The Virginia Supreme Court ruled Dec. 18 that a physician's whistleblower retaliation claim against two medical staffing companies was time-barred, reversing decisions by lower courts that had allowed the case to proceed.
In *Ingleside Emergency Group, LLC v. Michele H. Hollis, M.D.*, the court held that Dr. Michele Hollis's claim under the Virginia Whistleblower Protection Act was filed more than one year after the alleged retaliatory action occurred, violating the statute's limitations period. Justice Teresa M. Chafin wrote the opinion for the court.
The case centers on Hollis's contracts with Ingleside Emergency Group and Kingsford Emergency Group, medical staffing companies that provide physicians to hospitals. Hollis entered into agreements with the companies in November 2018 to provide emergency medicine services at HCA Healthcare facilities.
After several contract renewals, Hollis signed new provider agreements effective July 6, 2020, for one year. The contracts allowed termination without cause with 90 days' written notice, or immediate termination by the staffing companies for certain specified causes.
The dispute arose in November and December 2020, when Hollis voiced opposition to practices she was directed to undertake. According to court documents, Hollis reported to management that she refused to upcharge her services because she believed the practice was fraudulent. She also complained verbally and by email to management about other practices.
The staffing companies filed a plea in bar, arguing that Hollis's whistleblower claim was time-barred under the Virginia Whistleblower Protection Act's one-year statute of limitations. The trial court initially denied the plea, and the Court of Appeals of Virginia affirmed that denial.
However, the Virginia Supreme Court disagreed with the lower courts' analysis. The high court found that the allegations in Hollis's complaint established that the prohibited retaliatory action took place more than one year before she filed suit, making her claim untimely under state law.
The Virginia Whistleblower Protection Act, codified at Code § 40.1-27.3, protects employees who report suspected violations of law or regulation to appropriate authorities. The law prohibits employers from retaliating against employees who engage in protected whistleblowing activities.
Crucially, the act includes a one-year statute of limitations for filing retaliation claims. This means employees must file suit within one year of when the alleged retaliatory action occurred, or they lose their right to pursue the claim in court.
The Supreme Court's decision turns on when exactly the alleged retaliation occurred versus when Hollis filed her lawsuit. While the court's opinion notes that Hollis complained about fraudulent practices and other issues in late 2020, the timing of any subsequent retaliatory actions and when she filed suit appears to have been central to the court's analysis.
The case represents an interlocutory appeal, meaning it was decided before the underlying case reached final judgment. The Supreme Court's reversal means the case will return to the trial court, but Hollis's whistleblower claim will be dismissed as time-barred.
The decision could have implications for other healthcare whistleblower cases in Virginia, particularly regarding how courts calculate limitation periods for retaliation claims. Healthcare workers who witness potential fraud or other violations must be mindful of the strict one-year deadline for filing whistleblower protection claims.
Medical staffing companies have become increasingly common in emergency medicine and other hospital specialties. These companies contract with hospitals to provide physician coverage, often employing or contracting with doctors who then work at various healthcare facilities.
The case also highlights potential tensions in healthcare billing practices. Hollis's allegations of fraudulent upcharging reflect broader concerns about healthcare billing that have been the subject of numerous federal and state investigations and enforcement actions.
For healthcare workers considering whistleblower complaints, the decision underscores the importance of understanding statutory deadlines. Virginia's one-year limitation period for whistleblower retaliation claims is relatively short compared to some other types of employment discrimination claims, which may have longer filing deadlines.
The Supreme Court's unanimous decision provides clarity on how Virginia courts should interpret the timing requirements for whistleblower protection claims. The court applied established legal standards for reviewing plea in bar decisions, treating the allegations in Hollis's complaint as true for purposes of the procedural challenge.
The case will now return to the circuit court for further proceedings consistent with the Supreme Court's ruling. While Hollis's whistleblower claim appears to be dismissed, other potential claims in the case may still proceed depending on the specific allegations and applicable law.