Surgeon Termination for Medicare Fraud Settlement Upheld

An Ohio appellate court has ruled that a hearing was not required for Trumbull Memorial Hospital to revoke clinical and staff privileges of Michael Jurenovich, D.O.—who was terminated after settling a Medicare fraud case—because he had violated the hospital’s medical staff bylaws.

Dr. Jurenovich is an orthopedic surgeon. Prior to April 2016, he had staff privileges at Warren, Ohio-based Trumbull Memorial Hospital (Trumbull).

In 2014, Dr. Jurenovich was sued for Medicare fraud. Dr. Jurenovich settled the case. Three months later, Trumbull found out about the settlement from a local newspaper article. Trumbull terminated Jurenovich’s staff privileges pursuant to section 3.3 of the hospital’s medical staff bylaws.

Section 3.3 of Trumbull’s bylaws requires medical staff to notify the hospital within 14 days of a settlement alleging professional negligence or fraud. Section 3.3 further provides that failure to provide notice “shall result in immediate loss of medical staff membership and clinical privileges.”

Dr. Jurenovich sued Trumbull Memorial Hospital seeking a declaratory judgment and claiming breach of contract and violation of state due process rights. Dr. Jurenovich alleged Trumbull “breached the bylaws by terminating his staff privileges.” Dr. Jurenovich asserted that Trumbull violated article 8 of the medical staff bylaws “which grants the right to a full hearing in corrective actions.”

The trial court granted Trumbull Memorial Hospital’s motion for summary judgment, finding that a full hearing was not required because section 3.3 applied to Dr. Jurenovich’s claims. Dr. Jurenovich appealed.

The Ohio Eleventh District Court of Appeals affirmed the trial court’s decision. The appeals court relied on prior case law stating, “it is well established that when two provisions in a contract have conflicting language, the provision that specifically relates to the underlying subject matter controls over the general.”

The appeals court reasoned that section 3.3 was specific. Section 3.3 applied to Dr. Jurenovich’s settlement and required that he notify the hospital within 14 days. Under section 3.3, failure to provide notice “shall result in immediate loss of medical staff membership and clinical privileges.”

The appeals court further articulated that article 8 “set forth general procedures to be followed” and did not specifically state it applied to section 3.3—therefore, the more specific section applied.