AUSTIN (CN) - A surgical professor who lost his faculty chair positions after highlighting the lack of supervision of trauma residents cannot sue, the Texas Supreme Court ruled.
Dr. Larry Gentilello, a public employee, could not sue under the Texas Whistleblower Act for retaliation because his supervisor does not qualify as "an appropriate law enforcement authority under the act," according to the ruling.
The Thursday decision reverses the judgment of the Dallas-based Fifth District of the Texas Court of Appeals.
Gentilello had claimed he was demoted after he told his supervisor, Dr. Robert Rege, about lax supervision of trauma residents at Parkland Hospital in Dallas, which is served by the University of Texas Southwestern Medical Center.
He allegedly complained that trauma residents were treating and operating on patients without the supervision of an attending physician, which is a violation of Medicare and Medicaid requirements and procedures, according to the complaint filed in 2007.
An appropriate authority under the act is defined as someone the employee "in good faith believes" can "regulate under or enforce" the law allegedly violated or "investigate or prosecute a violation of criminal law," the 16-page opinion states.
"We hold, consistent with our prior cases, that the act's constricted definition of a law-enforcement authority requires that a plaintiff's belief be objectively reasonable," Justice Don Willett wrote for the court. "Other states' whistleblower laws accommodate internal reports to supervisors; Texas law does not."
"Under our act, the jurisdictional evidence must show more than a supervisor charged with internal compliance or anti-retaliation language in a policy manual urging employees to report violations internally," he added. "For a plaintiff to satisfy the act's good-faith belief provision, the plaintiff must reasonably believe the reported-to authority possesses what the statute requires: the power to (1) regulate under or enforce the laws purportedly violated, or (2) investigate or prosecute suspected criminal wrongdoing."
Given his training and expertise, Gentilello should have known his supervisor's purely internal authority was not law enforcement but law compliance, the opinion states.
"In other words, Rege was only capable of ensuring that UTSW followed federal directives," Willett wrote. "The bare power to urge compliance or purge noncompliance does not transform Rege into an 'appropriate law enforcement authority' as defined in the act. The term has a specific, legislatively prescribed meaning, and under ourrecent precedents ... Gentilello simply could not have formed an objectively reasonable belief that Rege possessed any of the special 'law enforcement' powers."
Entities capable of disciplining employees only internally are likewise not appropriate law-enforcement authorities, according to the ruling.
"UTSW's Clinical Department Chair is not a police officer or prosecutor," Willett wrote. "And conducting private oversight and discipline is not official action taken to combat violations of public law. The Medicare/Medicaid laws do not endow medical-school faculty supervisors or hospital department chairs with any special regulatory, enforcement, investigative or prosecutorial authority."
"It was reasonable for Gentilello to raise concerns about improper billing or patient-care practices with Rege, but it is objectively unreasonable for Gentilello, given his experience, expertise and training, to equate his supervisor with an 'appropriate law enforcement authority," he added.
In September 2011, UTSW agreed to pay $1.4 million to settle claims that it falsely claimed that teaching physicians had properly supervised Parkland surgical residents, ultimately defrauding Medicare and Medicaid.
"Medicare should get what it pays for," Special Agent Mike Fields had said in a statement at the time, speaking on behalf of his Dallas office of the U.S. Department of Health and Human Services Office of Inspector General. "If you submit a claim for supervising a resident you should actually be present supervising that resident, particularly when that resident is performing surgery."
Prosecutors said the hospitals fraudulently "upcoded" Medicare and Medicaid claims for teaching-physician-related items and services between 2004 and 2007. In some cases, there was allegedly no documentation that physicians were present for the critical portion of the resident's surgical care.
The hospital's president, Dr. Daniel Podolsky, said at the time that the settlement reflects a desire "to avoid ongoing litigation expenses and prevent further distraction from our mission."
A $1.4 million deal "represents a small fraction of the projected legal expense and consumption of internal time and resources if we continued to argue this matter," Podolsky said in a statement.
Gentilello was eligble to receive up to 25 percent of that recovery.
Prosecutors say the defendants cooperated with the investigation, and did not admit any wrongdoing or liability.