April 1, 2015 Recent Legal News




Peer Review and Employment




US v Sandoz

Sandoz will pay $12.64 million to settle allegations that it misrepresented pricing data to Medicare.  The feds say that Sandoz did not tell the truth about their "average sales price".

US v Sharif

Dr. Mudassar Sharif of Bernards Township, New Jersey, has been indicted for illegally dispensing oxycodone and for arson.  He allegedly charged $15 per pill and $3000 for prescriptions.  The arson is to cover-up the wrongdoing.

Wholey v UPMC

The wife of a radiologist has filed a whistleblower claim against UPMC and Donohue Cardiology stating that they routinely double billed the fed insurers for radiology procedures.  She claims they billed for more intensive (expensive) procedures than her husband actually did and they unbundled the procedures to bill even more.

US v Novak et al

A federal jury found that Edward Novak, Clarence Nagelvoot and Roy Payawal guilty of kickbacks to keep the now shuttered Sacred Heart Hospital in Chicago open.  Patients were bussed from nursing homes from a distance away to receive care in the ED.  The defense was that it was not unusual for a hospital to drum up business.  The doctors are awaiting trial.

US v Mesiwala

Dr. Kutub Mesiwala of Bloomington Hills, Michigan, has pled guilty to health care fraud by accepting kickbacks from home health companies for un-needed referrals.  He will be sentenced in the fall.

Dion v Amato
Not Guilty

In a strange case the IG of Health and Hospitals Corporation Norman Dion has finally has dropped the case against Coney Island Hospital social services director Vanessa Amato.  The case stemmed from a plasma TV given to Amato in 2007 by a nursing home.  Amato was suspended for one month and lost two weeks vacation time back then.  She is still employed.  Imagine all this time on one stupid case.  

US v Health Diagnostic Laboratory

The settlement has not been announced formally as yet but HDL has agreed to pay close to $50 million for their scheme to pay physicians to send the lab patient's blood for testing.  As part of the settlement they will admit no wrongdoing but agree to a five year integrity agreement.

Herrera v JFK Med Ctr.
MD Fla

The plaintiffs sued and wanted a class action for the hospital and its parent HCA overcharging patients.  The court refused to dismiss HCA who claimed they had no sway over their subsidiary.  The court while having doubts as to the the level of the alleged practices allowed the case to continue under the Florida statutes.  The court did dismiss the class action regarding the key issue of overcharging for the x-ray studies.  

US ex rel Montejo v Adventist Health Sunbelt
MD Fla

In a gross violation Adventist agreed to pay the feds $5.4 million for having the audacity to provide radiation oncology services without a pysi9cian supervising the treatments.  This is not only against the law but is an affront to the patients.  The whistleblower radiation oncologist will receive over $1 million for blowing the whistle on this cheap organization.  They are called Florida Hospital in Florida where this occurred.  

US v Aurora Health
ED Wisconsin

In another case against this organization the feds are investigating it for fraud for their employed physicians submitting false claims.  Aurora attempted to not give the feds protected peer review information asked for in a subpoena.  They,  of course, lost since state peer protection does not flow to federal law.

Cooper v Pottstown Hosp

The surgeon was an independent contractor with an on call contract.  He then bought into a competing surgical facility and he had his on call contract terminated.  Later he entered into another on call contract that allowed him to keep his competing interest but he could not gain employment with another hospital within 30 miles. The surgeon did just that and had his second on call contract terminated.  He then sued saying the on call contracts were covert ways of inducing exclusive referrals to the hospital in violation of the Anti Kickback Statute.  The court dismissed the claims since the surgeon had no proof that the on call contracts were anything other than a business arrangement.        Top


US v Newton Medical Center

The hospital in Newton, Kansas, settled an EMTALA claim that they did not provide a screening exam for a pregnant woman who was later admitted to another hospital and gave birth to a stillborn.  They will pay $45,000 to the feds for this and still face a medical malpractice lawsuit in the case.  When the patient went to the ED complaining of abdominal and back pain they did no screening of the patient.

US v Bingham Memorial Hospital

The feds are investigation the hospital in Blackfoot, Idaho, for patient dumping.  The hospital will be closed on June 2 if corrective actions are not taken.  The case was about a on-call physician not available and not responding at the hospital to provide emergency services.  The hospital says this stems from a miscommunication between the ER physician and the on-call physician as to the need to come to the ER.

