## Facts

- Raymond Vadnais, an HIV-positive patient, sought treatment at Beth Israel Hospital for severe right-ear pain.
- Dr. David M. Vernick treated Vadnais with antibiotics and ear drops, later diagnosed a perforated eardrum, and recommended surgery.
- After learning Vadnais was HIV-positive, Vernick refused to perform the elective surgery.
- Vadnais alleged his pain and ear condition were prolonged by defendants’ refusal to operate and continued conservative treatment.
- In 1988, another physician, unaware of Vadnais’s HIV status, performed the surgery successfully, curing the ear problem.
- Vadnais sued under § 504 of the Rehabilitation Act and asserted pendent state-law claims; after Vadnais died, his executor, Rosalie Glanz, continued the action for compensatory (not punitive) damages.
- Defendants moved for summary judgment on the § 504 claim and the state-law claims.

## Issues

1. Whether a hospital that receives Medicare and Medicaid payments is a “program or activity receiving Federal financial assistance” covered by § 504 of the Rehabilitation Act.
2. Whether refusal to perform elective surgery because a patient is HIV-positive can constitute unlawful discrimination under § 504, including whether the patient was “otherwise qualified.”
3. Whether a hospital may be held vicariously liable under § 504 for discriminatory acts of its medical staff, and whether an individual physician who does not personally receive federal financial assistance may be individually liable under § 504.
4. Whether the federal court should retain jurisdiction over pendent state-law claims after ruling on summary judgment motions.

## Decision

- The court held Beth Israel Hospital was covered by § 504 because Medicare and Medicaid payments constitute federal financial assistance.
- The court denied summary judgment to Beth Israel on the § 504 claim, finding genuine disputes of material fact regarding whether Vadnais was otherwise qualified and whether defendants acted on the basis of handicap rather than an individualized medical judgment.
- The court granted summary judgment to Dr. Vernick on the § 504 claim because he was not a direct recipient of federal financial assistance and thus was not a proper individual defendant under § 504.
- The court dismissed the pendent state-law claims without prejudice, declining to exercise jurisdiction over them.

## Legal Principles

- Medicare and Medicaid payments to a hospital may constitute “Federal financial assistance,” making the hospital a covered “program or activity” under § 504.
- § 504 generally requires an individualized assessment of whether a person with a disability is otherwise qualified and whether reasonable accommodations can permit safe provision of services; categorical exclusion based on diagnosis is disfavored.
- A covered entity may face vicarious liability under § 504 where it exercises sufficient control over staff involved in providing the services at issue.
- Individual employees are not proper § 504 defendants absent receipt of federal financial assistance in their own right.
- Federal courts may dismiss pendent state claims without prejudice where state-law issues are novel or better resolved in state court.

## Conclusion

The court treated the hospital’s Medicare/Medicaid funding as sufficient to trigger § 504 coverage, allowed the discrimination claim against the hospital to proceed due to factual disputes requiring individualized medical assessment, dismissed the physician from the federal claim for lack of recipient status, and declined to retain the accompanying state-law claims.


Glanz v. Vernick, 756 F. Supp. 632 (D. Mass. 1991)