August 1, 2008 Recent Legal News









Peer Review


Kentucky v Attys

Three attorneys are on trial for cheating their clients in a settlement in a diet drug case.  One attorney has been found not guilty but the other two, William Gallion and Shirley Cunningham part owners of the 2007 Horse of the year Curlin, are still at the jury stage.  They were accused of defrauding their clients of $65 million.   

US v Diaz

 Please look at where the following cases originate and draw your own conclusions.  Mr. and Mrs. Diaz of Miami, Florida, pled guilty of fraud in the All-Med Billing Company.  This cost Medicare about $148 million in false claims.  They billed for over $400 million of DME that was never ordered or delivered.  The guilty pleas were for small potatoes.  The sentences should be interesting.

US v Smith

Gustavo Smith of Miami, Florida, was found guilty of 17 counts of fraud and was sentenced to 11 years in prison.  He also forfeited $287,000 and ordered to pay restitution of $1.9 million.  The owner of a DME company billed Medicare for beneficiary DME without the beneficiaries knowing about it and using physicians names who had no knowledge of Smith or his company.  

US v Jimenez

A Miami, Florida, mother and two daughters were each sentenced in a DME fraud case.  They had netted over $14 million.  The mother got 31 months and each daughter got 51 months in prison.  They had paid patients to get prescribed unnecessary pulmonary meds.  There was no mention of any monetary sanctions in the article, but it was only for $14 million.  Chump change.

Texas v Frazier

Duain and Tajujana Frazier of Humble, Texas, were arrested along with nine others for DME fraud on the Texas Medicaid system.  They worked with eight DME companies to bill for equipment that was never delivered.  They were arrested attempting to trade their Bentley in for a Mercedes and cash. 

US v Hampton

Dr. William Hampton of Cypress, California, was sentenced to 10 years in prison for doing over $9 million in unnecessary surgical procedures.  He also had to pay $2.5 million in restitution.  The physician and the surgery center owners paid patients to undergo sweaty palm surgery.  Dr. Mamdouh Bahna was also involved in the scheme and sentenced last year to five years in prison. 

Alabama v Novartis

Novaritis and GlaxoSmithKline were found guilty of fraud in a Medicaid drug pricing scheme and ordered to pay $114 million to the state.  They charged more for drugs to the state than they charged others.  No punis were awarded.  The state had previously tried AstraZeneca and was awarded mucho dinero which was reduced to only $120 million by the judge.  The state is suing 70 drug companies in all for the same thing.        

CalPERS v UnitedHealth

United has agreed to pay CalPERS $895 million to settle a securities suit for backdating executive options.  United also paid $17 million to ERISA for the same thing.        

Los Angeles v Blue Shield

The Los Angeles City Attorney has added Blue Shield to his list of medical insurance companies he has sued on behalf of the citizens of his city who had their medical insurance rescinded.  He had previously sued Blue Cross and HealthNet.  The Blue Cross spokesman stated probably correctly that " this is a cheap political stunt."  

It should be noted that the DOJ has a backlog of about 900 cases that they are slogging through, most by whistleblowers.  The Department is focusing on the big cases.

US v Lester Cox Medical Ctr

The Missouri Lester Cox Medical Centers have agreed to pay $60 million and enter into a CIA for entering into illegal agreements with the physician group Ferrell-Duncan Clinic for inducements of referrals.  The medical center also claimed non-reimbursable costs. 

US v Amerigroup

The settlement in near for Amerigroup Insurance to pay the feds and Illinois a total of $225 million for fraud in refusing to enroll patients that would cost money such a pregnant women.  Amerigroup will also pay $9 million in legal fees to the plaintiffs.  This is a qui tam suit that will make the whistleblower a wealthy person.  

US v Health Net

Health Net has agreed to pay $225 million for using an inadequate and unfair system to reimburse members who receive outside care.  They will also make $40 million in business practice changes.  This is another indictment of the faulty database, Ingenix, a subsidiary of UnitedHealth.   

US v Stokes

Following the criminal suit against Dr. Robert Stokes which landed him in jail for over 10 years for fraud, the feds are now suing him civilly for $1.49 million for his fraudulent actions.  The physician is appealing the criminal conviction.    Top


Doe v Deaconess Beth Israel
To Be Filed

The Harvard affiliated hospital operated on the wrong leg of a patient.  However, in a bold move the CEO came out with a statement about the incident and challenged other hospitals to be as forthright regarding preventable events.  The leg was correctly marked but the surgeon did not see the marking and no one spoke up.  He never got the correct surgery.