Rahm v Kaiser
Jury Trial

Rahm sued Kaiser for medical malpractice and won a $28 million verdict for negligence in not ordering an MRI sooner.  The teenager had severe lower back pain and went to Kaiser.  They told her to lose weight but she was 125 pounds and 5 foot four inches tall (normal).   She had a malignant tumor that required surgery and the removal of a leg and part of her pelvis ad spine.  Part of the case was about Kaiser's money saving attitudes over patient safety.  The article doesn't state why this case was in court instead of arbitration.   Kaiser will obviously appeal so they can settle for a lesser amount.  They already lost the PR war.        Top


Patients v Premera Blue Cross
To Be Filed

Ain't electronic medical records wonderful?  They take away time with the patient and then if stolen instead of one or two medical records the thief gets, as in this case, 11,000,000 of them.  The cyber attack started in May 2014 and was not discovered until January, 2015.  The health firm was right on it.  They got all the pertinent financial information including SSN and bank numbers.  They are providing credit check services to the affected people.

Patients v Florida Hospital
To Be Filed

Florida Hospital has notified has notified patients that their data was compromised a year ago.  They state they did not notify earlier due to a police hold on the information.  Two employees downloaded face sheets on patients outside of their normal duties.  Both have been fired.

Patients v Advantage Dental
To Be Filed

The Oregon organization was hacked and the information including SSN on over 150,000 people was accessed.  They will now update their system and improve security.  Shame they didn't decide to do this earlier.        Top

Peer Review and Employment

In Re Otero County Hospital Assn.
NM Bankruptcy Ct.

The hospital declared bankruptcy after many patients sued and the hospital did not have enough money to pay them all.  The sit involved an anesthesiologist who did experimental pain services.  The CEO had been aware of the problem but did nothing to correct it.  He defended himself by saying he was not responsible for any medical or credentialing decisions.  That is true as long as the hospital is making money from the physician.  The CEO also gave temporary privileges to physicians prior to consideration by the Credentialing Committee.  This means the management company is still liable for the payments.

Simpson v Beaver Dam Community Hospital
7th Circuit

Simpson applied for medical staff privileges and then withdrew his application after being told their were some problems.  He then sued for racial discrimination.  The lower court granted summary judgment to the hospital.  The physician appealed.  I guess he has a lot of money to burn.  He, of course, lost again.  The "red flags" in his application were enough to cause the hospital to refuse to grant him privileges.  He also played the race card by saying the position was offered to three Caucasians after he withdrew his application. Of course, they did not have the same problems as did Simpson.

AmSurg New Port Richey Florida v Sreenivasa Vangara
Fla Ct App

 Dr. Vangara was a physician investor in the surgical center.  The contract said he could not have a financial interest in or developing a business competitive with the ASC.  Vangara operated a competing ASC.  He was sued and won in the lower court since the contract dictated Tennessee law.  However, on appeal, he lost since the anti compete clause did not prohibit him fro an practice of medicine but only from a commercial competing venture.

Winger v Meade District Hospital
D Kan

The physician had his employment terminated and sued for not getting due process.  He lost since he had only temporary privileges which the bylaws said can be terminated without a hearing or an appeal.  He had been under review for substandard care and refused to participate in the hospital's third party review.  Instead he went the medical records to another third party for review without the usual business associate forms.  Summary judgment to the hospital.        Top


Chaganti v Missouri Bd. Registration
Mo Ct App

The hospital revoked his privileges for failing to list other hospitals on his application for re-appointment.  The Board found that he did not intentionally fail to update his information his action was unprofessional conduct.  The physician sued and the appellate court reversed since the Board had no lawful basis since the physician had not received adequate notice that he could be discipli8ned for the omission.

In re Karakashian
NJ Superior Ct App Division

The New Jersey AG was investigating the physician for acts of negligence.  The investigation was ongoing when the physician applied for renewal of staff privileges.  He failed to disclose the investigation in his reapplication form.  The licensing board found out about this failure to disclose and suspended his license for two years due to making false and deceptive statements.  He sued and the court agreed with the Board stating the discipline was required to ensure physicians ac in a trustworthy fashion with patients and hospitals.

Two cases not quite the same facts and two different outcomes.        Top


Armstrong v Exceptional Child Center
US Supreme Court

The high court in a usual 5-4 decision ruled that providers do not have the right to sue state Medicaid agencies for not paying enough.  The Constitutional Supremacy Clause of fed over state rules.  Idaho kept the reimbursement of Medicaid at 2006 levels so that there were not enough providers to provide care.  The lower courts both said that Idaho needed to pay more and were overruled.  

Montanile v national Elevator Health Benefit Plan
United States Supreme Court

The court will hear the case regarding whether a beneficiary who wins money in court needs to reimburse his insurance plan for medical expenses it paid.  In this case Montanile won $500,000 against a drunk driver.  He went through the money in attorney fees, medical fees and living expenses.  The health plan is seeking reimbursement for what it spent on health care.  There is a division in the lower courts of appeal on the issue.  Montanile has lost in the lower courts.

Coons v Lew
United States Supreme Court

The court refused to take up the case which was a challenge to the IPAB under Obamacare.  This means that at this time the IPAB stands.  Once the IPAB takes an action the suit will be re-filed.        Top



DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.