August 1, 2016 Recent Legal News






Peer Review and Employment




US v Harrington

W. Scott Harrington of Tulsa, a former oral surgeon plead guilty of fraud for billing for Medicaid anesthesia services actually provided by unlicensed people.  He was sentences to six months house arrest.  He had two clinics in the Tulsa area that were shut down for unsanitary conditions.  He had previously surrendered his license.  

US v Columbia University

The university agreed to pay $9.5 million to settle allegations that they lied to the NIH in their cost reports.  The feds are cracking down on the academics for grant money abuse.

US v Patel

Kirtish and Nita Patel had pled guilty in criminal health care fraud and were up for civil penalties.  They tried to defend the civil case but were not allowed to do so since they had already said they were guilty in the criminal cases on the same set of facts.  The government won summary judgment in the civil case.

US v Bayou Shores SNF
11th Circuit

The nursing home was found wanting and were about to be closed down.  The home sought to enjoin the termination agreement but were refused for failure to exhaust administrative requirements.  they then sough bankruptcy protection but again were denied since the court did not have jurisdiction and they did not have standing due to the not following administrative requirements.  The 11th Circuit agreed with the non standing.

California v Bristol Myers

The company has agreed to pay the state Department of Insurance $30 million to settle allegations of widespread inducements to physicians to use their products. 

Sidibe v Sutter Health
9th Circuit

The 9th Circuit reversed a lower court and reinstated a suit against Sutter Health.  The complaint alleges that Sutter engaged in anticompetitive conduct by imposing illegal tying arrangements for all their products and hospitals.  They also allege Cutter stopped health plans from using lower cost providers and making plans pay more if they left out Sutter providers.  The lower court said that the geographical restrictions were implausible.  The 9th did not agree as this was only in the pleading stage.

US v Esformes

Phillip Esformes, Odette Barcha and Arnaldo Carmouze of Miami were indicted for health care fraud.  they were accused of a $1 Billion scheme of defrauding Medicare and Medicaid by admitting patients to nursing homes and assisted living facilities that were not qualified by need.  There were kickbacks alleged and one should expect many more indictments in the future including many physicians.  Esformes had paid $15.4 million in 2006 for the same thing.  This must be really lucrative and the feds are not recouping enough.

US v Prefered Imaging

The Dallas company paid $3,510,000 to resolve allegations of performing intravenous dye procedures without physicians on site as required by law.  This was a qui tam allegation and the former employee will get $596,700.

US v J&J

J&J will pay $18 million to settle a qui tam suit alleging false claims for marketing and distributing its sinus spacer without FDA approval.  This civil complaint follows a criminal trial were Acclarent's CEO William Facteau and Vice President of Sales Patrick Favian were convicted in a jury trial of introducing adulterated and misbranded medical devices into interstate commerce. The qui tam individual will get $3.5 million. 

US v Villamil

Dr. Fernando Villamil of South Miami, a psychiatrist, was sentenced to over 12 years in prison for making false claims with fraudulent diagnoses as well as getting kickbacks.  he also has to repay $50 million.


UPMC has agreed to pay the feds a $2.5 million fine for filing false claims for services not rendered, unnecessary surgery and regular false billing.  This was a qui tam suit filed by surgeons and surgical techs.  All this was done in the neurosurgical department.  It seems the department was doing a bunch of shady stuff and got its hand caught in the cookie jar.  

US v Lexington Medical Center

The South Carolina hospital agreed to pay $17 million to settle allegations that they paid 28 doctors high prices for their practices to ensure continued referrals.  The case made no sense since bought physicians are usually told where to refer patients.  This suit was started by a physician whistle blower who will receive $4.5 million, probably much more than any purchased physician.  He said that after he was purchased the hospital gave him a hard time due to his continuing to refer MRI patients elsewhere.  The hospital need a new legal team or a new CEO who will listen.        Top


Ousterout v Zukowski
ND Ill

The two physicians, Douglas Ousterout and Mark Zukoswki sued each other for defamation since they were taking each others patients in the lucrative field of facial feminization surgery.  During depo Ousterout sought medical records of four of Zukowski's patients to show he pilfered them.  The court ruled the records were privileged since the patients had not consented.  The patients had previously submitted affidavits regarding their care so it was not an open and shut case.  The court went on to deny Zukowski the use of the affidavits in court unless he received his patient's consent for disclosure.  

Vermont Alliance for Ethical Healthcare v Vermont

Two organizations have filed suit against the state for its physician assisted suicide law.  They say the law states that physicians must counsel patients about the option to commit suicide.  If they do not they must refer them to someone who will.  They say this violates the First Amendment and some aspects of Obamacare.  The maker of the law says the law has no referral in it but this is a figment of the agency that came up with a Patient's Bill of Rights.  This states requirements are different from the other states that have passed physician assisted suicide.        Top


Patients v Providence Health
To Be Filed

Oregon's Providence Health has announced that 4500 patients have had their identity put at risk due to a former employee improperly accessing the records.  

