December 15, 2003 Recent Legal News



Fraud and Abuse



Product Liability



Peer Review



Silvia v Penrose Hospital

Employment or malpractice?  Silvia, a nurse at Penrose Hospital was injured while moving a patient.  He suffered a herniated disc in his lower back.  His physicians felt he needed surgery sooner rather than later but the hospital deled the surgery for almost three months.  The self insured hospital did this to allow Worker Compensation to look at a neck injury that occurred in 1981 while he was working as a police officer.  This had no relation to the current back injury.  Silvia now has a foot drop and needs special devices to help him sit for periods of time.  The jury was out only 90 minutes before coming back with a verdict of $5 million in compensatory damages and $5 million in punitive damages for their outrageous conduct in the delay of the surgery.  The hospitals gatekeeper occupational medicine physician saw the MRI which showed the badly damaged disc but prescribed epidural injections instead of the needed surgery.  This was the turning point for the jurors.  The hospital will appeal stating this is a malpractice case and should be governed by the payment limitations under Colorado tort reform law. 

Tenet v Bedrosian
CA Ct. App.

The California Ct. of Appeals reduced the amount Tenet is to pay a former executive from $253 million to $148 million by changing the date from which interest is owed.  NME, Tenet's predecessor failed to provide Bedrosian with stock benefits when he was terminated without cause in 1993.  The new date assumes Bedrosian would have sold the stock six months later that the trial court, thereby reducing the total damages.  

Methven v McLaren Med Management
Mich. Ct. App.

An employed physician was fired but the company did not follow their procedures.  The jury awarded the physician $178,225 for the breach of contract claim.  This was limited because the physician could not prove with any certainty that he would still be unemployed after a certain date.           Top


Ciechanowski v Med. Society of NJ

Dr. Ciechanowski, the former medical director of a hospital in New Jersey had come out against the Medical Societies malpractice reform.  He was ousted from his position and lost most of his referrals.  He is now suing the medical society and its president for sending emails stating he should lose his referrals as a pulmonologist.  If the society really sent emails targeting the physician they should be punished but the law suit will only make the physician lose more referrals. All must take the consequences of their actions.

Joslin v Blue Cross

Joslin, the CEO of Doctors Medical Center in Modesto, California, has filed a defamation suit against Blue Cross. Blue Cross originally released a study performed by them showing the hospital's cardiac care was not up to snuff.  Based on that study, Blue Cross stopped covering bypass surgery at the Modesto hospital and threatened to stop covering any care at the hospital unless the hospital made improvements.  The threat was then rescinded as a result of "constructive and collaborative discussions" with Tenet and its Modesto hospital.  The suit details flaws in the study and states the release is wanton and malicious.  Blue Cross' study stated that 13 of 23 heart surgeries were medically unnecessary.  Tenet then did its own study using independent people who found that all 23 cases were medically necessary. 

Miller v Tope
DC Mass.

A physician sued her former residency chair and her former program director for defamation.  She lost against the chair since his remarks to the medical board were protected opinion and the physician failed to produce enough evidence to show malice on those elements that were not opinion.  The program director made factual assertions which were not protected opinion and the physician showed enough evidence for malice in the statements to the board.  Any way you cut it, the program will pay.

Nichols v Pikeville United Hosp
Ky. Ct. App.

 A physician sued the hospital for sending letters to two other hospitals summarizing the hospital's investigation of the physician. The physician lost since he knew about the letter and signed a release allowing the hospital to release the information.  The backdrop of this case is that he is an orthopedic surgeon who agreed to a loan if he stayed at the hospital for three years.  After one year he developed a staph infection and immediately stopped doing surgery.  Six days later, he was cleared by the hospital's infection disease physician to resume surgery.  Eight patients filed suit against Dr. Nichols for infecting them during surgery.  The state investigated and substantiated the infections.  The MEC then stated they would look at his cases by the infection control people.  He resigned from the hospital and was being sued for the return of the loan money.  He claimed he was wrongfully terminated but he was an independent contractor.           Top

Fraud and Abuse

US v Cooper University Hosp.

