August 15, 2012 Recent Legal News


Peer Review and Employment







Watts v CoxHealth
Missouri Supreme Court

In a 4-3 decision the Missouri Supreme Court overturned the 2005 law on non economic damages signed by the Governor in 2005.  The law limited these damages to $350,000 but the jury in this bad baby case awarded non economic damages of $1.45 million.  The ruling does not affect cases where people die.

Norfleet v Harbor Hospital
Jury Verdict

In another bad baby case a Baltimore, Maryland jury has awarded the plaintiff $21 million.  The child was born with cerebral palsy.  Two months ago another jury in a similar case awarded the plaintiff $55 million.  Both were represented by the same law firm.  In this case there were no signs of oxygen deprivation immediately after birth, just prematurity.  This will be reduced, if not appealed to $20.62 million due to a cap on non economic damages.  Watch for less OBs to continue.

Patients v Greenville Hospital System
To Be Filed

The South Carolina hospital has warned 11 neurosurgical patients that a patient had Creutzfeld Jacob Disease and the WHO recommendations for sterilization were not followed as the hospital did not know of the diagnosis until much later.

Patients v Gerald Champion Med Ctr.

The New Mexico hospital had about 80 med mal claims against it and declared bankruptcy.  The settlement for $33 million allowed the hospital to come out of bankruptcy.  The med mal claims were for the use of a glue like substance that was injected to act like a disc was unsafe and ineffective.  The physician doing the injection was an anesthesiologist and had been reported by a nurse to a supervisor but was told to let it go.  When an insurer questioned the procedure and the qualifications of the physician the hospital threatened to sue the insurer.  Several years later the patients began having problems and started suing.  Another physician, a neurosurgeon, settled for $11.8 million earlier this year.  When deposed the anesthesiologist, Christian Schlicht, pled the 5th and answered no questions.  He is now a lieutenant colonel flight surgeon in the Air Force.  

Mead v Legacy Health
Oregon Supreme Court

The high court ruled that a neurosurgeon that gave advice over the phone to a ED physician may or may not have caused a physician patient relationship to be formed and the trial court was correct in denying the patient a directed verdict on this issue.  However, the court gave erroneous jury instructions and therefore a new trial is in order.        Top

Peer Review and Employment

Granger v Christus Health Central Louisiana
La Ct App

The hospital MEC summarily suspended Dr. Granger but did not follow their bylaws and therefore were not allowed the benefit of HCQIA protection.  A trial was held and the jury awarded the physician damages of $3.9 million.  On appeal the hospital lost the HCQIA battle again since the jury found they did not follow their own bylaws and did not act in the belief that it was furthering the quality of care.  They also found the hospital was acting with, can you believe a hospital would do this, MALICE.  This meant the hospital lost the protection of the Louisiana peer review statute as well.  The court decreased the award to $2.894 million.  Where was the hospital attorney or the medical staff attorney in all this?

Moore v John Deere Health Plan
6th Circ

Dr. Moore was terminated by the HMO and sued.  The HMO asked for summary judgment and this was granted under HCQIA.  The 6th Circuit agreed since some patient complaints were against the physician and not the clinic where he worked.  They also dismissed his state law claims.

Tate v University Hospital of Southern Nevada
9th Circ

The trial court and the 9th circuit both agreed that the terminated physician from on call trauma service did not infringe on either equal protection since the removal from only the trauma call was not a protected area.  There was no due process claim since the contract allowed dismissal for no cause.  Since there was no suspension the other claims were also dismissed.

EEOC v Banner Health

Banner Health breached an agreement with an employee who was covered under the ADA.  He complained to the EEOC who settled the discrimination claim for $255,000.  As I said in the last newsletter, Banner seems to be sued a lot by various individuals for multiple reasons and they seem to settle or lose a lot.  Maybe it is time for people to start looking to see if the organization that one that you want to work for. 

Warwas v City of Plainfield
3rd Circuit

The court ruled that an employer does not have to keep an employee who is abusing FMLA rules.  The plaintiff, a physician, was the Plainfield, New Jersey, health officer in 2003.  She requested sick leave and after having a physician examination the leave was granted.  While on leave she worked part time for Patterson, New Jersey doing the same job she was hired to do in Plainfield.  She was therefore terminated by Plainfield in 2006 and she had the gall to sue.  The courts upheld the termination since she was doing work she was deemed she could not do by her and her physician.  Misuse of the leave is a cause for termination.       Top


ACLU v Arizona
9th Circuit

Less than two weeks after a trial judge granted the state the ability to ban abortion after 20 weeks the 9th Circuit reversed and placed an injunction on the ban.  This may make it to the US Supremes.    

Nurse v State Board Of Nursing
California Supreme Court

A nurse was stopped for DUI and then the Board put the nurse on probation for three years.  He sued and lost in all courts.  The Supreme Court refused to take the case from the appellate court that ruled the Board has the right to discipline a nurse for an incident unrelated to the job.   