Patients v Kaiser
To Be Filed

Kaiser has announced that a former employee stole the medical records of 1100 patients.  Some have been returned but not all.  

Hansen v Montana

David Hansen, a former auditor of the state Department of Public Health, and another were fired for releasing PHI to state legislators upon their request.  The information was on 185 childcare providers including SSNs.  Hansen is now contesting the firing via his union.

Employees v Memorial Hermann
To Be Filed

The hospital has told their employees that information was disclosed to a select few physicians. The hospital physician network received information from Memorial Hermann Health Solutions and forwarded the illegally obtained information to physicians to contact patients and get more business.  

Patients v StarCare Specialty Health
To Be Filed

The Lubbock, Texas, hospital had five laptops stole.  One had PMI that could be accessed.  Dumb hospital.

Patients v Denmark
Will not be Filled

Denmark had a breach of protocol when an infectious disease research institute sent a letter containing PMI of the entire Danish population to a Chinese visa office in Copenhagen.  They meant for the data to go somewhere else but it didn't.  The Chinese gave the information back.        Top


US v Chiarottino

Dr. Michael Chiarottino of Marin County, California, was sentenced to three years in prison and 5 year probation with no ability to treat patients.  He was convicted of prescribing oxy and other drugs without a good faith exam.  He had lost his license in California after being arrested for driving under the influence.

US v Cesar

Dr. Shannon Ceasar of Metairie, Louisiana, was arrested for unlawfully prescribing drugs to patients.  He made matters worse when he threatened to kill a DEA agent.  He has not been released on bail.        Top


Jones v MetroHealth Medical Center
Ohio Ct App

The court upheld the constitutionality of caps on noneconomic damages in medical malpractice suits.  The caps on publicly owned and supported hospitals such as the one noted is $250,000.  This reduced the jury verdict of $14.5 million for a bad baby to $3.45 million. 

Klemish v Vallacastin
Fla Ct App

The court ruled that the Kindred Hospitals East arbitration agreement is void as against public policy because the illegal portions cannot be severed from the whole.

Patients v UPMC
Penn App Ct

The court reinstated med mal suits against the hospital and a staffing agency for a technician using Fentanyl and refill the syringes to inject into patients.  The patients got not Fentanyl but Hepatitis.  The hospital did not report the technician to the DEA.

Patients v Australia
Not be Filed

Two babies at Bankstown-Lidcombe Hospital in New South Wales had nitrous oxide instead of oxygen administrated.  One died and the other is in serious condition.  A gas company had incorrectly outfitted an oxygen dispenser.  The families were apologized to and they will be offered support by the Ministry of Health.

Patients v Fata

The victims of Farid Fata, the ? oncologist who treated patients with chemo for no reason, are still getting screwed.  About 40 patients sued for med mal and are only getting a total of about $8 million settlement.  The ?oncologist had low med mal insurance limits which was legal.  The plaintiffs also sued several hospitals who kicked in some money.  There is still a $17 million fund to be distributed to all the victims not just the ones that sued for med mal.

Patients v Bayer

A federal judge ruled that the expert for the patients suing Bayer for its Mirena intrauterine device was barred from testifying.  The judge says the experts had no scientific basis for their opinions and the opinions were only for the case.        Top

Peer Review and Employment

Pal v Jersey City Med Center
3rd Circuit

Dr. Neelu Pal resigned from Robert Wood Hospital where she was a surgical resident after she found out her contract would not be renewed.  She sought privileges at Jersey City but her application was denied.  He sought but lost hospital review of the decision and she had a NPDB report filed.  The decision to deny was due to negative references.  She sued fro discrimination and retaliation and won $1.6 million even though no retaliation was proven.  She filed a second suit against UMDNJ and JCMA and she lost here.  The court stated that there is no law that an individual has a legal right to a positive recommendation.  HCQIA barred any damages and she failed to rebut the standard.  She should have stopped while ahead.        Top


US v Cigna, Aetna, Humana, Anthem

The feds have filed a suit to stop the mergers of Anthem and Cigna as well as Humana and Aetna.  They say the mergers would harm consumers by increasing premiums and reducing competition.  The mergers would cut to three the number of major insurers in the country, UnitedHealth is not part of this.  The court cases should be interesting if they ever come to that.

Wieland v US

In another twist in this long running case the district court judge ruled that the administration can not force Weiland and his family to carry health insurance that includes contraception.  The Weilands are Catholic and oppose the use of contraception.  They get their insurance via a state group health plan that is mandated to provide the coverage.  This is another nail in the coffin of the Obamacare birth control mandates.  The feds claimed in the court that requiring the Wielands to subscribe to a plan that covers services that they wont use because of religious reasons isn't substantial.  The court said otherwise.  The law requires that the Weilands either accept insurance that they do not agree with or drop it and be fined.  The judge said that individual should be able to check a box to opt out of the contraceptive coverage.  A year ago the 8th Circuit ruled the Weilands had standing to sue reversing a lower court.        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.