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Corridors Fall 2018

News for North Carolina Hospitals


Click on the graphic to the right to view a PDF version of this issue of Corridors.

Recent Decision Highlights Potential Personal Liability of Hospital Directors Based on Breach of Fiduciary Duty

In a recent case, a federal bankruptcy court in Michigan reviewed important questions involving breach of fiduciary duty and the application of the business judgment rule to both management and volunteer board members of a nonprofit hospital. In that case, the liquidating trust for bankrupt Cheboygan Memorial Hospital filed a lawsuit alleging negligence and/or breach of fiduciary duty by the former officers and directors of the hospital. The trust claimed that defendants had failed to address losses from its employed physician practices; failed to address billing and coding issues; failed to ensure adequate control over financial issues allowing the financial statements to overstate the hospital’s revenues; improperly approved the quick sale of a joint venture home health agency for less than fair market value in order to meet payroll; allowed excessive senior management turnover to continue; permitted excessive compensation to physician board members; and allowed a conflict of interest when the hospital refinanced $4.3 million in long-term debt with a bank whose president was a hospital director. CMH Liquidating Trust v. Anderson, Case No. 12-20666, Chapter 11, Adversary Proceeding No. 14-02020 (August 2, 2018).

Title IX - A New Pathway for Sex Discrimination Claims by Medical Residents?

Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681 et seq. (Title IX) has received a lot of attention recently for its impact on college athletic programs. Both male and female sports have grown increasingly popular and can now create large revenue streams for their educational institutions. With all the focus on sports, many people outside of the legal arena probably overlook that Title IX actually covers all aspects of education. For example, a federal appellate court held just last year that the discrimination and harassment prohibitions of Title IX even extend to medical residency programs in private hospitals.

Proposed 2019 SMFP Need Determinations*

*This article has been removed from the website and replaced with an updated version to reflect the results of the State Health Coordinating Council's meeting on October 4, 2018. This new article is titledRecommended 2019 SMFP Need Determinations and CON Application Filing Schedules

On October 4, 2018, the State Health Coordinating Council met to make its final recommendations for the proposed need determinations in the 2019 State Medical Facilities Plan.

Securing Wireless Infusion Pumps in Healthcare

This alert was originally published on August 27, 2018 and has been updated for this issue of Corridors.

The National Cybersecurity Center of Excellence (NCCoE) announced in August that it has finalized the draft guidance, first issued in May of last year, on securing wireless infusion pumps. Infusion pumps are often tasked with supplying a steady inflow of life-saving or life-sustaining medications to hospital patients, and their exposure to the internet comes with risks of malicious manipulation, risks of patient harm, data breaches, and risks to an entire organization’s computer system.

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