December 1, 2016 Recent Legal News



Peer Review and Employment




US v Zwanger-Pesiri, Inc.

The NY radiology company plead guilty of fraud for billing for procedures not ordered by treating physicians.  The company agreed to pay $2.4 million in restitution for the criminal case and pay $8,153,000 to resolve the civil charges.  The company bundled the tests so that when a physician ordered one test another would automatically be performed as well.  This all stemmed from a qui tam.

US v Family Medical Center of South Carolina
D SC  

The med center filed a motion to dismiss in the court.  The US stated that the center paid employed physicians directly attributable to the volume of referrals, an illegal act.  The US also claimed the center also ordered unnecessary lab tests.  The court found that the feds had alleged sufficient facts to overcome the motion to dismiss.  

US v Norbergs

Dr. Diana Norbergs, a retired Palm Harbor, Florida, oncologist, was found guilty at a trial for buying unapproved caner drugs and billing fed med for the high price spread.  She was found guilty on all 45 charges against her.  She made the mistake of trusting her business manager and believing all the drugs were FDA approved.  They had strange names and some in foreign writing.  She also signed checks written to the Canadian company.  She had had warnings from the feds on two occasions but continued to buy the unapproved drugs.

US v Brian II

Dr. Washington Brian II of Los Angeles, was convicted of federal structuring charges to get around federal reporting requirements. He was found guilty of 29 counts of making illegal cash deposits.  He would make deposits of less than $10,000 to different bank accounts, some the same day.  He got the money from writing prescriptions for narcotic painkillers and HIV meds.  He was paid $500 cash for each patient visit for prescriptions.  

US v Svadjian

Dr. Tigran Svadjian, purchased in 1986 the Southwest Medical Group from a sleazy character who was doing fraud.  The feds came after Svadjian who agreed to cooperate and wear a wire.  He stated he needed to visit his mother in Russia first and while there died.  He was cremated and his ashes were given to his wife.  Ten years later he surfaced in Egypt, the country of his father.  He had been living there working as a scuba instructor but got a girlfriend pregnant.  When he tried to join her in Russia he was found out and returned to Egypt where his fake names and passports were found.  He has been sent back to LA where he remains in jail awaiting trial.  The original charges carried a 10 year sentence but the statute of limitations has run out and he is now being charged for unlawful flight to avoid prosecution.  That carries a 5 year penalty but that may also be reduced.  When arrested he had $2000 cash and $10,000 in a bank account.  His girlfriend had $260,000 but this was not attainable.  His US wife, now ex-wife, fought off the feds attempt to sell the Newport Beach house.  His assets of about $63,000 were divided among the family but the FBI believes his ex-wife emptied out a Swiss bank account with $3 million.   

US v Emeritus Corp

The assisted living organization agreed to pay about $1 million to settle allegations that they failed to refund required refunds to Medicaid.  A former employee turned them in.        Top


Consumer Watchdog v Anthem Blue Cross

A judge ruled the insurer could continue switching people into health plans with no out of network coverage.  The consumer group wanted a TRO which the judge would not issue.  The insurer is switching the PPO consumers to an EPO without telling them about the decreased coverage.  The judge rightly ruled that the group lacked standing as they had no losses.

Centinela Freeman Emrgency Medical Assoc v Health Net of California
California Supreme Court

The HMO delegated payments for required ED services to IPAs.  The IPA became insolvent so the physicians were not paid for their services.  The physicians sued the HMOs for negligently delegating to those IPAs and negligently failure to continually monitor the IPAs ability to pay.  The trial court allowed the HMO demurrer but the court of appeal reversed.  The Supreme Court agreed with the physicians that the physicians had pleaded colorable claims.  The HMOs owed the the providers of service a common law duty.  The HMOs delegation to the IPAs was intended to affect the providers; the HMOs knew or should have known the IPAs were struggling therefore the harm was foreseeable; the injury is not disputable (non-payment); the delegation was closely connected to the injury; the conduct of the HMOs was morally blameworthy and acknowledging the common law would advance the public policy o preventing future economic harm.  The court went on to say the the physicians have a better chance at the initial delegation rather than the continuing monitoring since the HMO might rely on the state managed care rules.        Top

Peer Review and Employment

Coastal Anesthesia v Crestview Hosptal
Fla D Ct App

Initially Coastal sued Crestview for defamation and won $2.15 million.  The appeals court reversed due to the jury instructions failed to require proof of express malice.  The CEO had complained to the Group about a physician due to disruptive behavior but never investigated the complaints prior to the complaint.  The group terminated the physician but then allowed him to resign.  The physician sued the hospital and the CEO for defamation.  The appeals court said the hospital had a conditional privilege to speak with the Group about the physician and to overcome that privilege the plaintiff had to show express malice.  

Elkharwily v Mayo Holding
US Supreme Court

The physician was terminated and sued stating the employer terminated him for retaliation for refusing to authorize a transfer of an unstable patient under EMTALA.  The hospital said the terminate him for poor performance.  The court noted that he wrote to the Minnesota Medical Board and that writing directly contradicted his EMTALA claims.  The 8th Circuit agreed with the lower court that the physician's case should be dismissed.  The US Supreme Court refused to take the case.

