Holland & Hart Healthcare Law Blog

Physician Recruitment Mutual Mistake

This is an extension to our previous post on Physician Recruitment Fraud (January 24, 2007).  There is more and more litigation surfacing between hospitals and recruited physicians when hospitals lure physicians into a new startup practice in their market and the physician is unable to sustain a viable practice in the new community.  The physician is forced to move on to earn a livelihood and the hospital for regulatory reasons feels it is obligated to enforce its contractual obligation with the physician for the repayment of the money if the physician leaves before the forgiveness period (typically 3 years). The physician did not sign on for serving in an Americorp or Peace corps lifestyle and raises a number of defenses including fraud in the inducement and mutual mistake.

Referral Threat Exposes Cardiology Practice To Inference Claim by Surgeon

In Carl Warren Adams, M.D. v. Rapid City Regional Hospital, Inc., Cardiology Associates, P.C. et al.,  Civ.-04-5067-RHB (D. S. D. 2007), the Plaintiff, a Cardiac Surgeon from Colorado, brought a an action against Rapid City Regional Hospital, Inc.("RCRH") alleging breach of contract of employment and related claims resulting from his prolonged negotiations  with the hospital. RCRH moved for summary judgment on all claims and the District Court granted the dismissal of all claims based on the lack of mutual assent of the parties to all the major terms of the agreement.  Dr. Adams also sued Cardiac Associates, P.C., and some of its officers and physicians asserting interference with his relationship with RCRH and defamation.  The court granted dismissal of the defamation claim on the basis that Dr. Adams would not be able to show the defamation from hospital proceedings because of the bar to his access to peer review information under South Dakota law.  The Court, however, did hold that Dr. Adams had made a sufficient showing to proceed against the cardiologists under a theory of wrongful interference with prospective economic advantage.