Cooper University in Camden NJ agreed to pay $476,544 to settle improper payments due to PATH audit.   

US v Metropolitan Health

The Michigan hospital has agreed to settle a whistleblower suit for $6.3 million.  The original suit was against the hospital, its group medical practice and its management company.  The suit claimed the hospital paid over fair market value to isolated physicians to interpret vascular studies.  The hospital also paid too much for a practice purchase, undercharged for office rentals and billed for some services without proper documentation. 

Modern Healthcare has an article stating the government will look at leases by hospitals from urologists for lithotripsy for kickback violations. If the urologists are using their clout to obtain a favorable lease, the government will go after them.  The underlying problem is that Medicare states that lithotripsy is a hospital procedure when all know that it's not.  This problem will be moot in the future as the new outpatient DRG payments have kicked in.           Top


Bush v Columbia Med Center of Las Colinas
Texas App. Ct.

The Texas Ct. of Appeals upheld a lower court ruling of $13 million against the hospital for malpractice based on the ordering of an ED physician and the giving by a nurse at the hospital of Verapamil.  Bush was in ventricular tachycardia and the drug is potentially lethal in those patients with tachycardia.  Bush went into cardiac arrest after receiving the drug and suffered severe brain damage.

Darviris v Petros
Mass. App. Ct.

Plaintiff had a hemorrhoidectomy by defendant.  The pre-op consent form authorized a fissurectomy.  Plaintiff admits to not reading the consent. In recovery the patient was told a hemorrhoidectomy and not a fissurectomy was done.  There was significant pain and a second surgery was necessary.  Three years later, the plaintiff sued for battery, failure of informed consent, a violation of the Massachusetts patient's bill of rights.  The plaintiff claimed that since the defendant did not comply with the existing statutes, he committed unfair trade practices.  The defendant appealed re the statute of limitations.  The court agreed.  The Court of Appeal affirmed.  The time of the start of the running of the statute was not when she found that the surgery caused an injury but when she found out in recovery room after the first surgery that the unconsented to operation was performed.  The court when on to state that while a physician may be negligent in failing to obtain informed consent, such actions do not constitute an unfair or deceptive practice.    

Turner v Southwest La. Hosp.
La Ct. app.

 The divorced parents of a child who died during shoulder surgery sued the physician.  The cause of death was never proven.  The physician settled with the parents for his maximum policy limit of $100,000.  The parents then sued the Louisiana Patient's Compensation Fund for excess damages.  The fund settled with the father for $250,000.  The mother's suit went to trial and she was awarded by the jury $10 million.  Louisiana has a $500,000 cap in med mal cases.  The trial judge awarded the mother $400,000 taking into account the previously paid $100,000 by the physician.  The Fund appealed and the Ct. of Appeal stated the total was only to be $500,000, so reduced the mother's award to $150,000.      

Brown v Warren
Miss. Ct. App.

Brown had bad heart disease and was treated with medicines by Warren at the University of Mississippi Medical Center.  When there was no improvement, Warren operated and did a bypass.  Post-operative it was found that Brown had thrombocytopenia and another doctor was called in to treat it.  It was thought that the thrombocytopenia was due to medication prescribed by Warren.  Brown needed a bilateral leg amputation.  Brown sued but never got to trial since the sovereign immunity covered both physicians doing their work at the Mississippi Medical Center. 

Chapman v Univ. of Kentucky

The surgeon who operated on Mr. Chapman left a towel behind in Mr. Chapman when he was through with surgery.  A suit followed and was tossed due to sovereign immunity.  The plaintiff may file a claim with the state Board of Claims for a limited amount of medical expenses, lost wages and other costs flowing from the error but no punitive damages or damages for pain and suffering.  The concept of sovereign immunity is obsolete and should be done away with.  While no fan of malpractice suits, I believe that the state institutions should utilized malpractice insurance as to their direct competitors.  Many years ago in Pennsylvania, the Courts tossed the concept by overruling their prior decision in "Flagello".  It should happen in these states as well.