George v Christus Health
La Ct App

A neurosurgeon sued for his former employer for treating him disproportionately with respect to other employed physicians.  He sought evidence to see if the hospital treated other physicians with the same peer review processes prior to termination.  The hospital sought a protective order regarding the asked for information.  The lower court granted the immunity.  The court of appeals reversed since a member of the peer review committee stepped outside of his or her duties.  The case was remanded to trial court to determine whether each item sought was covered under the state's statutes.

Nutter v Thomas Memorial Hospital
West  Virginia Supreme Court

The state high court reversed a $1 million verdict for a nurse who claimed to be wrongly fired from the hospital.  The court stated in its majority opinion that the trial judge should have dismissed the case prior to trial for lack of evidence.  They said there was no evidence of emotional distress nor wrongful discharge and also found the defamation was barred by the statute of limitations. 

Ohifs v Advocate Christ Medical Center

 Dr. Brett Ohifs, an ED physician at the hospital claimed the hospital fired him for retaliation of reporting another physician was harassing female residents.  He was hired in 2004 was told by some female residents that Dr. G, a married attending, had propositioned the women and showed pictures of himself having sex with the women.  He reported the information in 2011 to the head of the ED who became furious and told him never to mention it again.  The head said that the predator was not identified and he had not enough evidence to open an investigation.  Several month later he reported the name of the predator to the head.  He states at that time he was told he could either resign or be fired.  He was fired several months later without cause.  A state agency investigated and found substantial evidence of retaliation.  During deposition, several female residents stated they heard of the propositions by Dr. G and one said she was propositioned by him.  He won $1 million.

Becker v Rockwood Clinic
US Dept. Labor Judge

The judge awarded Gregg Becker, the former CFO of the Spokane clinic $1.9 million for being fired for retaliation.  He had refused the clinic's directive to falsify his projections of the clinic's projected losses.  The parent company, Community Health Systems may appeal.  There will be a separate state trial next year.  Watch for a settlement.

Smothers v VA Health System
To Be Filed

Whistleblower Brian Smothers states he resigned after being put in an office with no computer with no duties and no social contact.  He also states the VA had opened two separate inquiries into his actions and tried to force him to sign a statement that he had broken VA rules.  He had aired the problems with the Denver VA and their wait lists.

Armin v Riverside Community Hospital
Ca App Ct

Dr. Sean Armin said he was discriminated against due to religion and whistleblowing and was kept off the ED call list.  He was being peer reviewed at the time of filing suit against the hospital and two physicians.  The trial court ruled his whistleblowing claim was not ripe as he did not complete the peer review hearings at the time of the filing.  His religion discrimination could go forward as it was not protected by the anti-SLAPP suit.  The Appeals court ruled that he could file suit prior to the end of the peer review hearing so the whistleblowing part could go forward.  They also said the two physicians could not be sued under the whistleblower statute as only the hospital and hospital staff could be sued.  They also agreed with the trial court that the religious discrimination claim could also go forward.          Top


Patients v Horizon BCBS
To Be Filed

The insurer got its third breach in under three years.  This time a business associate sent EOB and payment statements to the wrong individuals.  This put PMI of about 170,000 at risk.

US v St. Joseph Health

The system had files containing PHI publicly accessible for over one year.  They agreed to pay a fine of $2.14 million for their carelessness and stupidity.  They did not follow security or do a comprehensive risk analysis with a new server which allowed anyone to view information.  

Patients v Aetna
To Be Filed

About 3000 people have had their information potentially compromised due to a CD being sent and not arriving at its destination.  The envelope it was sent in did arrive.  

Patients v Berkshire Medical Center
To Be Filed

The personal info of the Center's cardiology patients were found on a thumb drive of a former employee of an outside vendor.  He had emailed the information from his company to his own email.

McNair v City and County of San Francisco
Ca App Ct

McNair sued Dr. Kim and her employer for disclosing to the DMV that McNair had a cognitive disorder and he lost his commercial license.  The trial court granted summary judgment to the employer and the higher court agreed.  They said that HIPAA is not an exception to the litigation privilege because they do not mandate the absolute confidentiality.  

Bradley v CNN

Alexander Bradley has filed suit against CNN for showing pictures of him when he was admitted to a hospital after being shot by for New England player Aaron Hernandez.  These pics were shown in a documentary aired on CNN.  He denies any authorization allowing the pics to be taken nor aired.          Top


Frazier v Delaware Nursing Board
Delaware Superior Ct.

Amanda Frazier a LPN at Kentmere Nursing Center was investigated for errors in distribution of medications.  She eventually resigned and went before a hearing at the state.  The hearing officer recommended suspension of not more than six months but the nursing board suspended her for two years.  She sued stating the conclusion that she engaged in unprofessional conduct was not supported by the evidence.  The court disagreed and also said the Board was allowed to modify the hearing officers conclusion of law and proposed sanctions as long as it was a rational decision based on the written record.        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.