Green v Kings County Hospital

The hospital and the city have been sued for a death of a patient that was seen on videotape.  She had been waiting at the ED of the Brooklyn psychiatric hospital about 24 hours to be seen.  The tape showed her falling on her face and lying prone on the floor with hospital personnel stepping around her.  As of now the cause of death is not known.  The hospital believes the family who is suing for $25 million is due fair compensation.  So far six people have been fired over the incident. This includes the chief of psychiatry, the physician on call, the head of security, two nurses and a security guard. The story continues with the hospital agreeing to have no more than a 13 hour wait and no more than 25 patients in the ED at any time.  The hospital personnel must check the waiting room every 15 minutes.  It should be noted that the hospital record lied stating the patient was either in the bathroom or sitting quietly in the ED when she was sprawled out on the floor as shown on the timed tapes.

Doe v Corpus Christ Spohn Hosp.
To Be Filed

Seventeen babies have received the wrong dose of anticoagulants and one died.  This is the same problem as the Dennis Quaid fiasco in Los Angels.  The problem was in the clearing of the heplocks with 10,000 units of heparin instead of 10 units.

Hall v Frankel
Co Ct App

The patient died after a pulmonary embolus post-op ortho surgery was missed by an on call colleague and a pulmonologist.  The family sued and the jury found the pulmonologist not liable bit the on call pod, his corporation and the surgeon were liable.  The appellate court agreed on all counts and also stated the family could get costs as well since they had offered to settle pretrial.

Patients v Duke

After Duke settled claims against it by 60 patients for washing surgical instruments in hydraulic fluid, 18 more sued for the same thing.

Scroggin v Wyeth

The federal jury had awarded the patient $2.75 million in compensatory damages and $19.4 in punitive damages against the drug company for not warning that Provera causes an increased risk of breast cancer.  The judge overturned the decision on the punitive damages and the company is appealing the compensatory damages due to an experts testimony should not have been admitted and without that testimony there would have been no case.

Estate of Maxey v Darden
Nevada Supreme Ct.

An ED physician stopped life support on a suicide patient.  In the lower court the physician won a summary judgment which was reversed at the supreme court level.  The high court agreed that the physician was the treating physician so had the authority to withdraw life support but there was a factual dispute whether the surrogate consent was valid and whether the physician complied with medical standards by stating the patient was terminal. 

Mateo v Kirshner

The patient had an orthopedic procedure and woke up with a temporary tattoo of a rose just below her panty line.  The surgeon routinely does this on all patients but this one took offense.  It may be battery but it is doubtful if much money will change hands.  They don't have much of a sense of humor in New Jersey.   

Matsuyama v Birnbaum
Mass Supreme Ct.

The patient went to the physician for four years complaining of stomach pain.  The doctor ordered no tests until the gastric cancer was far advanced and the patient died in five months.  The Supreme Court held that it is okay to sue for loss of chance.  If the patient has a less than 50% chance of survival the physician can be sued if the odds are reduced any further by negligence.        Top


Topper v Centerpoint Med center
Kansas Superior Ct.

Dr. Topper was the medical director or the neonatal intensive care unit of the medical center.  He was terminated without cause for a new medical group.  After Dr. Topper was let go ten nurses quit causing the temporary shut down to the neonatal unit.  He sued for wrongful termination, defamation and restraint of trade.  On the latter the jury found for the defendants but on the other two the physician won.  He received a total of $5 million from the hospital and the owner of the hospital.

Comens v SSM St. Charles Med Grp.
Mo Ct. App

The court ruled that the physician cardiologist could bring a breach of contract claim against the medical group.  The lower court had ruled for the group on summary judgment.  The two had a yearly automatically renewable contract for the physician to be paid via a specific formula.  The clinic changed the contract payment unilaterally and the physician sued for breach.  The physician accepted the new payments but wrote many letters disputing the payments.  This allowed the physician to proceed even with an apparent waiver.

Tuli v Brigham and Women's Hosp.

