ArentFox Schiff Secures Significant Appellate Decision on VA Employee Rights

The plaintiff, a VA emergency room physician, was terminated in 2017 following his decision to divert an en route ambulance from a VA hospital to a community hospital that was Level II trauma certified. Under specific protections provided by Congress, the doctor requested review by a three-physician appeals panel, which held a trial and recommended overturning the VA’s termination decision because the doctor’s diversion decision was consistent with the medical standard of care.

The VA rejected the appeals panel, concluding that it was not medically “necessary” to divert the patient, even though the termination question turned not on medical necessity, but rather on medical judgment – whether the diversion decision was appropriate.

In April 2022, the Seventh Circuit held that the VA had failed “to grapple at all with any of the reasons” that the appeals panel advanced to support its decision, as the statute requires. The Seventh Circuit vacated the VA’s decision and remanded for reconsideration. On remand, the VA again upheld the termination.

On October 18, 2023, a federal district judge again vacated the VA’s decision, noting that on remand, “[b]ewilderingly, the [VA] has made the same mistake again” by failing to grapple with the appeals panel’s reasoning. The court remanded the action to the VA, “so that it can finally correct this mistake.”