Buytendorp v. Extendicare Health Services, Inc.

498 F.3d 826, 26 I.E.R. Cas. (BNA) 806, 2007 U.S. App. LEXIS 19551, 2007 WL 2376338
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 17, 2007
Docket06-1717, 06-1725
StatusPublished
Cited by26 cases

This text of 498 F.3d 826 (Buytendorp v. Extendicare Health Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buytendorp v. Extendicare Health Services, Inc., 498 F.3d 826, 26 I.E.R. Cas. (BNA) 806, 2007 U.S. App. LEXIS 19551, 2007 WL 2376338 (8th Cir. 2007).

Opinion

MELLOY, Circuit Judge.

JoAnn Buytendorp appeals the district court’s 2 grant of summary judgment in favor of her employer, Extendicare Health Services, Inc. (“Extendicare”), in this diversity action under the Minnesota Whis-tleblower’s Act, Minn.Stat. §§ 181.931 to 181.935 (“the Act”). Extendicare cross-appeals the district court’s denial of a motion requesting permission to amend a scheduling order to permit a motion for sanctions against Buytendorp’s counsel. We affirm.

1. Background

A. The Parties and the Allegedly Illegal Practices

Extendicare is a for-profit healthcare company that operates long-term care, *828 skilled nursing, assisted living, and shorter-term rehabilitation facilities in Minnesota and other states. It is a Delaware corporation with its principal place of business in Wisconsin. Extendicare receives reimbursement payments from various payor sources, including Medicare, Medicaid, and private sources. The reimbursement rate Medicare pays to Extendicare is substantially higher than the rates paid to Extendicare by the other sources.

Buytendorp began working for Extendi-care upon graduation from college in 1989. Between 1989 and mid-1996, she completed additional course work, obtained an administrator’s license, and held a series of positions of increasing authority at Exten-dicare. On July 1, 1996, she became the temporary administrator of an Extendi-care facility, Trevilla of New Brighton. In December 1996, Extendicare made Bu-ytendorp the permanent administrator at Trevilla. She worked in this capacity until 2004, when Extendicare terminated her employment.

Buytendorp alleges that she received no adverse performance reviews and was denied no raises nor opportunities for advancement prior to 2003. She alleges Extendicare terminated her employment because she complained about, and refused to participate in, practices she believed to be illegal. 3 The objectionable practices related generally to discrimination in the admission and treatment of patients based on payor source. She alleges Extendicare held rooms open for higher-paying Medicare patients, held Medicare patients longer than necessary, moved non-Medicare patients to less desirable rooms to make desirable rooms available for Medicare patients, and cut staffing to levels that were adverse to the patients’ interests, all purportedly in violation of federal law, state law, and Medicare guidelines.

Buytendorp states that there was some emphasis within Extendicare to maximize the admission and retention of Medicare patients dating back to 1996 but that she was neither instructed nor pressured to participate in practices she believed to be illegal until the 2003-04 time frame. According to Buytendorp, the atmosphere changed in late 2002 when Extendicare hired Laurie Bebo as a vice-president for the region that included the Trevilla facility. According to Buytendorp, Bebo aggressively pursued an increase in the number of Medicare patients and aggressively pursued cost-cutting measures. Under Bebo, Buytendorp states that she and other employees noticed a strong emphasis on profitability that they believed impeded the provision of good patient care. Bu-ytendorp describes the work atmosphere under Bebo as one of pressure to increase the number of Medicare patients by whatever means possible. Buytendorp also describes a number of specific policies that she characterizes as designed to maximize the admission and retention of Medicare patients to the detriment of patients covered by other payor sources. Buytendorp alleges that these policies, even if not facially illegal, served as a framework that permitted and concealed payor source discrimination.

Regarding the general atmosphere of pressure, Buytendorp states that Bebo instituted a target Medicare patient quota *829 for each facility, known as a payor mix or Medicare census. Administrators’ compensation was linked in part to meeting the quotas for their facilities. Bebo and the area director of clinical reimbursement, Jim Hendricks, held weekly conference calls with facility administrators and nursing directors who failed to meet their quotas. Buytendorp states that Hendricks would belittle and yell at staff who failed to meet a Medicare census.

Regarding specific policies, Buytendorp first identifies a policy she calls the “two-beds” policy. The Trevilla facility had some rooms in a rehabilitation wing that contained only two beds per room and that were more spacious than rooms in a separate long-term care wing that contained three beds per room. The two-bed rooms also had a greater number of amenities such as cable television. Buytendorp describes the three-bed rooms as undesirable and hard to market, with the middle beds of the three-bed rooms being particularly unattractive to potential patients. Buyten-dorp states that, in 2003, Bebo directed her to keep beds available in the two-bed rooms for Medicare patients, even if it meant turning away Medicaid or private source-payor patients. This policy also required Buytendorp to move non-Medicare patients out of the desirable rooms and into three-bed rooms if a Medicare patient called to be admitted. Buytendorp alleges that this practice of discriminating against patients based on payor source was in violation of Minnesota law.

A second specific policy Buytendorp identifies is the “green light” or “green flag” admissions policy. In theory, this policy was designed to streamline the admissions process and make it easier for facilities to deal with hospitals that released patients to Extendicare. The green flag policy was designed to permit any staff member to automatically admit new patients who had certain, enumerated diagnoses. Buytendorp states that, in practice, the green flag policy favored Medicare patients and changed over time into a policy that prohibited the rejection of Medicare admittees. Buytendorp claims the policy first changed to require a regional nurse’s approval before admission could be denied to a prospective Medicare patient, regardless of the facility’s ability to handle the patient’s needs. Later, even regional nurses and facility administrators could not approve such denials, and only Bebo could approve the rejection of a Medicare patient.

The third policy Buytendorp identifies is the Healthtrac program. In theory, this was a program for tracking patient progress that was intended to minimize the number of patients who were prematurely released and subsequently forced, following injury or relapse, to return for further or different care. Buytendorp alleges that, in practice, Healthtrac came to be used only with Medicare patients and became one of many tools Extendicare used to improperly and unnecessarily lengthen the stays of high-paying Medicare patients. Buytendorp alleges that she was directed to use the Healthtrac program and to take other measures to convince Medicare patients to extend their stays beyond any medically necessary length. Buytendorp admitted in her deposition, however, that she is not a physician nor is she qualified as a physician to determine what treatment is and is not medically necessary.

B. The Alleged Whistleblowing

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Bluebook (online)
498 F.3d 826, 26 I.E.R. Cas. (BNA) 806, 2007 U.S. App. LEXIS 19551, 2007 WL 2376338, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buytendorp-v-extendicare-health-services-inc-ca8-2007.