Campbell v Delbridge
Iowa Supreme Ct.

A Jehovah's Witness had informed his surgeon he would not accept blood.  He was given his own blood back due to a miscommunication between the physician and the hospital nurses.  No order for blood was given.  Since here were no complex issues to hear, only the communication issues between the physician and the nurses, no expert was required.      Top


DiFelice v Aetna
3rd Circ.

 DiFelice has sleep apnea and is covered under an ERISA employee welfare benefit plan administered by Aetna.  His physician ordered a specially designed breathing tube.  Aetna refused to pay because the tube was "medically unnecessary".  The physician inserted a different tube and this caused severe pain and necessitated the hospitalization.  DiFelice sued in state court for Aetna interfering with the physician's decision regarding the tube and insisting the physician discharge the patient from the hospital before the physician would have otherwise done so.  Aetna removed the case to federal district court on ERISA pre-emption.  DiFelice then moved to remand back to state court but lost after the district court stated that ERISA completely pre-empted the action. DiFelice appealed to the 3rd Circuit which upheld the pre-emption for the necessity of the tube as a claim for benefits under an ERISA governed plan.  The Circuit Court reversed on the second claim that Aetna interfered with his medical treatment by insisting that he be discharged from the hospital. Aetna had failed to show that its insistence had been due to a plan benefit, there was no complete pre-emption and this must be decided by the district court if it decides to retain supplemental jurisdiction. 

Rosenbaum v UNUM

 Rosenbaum sued in the US District Court for wrongfully denying his claim for long term disability benefits under an ERISA plan.  UNUM moved to dismiss because the claim was completely pre-empted by ERISA.  The court denied the motion since it came within the ERISA saving clause. The defendant moved for reconsideration.  The court on reconsideration looked at the action under Kentucky Ass'n of Health Plans v Miller. The court stated that the Miller two part test requires that state legislation (1) be specifically directed toward entities engaged in insurance and (2) substantially affect the risk pooling arrangement between the insurer and the insured.  When the court looked at 42 Pennsylvania Cons. Statute Section 8371 under which this suit was based it found that the statute fell into both parts of the Miller test. To trial.   

Duchesne-Baker v Extendicare

Plaintiff worked for Chateau and was covered by her employer's HMO administered by Aetna and covered under ERISA.  The owner of Chateau stated it was bankrupt and was terminating all employees but would cover all benefits for three months. During this three month period plaintiff underwent surgery that was previously approved.  Due to complications from the first surgery she needed a second surgery which was not approved by the defendant who had taken over management of Chateau. Since the coverage had been denied the plaintiff returned to work before her physician had released her.  This caused a ventral hernia that necessitated a third surgery to repaid the hernia.  Plaintiff sued Defendant in state court claiming bad faith and tort claims by improper denial of coverage and that this caused the hernia and the third surgery. Plaintiff sought damages for lost wages and medical expenses.  Defendant retroactively reinstated plaintiff and paid claims for the first two surgeries but not the third since it was after the three month period.  Defendant then removed due to ERISA preemption and moved for summary judgment.  The District Court ruled for the Defendant on the state law contract claim and bad faith claim but denied the summary judgment on the remaining claims.  The court left in place the plaintiff's state court tort claims.       Top

Product Liability

Rufer v Abbott Labs
Wash. Ct. App.

Rufer was misdiagnosed has having a gestational trophoblastic disease which necessitated a hysterectomy and thoracotomy and chemotherapy.  The wrong diagnosis was due to multiple elevated tests of hCH.  The test kit was made by Abbott which controls 56% of the market and 90% of the false positives.  The company did not warn of false positives in their literature.  The patient sued the hospital for malpractice and Abbott for product liability.  She won $16 million divided between the two. This is an unpublished decision so it may not be used for precedent.        Top


Romano v Manor Care
Fla. Dist. Ct. App.