Dr. Tuli had filed suit against her chief of neurosurgery for discrimination.  The hospital credential committee ordered her to have a psychiatric evaluation.  She sued to prevent this and won.  The court ruled that there was "inappropriate animus" by the committee.  The physician supposedly had complaints against her but the court had problems with the fact that the chief had been the source of the facts regarding the problems.  The case against the chief and the hospital goes forward.

Gentiello v Rege
ND Texas

The physician complained to his boss on the level of care of the hospital.  The physician was demoted for criticizing the Parkland Hospital quality of care.  He sued his chief for retaliation due to the comments he made and for bad faith peer review.  He lost on the First Amendment issue due to the conversation with his boss was not protected speech but won on the bad faith issue.  The trial will be coming.  

DePasquale v Chamberlain
Tenn Ct App

The physician and the group agreed on a settlement where the physician would be paid $49,000 when he left the group but conditioned on certain conditions.  The group felt the physician did not meet the conditions and did not pay.  Dumb group.  The physician sued and not only won the money but all his legal fees as well.  They also had to pay their own attorney fees.  Attorneys love idiots that stand on principle.      Top  


Kansas City Urology v UnitedHealth
Mo Ct App

The court of appeal ruled that the physicians must arbitrate their disputes with the insurer as provided in the contract instead of suing.  The decision was unanimous. The physicians had contended that the Blues, Coventry Insurance and UnitedHealth conspired to keep the payments to physicians down.  The entire case will be heard in one arbitration.        Top


Lozoya v Anderson

The patient was visiting the area and suffered a severe shoulder fracture.  He went to the ED and was given a sling and meds but refused the patient's request to see an orthopedic surgeon or be referred to a larger hospital.  She sued for negligence and EMTALA violations.  The court refused to give summary judgment to the hospital on the EMTALA issue since there needed to be more information whether there might be deterioration of the patient's condition post hospital discharge.  The second complaint was dismissed with leave to amend after the plaintiff did not have an expert witness for the negligence.        Top


Mo. Med Assn v Missouri
Missouri Supreme Ct.

The lower court had invalidated a state statute legalizing midwifery.  The Supreme Court reversed the above since the medical association did not have standing to challenge the statute.

Mahnke v Med Board
Nebraska Supreme Court

The physician is a FP and did a D&C on a patient that miscarried.  The patient bled post op, had a cardiac arrest and died. This was the only complaint ever on the physician.  The Med Board alleged unprofessional conduct and suspended his license for 30 days.  He sued and the Supreme Court stated that the locality rule should overrule the national standard.  The med board failed to present clear and convincing evidence against the physician and the law does not allow the discipline of a physician for a single act of ordinary negligence.  There needs to be a pattern.        Top      


Pharmacists v California

The California pharmacists sued for an injunction stopping the state from imposing a 10% reduction in payments to them for filling Medicaid prescriptions.  The 9th Circuit agreed and then two weeks later reversed itself.  The legal case will now go forward quickly.  In the meantime the legislature is revisiting its poor decision.  The new law being considered is instead of a 10% cut for all providers there would be a 5% cut for pharmacists and a 1% cut for physicians and dentists.  Small pharmacies are now directing patients to the chains to get their prescriptions filled.     

Providers v California
Superior Ct

The Los Angeles Superior Court refused to issue an injunction against MediCal reducing payments to providers by 10%.  This means many less services available for the Medicaid population.       Top


Planned Parenthood v S. Dakota
8th Circ

South Dakota enacted a law to force physicians to at least two hours prior to an abortion read the patient a script that the patient has an existing relationship with the fetus and that abortion increases the risk of suicide ideation and suicide.  The patient must say in writing that she understands.  Planned Parenthood sued and the 8th Circuit upheld the speech by withdrawing an injunction on its enactment.        Top

Peer Review

Poliner v Presbyterian
5th Circuit

The 5th Circuit using HCQIA and the HCQIA lack of payment of damages as the rationale reversed the entire award to Dr. Poliner for defamation.  They entered a verdict for the defendants.  I agree the verdict was outrageous for the short time his privileges were restricted and for the low amount of lost income but I do not see how HCQIA can overcome defamation which is the same as malice.  The Court states that the good or bad faith of the reviewers is irrelevant.  This makes any challenge to any decision by any peer review body an exercise in futility.        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.