TWC) of the plaintiff's intent to bring suit under this statute. If notice is given to the TWC, then suit must be brought within 90 days after notice to the Commission.

The statute of limitations only applies if the employer requires the employee to sign a statement required under Section 242.122 that the employee understands his rights under Section 242.133. Otherwise, the plaintiff may bring the action no later than 2 years after the date his or her employment is suspended or terminated.

Therefore, it is incumbent upon the employee to advise whether he or she has signed the statement provided for by Section 242.122 and take immediate action after suspension or termination to initiate suit.

Damages

The foregoing statutes have a common plan for relief and damages to the aggrieved employee.

The statutes provide for

(1) The greater of plaintiff's actual damages or $1,000 dollars. Most importantly, these statutes provide that damages include money awarded for mental anguish, even though no other injury is shown.

(2) Exemplary damages are recoverable. The plaintiff should expect that the defendants will plead the limitations on the award of exemplary damages set forth in Section 41.008 of the Texas Civil Practice and Remedies Code, limiting exemplary damages to the greater of: (1) two times the amount of economic damages plus an amount equal to any non-economic damages found by the jury not to exceed $750,000 dollars, or (2) $200,000 dollars. The entitlement to exemplary damages makes the cause of action worth pursuing.

(3) Costs of Court, and

(4) Reasonable Attorney's Fees.

In addition to the foregoing damages, a person whose employment is suspended or terminated in violation of these sections is entitled to (1) reinstatement to the employee's former position or severance pay in an amount equal to three months of the employee's most current salary and (2) compensation for wages lost during the period of suspension or termination.

Other Whistleblowing Statutes

A. Some hospitals are county owned or may be taxing entities operating as a hospital district. Public employees are protected under chapter 554 of the Texas Government Code for reports of violations of law made in good faith to appropriate law enforcement authorities. The definition of a "violation of law" to "appropriate law enforcement authorities" is liberally construed. However, given the profound impact this statute had on public employers, including the State of Texas, the statute was amended in 1995 placing restrictive caps on damages recoverable by a public employee and eliminated exemplary damages altogether.

B. Frequently a hospital will maintain hazardous chemicals on site, such as benzene for use in sterilization units. Section 502.017 of the Texas Health & Safety Code provides that "an employer may not discharge, cause to be discharged, otherwise discipline, or in any manner discriminate against an employee because the employee has..." filed a complaint under Chapter 502.

C. Section 411.082 of the Texas Labor Code provides that "an employer may not suspend or terminate the employment of or otherwise discriminate against an employee for using the telephone service to report in good faith an alleged violation of an occupational health or safety law."

D. Given the possibility of exposure to hazardous chemicals or other injuries in the workplace, a related statute, Section 451.001 of the Texas Labor Code provides that an employee may not be discriminated against because he, in good faith, filed a worker's compensation claim. This section only applies to employers that subscribe or adhere to the schedule of benefits provided under Texas workers compensation laws. Non-subscribers are not liable under Section 451.001.

E. The Federal Whistleblower Protection Act of 1989, 5 U.S.C. Section 1221(a), provides relief for federal employees and for reports of conduct that is in violation of federal law. Some nurses may find themselves working for federal agencies: Veterans Administration, Medicare, Medicaid, or the Social Security Administration.

F. The False Claims Act, 31 U.S.C. Sections 3729 - 3733 provides a unique recovery tool for plaintiffs in the form of qui tam actions. The statute provides for a recovery by a private citizen for proof of fraud committed against the federal government. The plaintiff in the action is entitled to receive 10 percent of the recovery by the federal government. Recently a case in federal court in Dallas resulted in a $10 million dollar settlement in favor of the federal government with $1 million dollars recovered by the plaintiff. The suit involved Medicare fraud and was brought in 1996 by Jennifer Thomas against HomeCare Concepts of America, Inc., and Infusion Management Systems, Inc. Ms. Thomas worked for the defendant for 4 weeks before she was fired.

Case Law

1. A very narrow exception to the at-will employment doctrine was set forth by the Texas Supreme Court in 1985 in Sabine Pilot Service, Inc. v. Hauck, 687 SW2d 733. The case provides relief for an employee who is discharged "for the sole reason that the employee refused to perform an illegal act." The conservative Texas Supreme Court has steadfastly refused to expand this holding to cover private employees who are discharged for reporting illegal activities. Two courts of appeals have recently held that the Sabine Pilot does not apply where an employee has been terminated because of a good faith inquiry into the legality of an act. (These are non-nursing cases) In another case, the Sabine Pilotexception was refused to an employee who was discharged for refusing to perform an act that would result in civil, not criminal, liability. Sabine Pilot is cited in the following opinion.

2. Austin v. Healthtrust, Inc., 967 S.W.2d 400 (Tex. 1998). In Austin, a nurse in July of 1992 noticed another emergency room nurse to be under the influence of drugs and reported the information to her supervisor. In December of 1992, Austin was fired (after finding out that the nurse that had been reported was a close personal friend of her supervisor.) The Court listed several state statutes that protect employees, including the Nurse Practice Act, 4525a that would have protected the plaintiff had she reported her co-worker to the board of nurse examiners. Regretfully, since the protection of Chapter 161 of the Health & Safety Code protecting reports of unprofessional or unethical conduct was not effective until September 1, 1993, it was not available to protect Austin.

3. Clark v. Texas Home Health, Inc., 971 S.W.2d 435 (Tex. 1998). The plaintiffs (three registered nurses) in April of 1992 reported a licensed vocational nurse employed by the defendants that caused a medication error that resulted in a patient's death. The plaintiffs filed a report with their employers. They were asked to "hold up" on the report and were offered severance money in the event that their credentials were revoked for not reporting the LVN to the Texas Board of Vocational Nurse Examiners. The plaintiffs told their supervisor and their employer that they intended to file the complaint with the proper authorities and they were fired before they could file their written report. Being registered nurses, they filed their suit under the Nurse Protection Act, Article 4525a. In the typical "hard-ball" response, the defendants filed a separate lawsuit against the nurses alleging libel and slander and business disparagement. Note: Don't tell me there is not big money in American hospital care! The employer also removed them from the peer review committee investigating the incident and relieved them of their administrative duties. The nurses resigned. The Texas Supreme Court disagreed with the Court of Appeals' conclusion that the nurses were not protected, solely because their signed written report was not filed before the retaliation. The Supreme Court concluded that it could not "fault the nurses for attempting to work with their employer before making the formal report." The Court reasoned that it "should not discourage an employee from informing an employer that a nurse poses a potential threat to patients" and that "the protection provided for those who make a report to the Board does not turn on which party can act faster." Again, had the plaintiffs not been registered nurses, they would have been without a remedy, because protection of other health care employees was not enacted by the legislature and effective until September 1, 1993.

Conclusion

There is a huge financial motive for multi-billion dollar hospital corporations to retaliate against its employees for reporting unlawful and unethical medical conduct. There is a demonstrative need and a public policy that is advanced by protecting employees that report dangers in the hospital to the proper authorities.

I hope this paper will provide the incentive and the information necessary to help you become better registered nurses.

Respectfully submitted,

CHARLES W. NICHOLS

Attorney at Law

March 29, 1999