Newland v Sebilius
D Colo.

Newland, a Catholic corporation, sued and won an injunction against CMS for the mandatory contraception rule.  The judge ruled that the CMS has given so many exceptions that they will not be harmed by the injunction but the corporation may.      

Jones v NMS Health of Hyattsville
D Md

The court has allowed a rare tort of false imprisonment to go forward.  The patient was in a rehab center and was allegedly transferred to a long term care facility without consent.  The patient died several months later and the estate sued for multiple causes of action which were dismissed except for the false imprisonment as the long rehab could not prove the patient had consented. The court found the patient was transferred with the notification of any family even though they had been instructed not to transfer without notification.  The rehab also was found to have actively hid the transfer from the family.   

Physicians Hospitals of America v Sebelius
5th Circuit

The Circuit Court denied a district court ruling the said the Texas Spine and Joint Hospital could continue with it's building in spite of the Obamacare provision that stopped further physician hospital construction.  The court ruled the district court did not have jurisdiction to hear the case since the hospital had never sent a claim.  In order to send a claim and have it denied so it could sue the hospital would have to complete the hospital and have it sit basically empty losing millions of dollars. The plaintiff are considering an appeal to the US Supreme Court.   Top


Los Angeles v Wyatt

Dr. Lance Wyatt, who bills himself as the plastic surgeon to the stars, has been arrested for filming his patients disrobing and for touching in non medical necessary ways.  He is free on $50,000 bail.    

US v Bennett

Dr. Mathew Bennett of Tonawanda, New York, was arrested on illegally selling narcotics.  He is out on a non financial bail and the DEA is attempting to have his license suspended until trial.      Top


US v Goldman

Dr. Eugene Goldman of Philadelphia has been indicted on kickback charges.  He is accused of accepting kickbacks for referring patients to a hospice in the past.  The physician's attorney states the physician referred patients from his private practice and was paid for his work as the medical director of the hospice agency.

US v Mayo Clinic

The Clinic has agreed to pay a settlement of $1.26 million to settle charges of billing the government for lab tests never done.  The tests never done were permanent tissue slides on frozen sections.  This was done on over 10,000 samples.

US v Dartmouth Hitchcock

The hospital agreed to pay $556,000 for neurologists over billing. Seven billed for services not rendered.    


The DOJ in investigating HCA's Florida operations of cardiology practices.  They are looking into the medical necessity in ten of their hospitals in interventional cardiology.   

US v North East Medical Services

The feds have joined a whistleblower suit against the San Francisco federally funded quality health center.  The accusation is they lied about how much they received from a managed care organization so they could state they got more from Medicaid.  The organizations would get more money doing this since they get more than the regular Medicaid payments.  

Nevada v Renown Health

This involved the consolidation of two Reno cardiology groups that were purchased by Renown Health.  This made 88% of the cardiology in the area in one practice.  The FTC filed against the organization as did Nevada.  They specifically looked at the non compete clauses which made competition impossible if any of the cardiologists left the group.  One of the conditions of the settlement was that six cardiologists could leave without the non complete applying to them.  Renown also has to pay $550,000 for reimbursement for the state's costs.  The FTC is also looking to settle the case. 

US v Adventist Health
MD Florida

The health care company wanted a summary judgment and this was denied in a qui tam case bought by a compliance officer and a physician.  They alleged the system cheated by billing for using equipment never used and for higher doses of chemo than actually given.  The reason the summary judgment was not allowed were the two were insiders participating in meetings where the cheating was discussed.

Gonzalez v Fresenius
5th Circ

This is a great case to show the finagling of an attorney and the gullibility of a physician.  The physician sued the dialysis center for false claims.  In discovery the physician said there was not any coercion by the center.  The attorney put in an errata list of 101 mistakes essentially gutting the physician's depo.  The center got to re-question the physician where she agreed with her original complaint and then at trial reversed herself again.  She testified that the attorney guided her complaint and changed her depo testimony.  The court not only tossed the case as a matter of law but assessed attorney fees against the plaintiff attorney for bringing a case that he knew had no basis. 

US v Baker

Dr. Jack Baker of Houston was charged with illegally paying physicians to refer to his MRI.  He agreed to pay the government $650,000.  He also voluntarily agreed to a 6 year suspension from Medicare and Medicaid.  This was a whistle blower case from a competing MRI center.        Top


Parsons v Sisters of Charity 
9th Circuit

The plaintiff was in a clinical trial on bone marrow transplants.  Her health plan refused to pay because the treatment was experimental.  She sued and lost in the trial court and in the appellate court since the trial was approved by the FDA but had not received final approval.        Top


Patients v Hartford Hospital
To Be Filed

Hartford Hospital in Connecticut has done the unthinkable.  They had patient information on 10,000 people on an unencrypted laptop.  The laptop was stolen from a subcontractor's home.  They are paying for two years of free credit checks and fraud alerts.  They should also receive a fine from the OIG for this.


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.