It’s important for hospital case managers to consider possible legal violations when it comes to offering choices for post-acute care. After all, there is the complicated matter of antitrust laws related to patients’ right to freedom of choice to consider very carefully.

Elizabeth Hogue, Esq., a healthcare attorney based in Washington, DC, cautions that hospitals now face increasing pressure to honor patients’ right to freedom of choice of providers from both competitors and physicians.

In fact, she highlights a recent lawsuit filed by a urologist against a large healthcare system in Boston. Hogue says the lawsuit was the result of doctors feeling “immense personal and financial pressure” to refer patients only to their own hospitals and specialists in order to increase profits.

Specifically, a doctor claims in his lawsuit that hospital representatives allegedly called patients and said they had to schedule their surgeries at their facility, even though the doctor had initially recommended another hospital.

The 35-page lawsuit also says hospital representatives would cancel appointments made by the doctor’s office staff for patients of his practice at competing hospitals.

In response, the hospital’s representatives said that their actions were justified based on concerns about quality of care. In terms of quality, hospitals and physician networks argue that doctors generally don’t have access to other systems’ electronic medical records, which makes it harder to coordinate care.

The doctor notes in his lawsuit that he has a contractual right to refer outside of the healthcare system if patients request it or if doing so is in their best interests.

While the hospital argued that policies discouraging referrals outside its system are legal and “extremely common,” the judge said that defense is like a child telling a parent, “All the other kids do it.”

Compromised Care

Other lawsuit details include the following:

• A different doctor who was deposed in the case said the hospital rejects referrals to other providers regardless of patients’ preferences and publicly shamed physicians who refused to comply with these restrictions. For example, during monthly group meetings, executives projected physicians’ names on a screen along with the number of their patients who had gone outside the system for care.

• Approximately 20% of physicians’ pay was withheld and pay out of these amounts was tied to certain quality goals, including keeping patients with the healthcare system. Generally speaking, the practice of withholding compensation “isn’t necessarily unethical or illegal,” says Hogue.

• Another physician testified that she ended her affiliation with the hospital due in part to its policies surrounding patients’ right to freedom of choice. The physician testified that she was asked to call an elderly patient to persuade him to cancel his heart surgery at a large teaching hospital in Boston a couple of days before the operation and move the operation back to their hospital instead. When she refused, a hospital administrator contacted the patient and moved the surgery back to their facility.

Refusal to Dismiss

Since the judge refused to dismiss the lawsuit (the case is pending in Suffolk Superior Court), now is a good time to consider the ripple effects for hospitals nationwide when it comes to honoring patients’ right to freedom of choice. Hogue says hospital nurse case managers should clarify how they carry out discharge planning.

Because patients have the right to freedom of choice of providers, hospital case managers have the following legal and ethical obligations:

• Honor patient preferences for providers. All patients have a common law right, based on court decisions, to control the care provided to them, including who renders it. This includes Medicare beneficiaries and Medicaid recipients, per federal statutes.

• Develop a list of Medicare-certified home health agencies in geographic areas where patients reside (per the Balanced Budget Act of 1997).

• Disclose on the list any financial relationships or special interests with home health services.

• Use a neutral tone when presenting lists to patients, to not say anything negative about other healthcare facilities, and finally, to not persuade patients away from making their own choices.