Doc Secures $5.8 Million Award Against Hospital

Alicia Gallegos

February 01, 2022

An Indiana obstetrician-gynecologist has secured a $5.8 million award against her hospital for defamation after a 4-year legal battle.

Rebecca Denman, MD, sued St. Vincent Carmel Hospital and St. Vincent Carmen Medical Group in 2018 for defamation, tortious interference with employment, and fraud after a nurse claimed Denman smelled of alcohol while on duty. Denman contended the accusation was unproven, that administrators failed to conduct a proper peer-review investigation, and that repercussions from the false allegation resulted in lost compensation, out-of-pocket expenses, emotional distress, and damage to her professional reputation. In January 2020, jurors sided with Denman and awarded her $4.75 million in damages.

The Indiana Court of Appeals upheld the verdict In August, 2021 and concluded that Denman was entitled to interest. On January 27, the Indiana Supreme Court denied a request by the hospital to transfer jurisdiction of the case, allowing the verdict to stand. With interest, Denman's judgment now exceeds $5.8 million.

"I feel vindicated," Denman said in a statement. "It has been a very difficult four years for me, and it is my hope that this finally puts the matter to rest."

Ascension, the hospital's parent company, did not return requests for comment. In a previous statement, an Ascension spokesman said the health system was "disappointed" by the verdict.

The lawsuit stems from a December 11, 2017, incident in which a nurse practitioner (NP) claimed Denman's breath smelled of alcohol during an evening shift. Denman was not informed of the allegation on December 11 and was not tested for alcohol at the time, according to Denman's lawsuit. Under hospital policy, if a physician is suspected of being under the influence of alcohol at work, the employer must immediately assess the doctor, relieve the doctor of duty, and request the physician to submit to immediate blood testing at an external facility.

The NP reported the allegation to her supervisor through an email on December 12, 2017. The supervisor relayed the information to the hospital's chief medical officer, who met with other administrators and physicians to discuss the claim. During the discussions, a previous concern about Denman's drinking was raised, according to deposition information included in court documents.

In 2015, two physicians suggested Denman consider an assistance program after expressing concerns that she was arriving late to work and missing partner meetings. At the time, Denman did not enter an assistance program, but she changed her drinking habits, began seeing a therapist, and started arriving on time to work and to partner meetings, according to court documents. No other criticism or complaints regarding her drinking or workplace behavior have been reported since, according to court documents.

When confronted with the NP's claim on December 13, 2017, Denman denied consuming alcohol on December 11, 2017, and questioned why the hospital's substance abuse protocol was not followed. St. Vincent Carmel Hospital conducted a preliminary review of the allegation through its peer-review process and turned the matter over to St. Vincent Medical Group for further review, according to court documents.

St. Vincent Medical Group later informed Denman that they had reviewed the allegation through its peer-review process and that she was suspended with partial pay until she underwent an evaluation for alcohol abuse through the Indiana State Medical Association, according to the lawsuit.

But administrators falsely misrepresented to Denman that peer review had been done, according to Denman's attorney, Kathleen A. DeLaney. Denman was never offered a hearing before a peer-review committee, never learned the substance of the evidence, and never had an opportunity to respond to the allegations, she said.

According to the Indiana Peer Review law, a healthcare provider under investigation is permitted to see any records accumulated by a peer-review committee pertaining to the provider's personal practice, and the provider shall be offered the opportunity to appear before the peer-review committee with adequate representation to hear all charges and findings concerning the provider and to offer rebuttal information. The rebuttal shall be part of the record before any disclosure of the charges and before any findings can be made, according to the statute.

Denman was referred by the medical association to an addiction treatment center, which evaluated Denman and diagnosed her with alcohol use disorder, according to the lawsuit. As a result of the report and as a condition of retaining her medical license, the medical association and St. Vincent Medical Group required Denman to enter a treatment program at the same addiction treatment center.

She was also required to sign a 5-year monitoring contract with the Indiana State Medical Association as a condition of her employment, according to the lawsuit. As a result, Denman was required to sign a contract that mandated she undergo a breathalyzer test four times a day for the first year and then three times a day for 4 more years as well as go to random drug screenings.

Denman's jury award came after a 4-day trial in Indiana Commercial Court.

"We are very pleased with the Court of Appeals' ruling and the Supreme Court's decision to let that ruling stand," said DeLaney. "We are proud of our client for standing up in the face of injustice and are happy that she will finally receive closure."

Denman continues to be employed as an ob/gyn with Vincent Medical Group and continues to hold medical staff privileges at St. Vincent Carmel Hospital, as she has for 24 years.

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