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Doe v. The Johns Hopkins Health System Corp.

United States District Court, D. Maryland

April 6, 2017

JANE DOE, Plaintiff,
v.
THE JOHNS HOPKINS HEALTH SYSTEM CORPORATION and SUBURBAN HOSPITAL, INC., Defendants.

          MEMORANDUM OPINION

          THEODORE D. CHUANG, United States District Judge

         Plaintiff Jane Doe, a licensed psychologist, was recruited by Defendant Suburban Hospital, Inc. ("Suburban") to address a number of possible ethical and regulatory issues at Suburban and improve compliance with internal policies and applicable law. She now alleges that after she reported numerous possible violations and conflicts of interest, Suburban fired her and spread damaging rumors about her fitness to practice psychology. Doe has brought this civil action against Suburban and its parent corporation, the John Hopkins Health System Corporation ("JHHS"), alleging retaliation under the False Claims Act, 31 U.S.C. §§ 3729 to 3733 (2012), retaliation under the Maryland Healthcare Worker Whistleblower Protection Act ("MHWWPA"), Md. Code Ann., Health Occ. §§ 1-501 to 1-506 (West 2008), post-termination retaliation under the MHWWPA, defamation, and intentional interference with business relations. Pending before the Court is Defendants' Motion to Dismiss Portions of Plaintiffs First Amended Complaint. A hearing on the Motion was held on March 23, 2017. For the reasons set forth below, the Motion is GRANTED IN PART and DENIED IN PART.

         BACKGROUND

         The following facts are presented in the light most favorable to Doe, the non-moving party. Doe, a resident of the District of Columbia, is a licensed psychologist with a doctoral degree in education. Suburban is a Maryland corporation that owns and operates a hospital in Bethesda, Maryland. JHHS is a Maryland non-stock corporation based in Baltimore, Maryland and is the sole owner of Suburban.

         Doe owned a solo psychology practice for over 25 years. In the summer of 2013, Harry Gill, the Medical Director of Suburban's Behavioral Health Department, and Donald Silver, Suburban's Corporate Director, recruited Doe to serve as the new Director of Suburban's Outpatient Mental Health Department ("OMHD"). Suburban's accreditation for the OMHD had lapsed and its former Director had recently resigned in the wake of significant ethical and compliance violations, including the practices of completing patient notes before actually meeting with patients and allowing unlicensed therapists to provide treatment. Silver and Gill pledged that if Doe joined the team at Suburban, they would support her in rectifying the ethical and regulatory failures. Doe accepted their offer and began work at Suburban in November 2013, curtailing her private practice in order to accommodate her new responsibilities.

         Shortly after starting at Suburban, Doe identified various ethical and regulatory violations that could cause Suburban to lose its accreditation. After reporting each violation internally, Doe took action to correct each issue. Despite the earlier promises of support, many of her efforts were met with resistance. In particular, Doe identified various problems with the billing practices of Axis Healthcare Group, a private psychiatry services company controlled by Gill that contracts with Suburban to provide psychiatric services. These problems included double-billing to the Centers for Medicare & Medicaid Services ("CMS"); inflating bills payable by CMS, private insurers, and patients; falsely certifying compliance with CMS regulations; and providing and billing for unnecessary services. Doe also discovered that Gill and other Axis employees were self-referring Suburban patients throughout the Axis network, which she believed to be a violation of state and federal law. Doe reported her concerns to a number of Suburban officials, including Gill, Silver, and Jacqueline Schultz, Senior Vice President of Clinical Operations and Doe's direct supervisor. Suburban nevertheless took no corrective action. Schultz was initially supportive of Doe's concerns, but she later cautioned Doe not to use the word "fraud" in her presence, because Schultz would then be required to report the matter herself.

         Doe also learned about, and reported to management, other potential conflicts of interests that caused her concern, including a 2013 proposal by Gill for a Partial Hospitalization Program run under his own umbrella corporation and a 2015 proposal for Suburban to engage a company with which Gill had an undisclosed relationship to provide telephonic outpatient support for mental health patients. In 2014, Doe recommended to Silver that an art therapist be terminated for permitting an unsupervised intern to run Suburban's art therapy program, but management resolved the matter with a written warning. Later that year, when Doe recommended that the same art therapist be terminated for operating the art therapy program without the required license, Suburban again chose to resolve the matter with a written warning. Doe also reported that Silver, who had no medical training, had recommended treatment for patients, only to be told that the practice had been going on for years. No corrective action was taken. Silver, who was popular among Suburban's employees, left Suburban in 2015 without explanation, and some employees blamed Doe for causing his departure.

         On August 17, 2015, Doe was terminated from her position. At a meeting that day with Doe and Schultz, Wayne Stockbridge, the Senior Director of Human Resources, informed Doe that she was being terminated immediately due to a reorganization of her department. JHHS policy requires that an employee affected by reorganization be consulted before termination and provided six weeks' notice. Stockbridge asked Doe to sign a severance agreement that was modified to add provisions releasing claims of whistleblower retaliation and stating that Doe was unaware of wrongdoing at Suburban or JHHS and had not reported any compliance matters. During the meeting, Stockbridge also stated that he had been told that Doe:

a. Created an unpleasant work environment by sharing an office with her staff;
b. Created a disruptive work environment by having employees share an office;
c. Promoted an environment of paranoia by talking quietly or having conversations in the hallway instead of in the shared office;
d. Invited some, but not all[, ] of her staff to a glass-blowing class as a teambuilding exercise;
e. "Gossiped" about staff and made sarcastic "quips" about staff;
f. Sent text messages to staff after hours and on weekends;
g. Intimidated her staff by setting up meetings that were "confidential";
h. "Trapped" Mr. Silver into giving clinical advice;
i. Held a "personal vendetta" against [an Axis employee], as evidenced by her asking ... whether [that employee] had committed wrongdoing; and
j. Wore short skirts, sheer pantyhose, open blouses, and no underwear.

         Am. Compl. ¶ 34, ECF No. 11. Stockbridge told Doe that the allegations were unrelated to her termination, but that he thought that she should be aware of them. Doe believed that the statements were intended to convey a threat that Suburban would spread the allegations more widely if Doe fought the termination or reported further concerns about fraud. In a telephone conversation two days later, Stockbridge informed Doe that her termination was based in part on this list of allegations after all. He acknowledged that he had not personally investigated the allegations and noted that the allegation related to the glass-blowing class was likely false.

         On or about September 9, 2015, Doe, through counsel, informed JHHS that she would not sign the severance agreement. According to Doe, Suburban and JHHS then began to spread rumors about Doe in an attempt to discredit her in her professional community. Katherine Brunkow, an employee at the Washington Center for Psychoanalysis ("the WCP"), informed Doe that someone at Suburban, whom she declined to identify, had called her and made disturbing allegations about Doe, including that Doe had been escorted out of Suburban by hospital security, that she had "lost it, " and that she had pulled her skirt up over her head. Am. Compl. ¶ 38. None of the allegations were true. Brunkow later told Doe that a second source had given her additional negative information about Doe. Doe has been a member of, and held leadership positions in, the WCP, a professional organization that served as a source of patient referrals while she was in private practice. As a result of the allegations made about Doe to Brunkow, WCP leadership became ...


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