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From Health Law Daily, July 19, 2016

Speech connected to compliance activity not protected by anti-SLAPP statute

By Kayla R. Bryant, J.D.

A health plan’s erroneous notification that a physician was excluded and suspected of fraud was not in furtherance of the exercise of free speech in the public interest. The California court of appeals reversed a trial court’s determination that Kaiser Foundation Health Plan, Inc. (Kaiser) was protected by the state’s anti-strategic lawsuit against public participation (anti-SLAPP) statute (Code Civ. Proc. section 425.16). The appeals court found that construing compliance activity as protected communications was an inappropriately broad application of the statute (Edalati v. Kaiser Foundation Health Plan, Inc., July 18, 2016, Bruiniers, T.).

Exclusion letters and lawsuit. Kaiser notified some of the physician’s patients that she was excluded from federal health care program participation and referred the patients to the HHS Office of Inspector General (OIG) website. She sued Kaiser for defamation and invasion of privacy under false light, alleging that Kaiser either knew of the falsity of information or released it in reckless disregard of the truth. Kaiser argued that the statements were protected activity and that the plan was following CMS’ requirements for Part D sponsors to notify excluded physicians’ payments that federal funds cannot cover the cost of drugs that were prescribed by these providers. Although Kaiser admitted that the letters were incorrect, it argued that the letters were sent after an employee misread the physician’s name. The court broadly construed the anti-SLAPP statute and found that Kaiser’s efforts were protected free speech in connection with an issue of public interest, expenditure of Medicare funds.

Anti-SLAPP. An anti-SLAPP analysis requires a two-step process. The court first decides whether a threshold showing had been made that the cause of action resulted from protected activity. The court then determines whether the injured party has shown a probability of prevailing. The physician argued that the conduct was not protected activity because it was not connected to activity considered in the public interest under the meaning of the California statute.

The court maintained a focus on the specific nature of the speech in order to determine its connection to the public interest, finding that the notification sent to the patients was not actually about Medicare funding. Kaiser sent the letter as part of its compliance efforts, and protecting such conduct under anti-SLAPP law would apply to any act of regulatory compliance on behalf of health care providers. The court found that this application of the law would be too broad and exceed the legislature’s intent. The trial court’s order granting Kaiser’s anti-SLAPP motion to strike and granting Kaiser attorney fees was reversed, and Kaiser must bear the physician’s costs on appeal.

The case is A144758.

Attorneys: Craig Trent Byrnes (Craig T Byrnes Law Office) for Nazila Edalati. Brian Soo Lee (Marion's Inn, LLP) for Kaiser Foundation Health Plan, Inc.

Companies: Kaiser Foundation Health Plan, Inc.

MainStory: TopStory CMSNews BillingNews FraudNews PartDNews ProviderNews CaliforniaNews

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