District Court Finds in Favor of TeamHealth
Dismisses with Prejudice the AAEM, et al. Lawsuit in Its Entirety
The Decision On March 20, 2008, The District Court of Harris County, Texas, in American Academy of Emergency Medicine, Crystal Cassidy, et al. v. TeamHealth, Inc., et al. dismissed the suit in its entirety as to TeamHealth and all other defendants. The trial court found that none of the four Plaintiffs had standing to bring suit against any of the Defendants, and the trial court was therefore unwilling to consider any of the causes of action brought against TeamHealth and the other Defendants. The Plaintiffs were seeking a declaratory judgment action involving the alleged corporate practice of medicine. The suit was dismissed “with prejudice,” which means the Plaintiffs are barred from re-filing the suit. This decision comes on the heels of another favorable and noteworthy decision handed down in January 2008 in the substantially similar case of American Academy of Emergency Medicine and Humble Emergency Physicians, P.A. v. Memorial Hermann Healthcare System, TeamHealth, Inc. and ACS Primary Care Physicians-Southwest (“ACS”), a Texas medical group of physicians affiliated with TeamHealth. The trial court in this case dismissed all of the claims brought by AAEM and dismissed the remaining plaintiffs’ request for a declaratory judgment action against TeamHealth and ACS, finding the plaintiffs were without standing to seek an interpretation of the corporate practice of medicine doctrine. Although the dismissal in this case has recently been appealed by the Plaintiffs, TeamHealth remains confident that the decision of the trial court will be upheld on appeal. Background After a thorough Request for Proposal process that included a number of emergency medicine groups, in June 2007 ACS was selected by the Memorial Hermann Healthcare System in Houston, Texas, to provide emergency department staffing and management services for eight of the system’s suburban hospitals. Prior to ACS being awarded this contract, HEPPA provided the emergency department staffing services to Northeast Medical Center Hospital in Humble, Texas—one of MHHS’s hospitals. On June 20, 2007, AAEM and Dr. Cassidy filed a petition in Harris County Texas against TeamHealth and ACS. On August 30, 2007, AAEM and HEPPA filed a petition in Harris County, Texas, District Court. Both lawsuits claimed, among other things, that through the new emergency department contracting arrangement between ACS and MHHS, the Defendants TeamHealth, ACS and MHHS were engaging in the corporate practice of medicine, which is prohibited in the state of Texas. The Plaintiffs sought redress from the Harris County District Court, seeking to block the transition of the eight MHHS emergency department contracts to TeamHealth. TeamHealth’s Response “The allegation that TeamHealth engages in the corporate practice of medicine is completely without merit, and the courts’ decisions in both of these cases support the positions taken by us in each of the lawsuits,” states Lynn Massingale, MD, FACEP, founder and CEO of TeamHealth. “Approximately eight million times a year, a TeamHealth-affiliated physician provides care to a patient in the emergency department. The decisions that physician makes with regard to the care of that patient are based upon his or her own experience and judgment. Our goal is to help equip the physicians with the latest information and resources so they can make the best decisions for their patients. We are pleased with the courts' decisions in these two cases as we continue to move forward in our partnering with Memorial Hermann Healthcare System to fulfill its mission to improve the health of the Southeast Texas community."