Health Care Whistleblowers Protected by Absolute Privilege; Abbott v. Individual Support Home Health Agency, Inc.

Some kinds of speech are protected by various legal privileges. The most powerful of these privileges is the absolute privilege because it is a complete defense to a claim based on that speech. And this case discusses the absolute privilege certain healthcare whistleblowers enjoy.

Home Health provides home-based healthcare services, and those services are regulated by the Indiana State Department of Health (ISDH). The defendants in this case were all nurses who were employed as case managers for Home Health. In 2017, these nurses reported to ISDH that Home Health employees forged their signatures on documents related to patient care. Home Health claimed that these reports were false, and that the nurses were retaliating for poor performance reviews. ISDH found that the reports were not substantiated.

Home Health eventually filed a lawsuit against the nurses, who moved to dismiss, arguing that the statements to ISDH were absolutely privileged. The trial court denied that motion, and the nurses appealed that decision.

The absolute privilege traditionally protects all relevant statements made in the course of a judicial proceeding, regardless of the truth or motive behind the statements. And while this had once been applied strictly to formal judicial proceedings, the Indiana Supreme Court expanded its use in 2008 to the investigation of sexual harassment complaints made by university students about a professor.

In this case, while the Court recognized that the interests being protected here (health care) were different than that in the earlier case (education), it found that the nurses’ reports were more akin to the students’ than reports of criminal activity to law enforcement (which are only protected by a qualified privilege).

Here, there are also substantial deterrents to false reporting. Licensed health care professionals are expressly prohibited from “engag[ing] in fraud or material deception in the course of professional services or activities[.]” Sanctions for engaging in fraud or deception include revoking or suspending a practitioner’s license or imposing a fine. In addition, false reporting will likely impact the health care professional’s current employment and possibly his or her future employment as well. And Home Health, the employer, is unquestionably in a position of power over the Appellants. Moreover, and even more compelling than the circumstances in Hartman, the Appellants are obligated to report substandard care to the ISDH. Failing to do so can result in sanctions, including the revocation of their licenses.

These circumstances meant that the reports were given as part of a quasi-judicial proceeding, so they were absolutely privileged.

Lessons:
1. Indiana applies the absolute privilege to statements made both in the course of judicial and quasi-judicial proceedings.
2. A proceeding qualifies as quasi-judicial if there are substantial deterrents for a whistleblower to institute the proceeding.
3. Nurses who report complaints to the Indiana State Department of Health are protected by the absolute privilege.

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