Romano was a resident in Manor Care nursing home.  Her husband and guardian signed an arbitration agreement when she was admitted.  The agreement specified that neither party was entitled to attorney fees in arbitration, limited non economic damages to $250,000 and excluded punitive damages.  The agreement also contained a waiver of the resident's statutory rights but did not state what the rights were.  The home did not explain the arbitration agreement to the husband nor the consequences of not signing.  Following a deterioration, the resident left the facility and the husband sued under the Nursing Home Resident's Rights Act.  The trial court agreed that arbitration was mandated by the paper signed by the husband on admittance to Manor Care.  On appeal the court stated the agreement was unenforceable and unconscionable since it went against the Act.  To trial.        Top


Arani v TriHealth, Inc
6th Circ.

Arani, a board certified Internist and non invasive cardiologist was a member of the reading panel at Bethesda north Hospital in Cincinnati, Ohio.  Arani was then excluded from the panel based on an arbitrary point system that favored invasive cardiologists.  Arani sued in District Court charging antitrust violations based on Section 1 and 2 of the Sherman Act.  The Court dismissed the claims and Arani appealed.  The 6th Circuit agreed with the lower court.  The court and Arani agreed that it was not a per se violation but the court also said it was not a violation under the "rule of reason".  The court stated that Arani had not produced enough evidence that  the policy produced anti-competitive effects as required by the rule of reason.  There was no evidence that the policy deprived consumers of physicians that would evaluate the tests.  The Court also found nothing in the record that would show that the hospital's actions would increase prices at the hospital or deprive the physicians removed from the panel from alternative employment.  The court also said that there are multiple hospitals in the Greater Cincinnati Area which overcame Arani's section 2 claim of monopolization.        Top    

Peer Review

Sahlolbei v Providence Healthcare
Ca. Ct. App.

Sahlolbei has investigated for derogatory statements (disruptive physician).  He was on the staff of Palo Verde Hospital whose Board decided unilaterally to not renew his two-year application.  He was then offered a hearing to dispute the Board's decision.  Instead and rightly so he sued for injunctive relief.  The trial court denied the motion because he had not exhausted all internal administrative remedies.  He appealed.  The appeals court overturned the trial court.  They held that B&P 809 calls for a hearing prior to any final adverse action.  The failure of the hospital to follow 809 allows the plaintiff to to be excused from following internal administrative remedies prior to suit.  The appeals court also said the lower court's decision that the plaintiff would not likely succeed on the merits of the case was incorrect.  Instead, the standard should be if he would be likely to prevail on his claim that his procedural rights were violated.  The court stated that the underlying evidence was conflicting as to the physician being disruptive enough to cause imminent danger to the health of any individual.  If the hospital felt this was true and could prove it they had a remedy of summary suspension.  But, without a hearing the plaintiff was not able to practice his profession without any showing that he posed an imminent danger to the patients.  

Sadler v Dimensions Healthcare
Md. Supreme Ct.

The physician sued for breach of contract, tort and declaratory judgment after being terminated.  The trial court went for summary judgment for the hospital on all claims and the physician appealed.  The higher court fount that the substantial factor test was not appropriate for claims arising from breach of contract or tort.  The court remanded the case back to the lower court but stated that HCQIA and state law may give immunity from litigation.     Top


Texas Bd. Med. Examiners v Dunn
Texas Ct. Appeal

The Texas Board again showed its true color, yellow.  An anesthesiologist was addicted to prescription drugs and while addicted erroneously did an epidural which resulted in the death of the woman and her unborn child.  The anesthesiologist was suspended by the Board until he could show he could practice safely.  After the Board repeatedly went against its own settlement conference recommendations and refused to allow the physician to resume practice, an ALJ became involved and the anesthesiologist was found competent to resume practice.  The Board still refused and rejected the ALJ findings of fact and law.  The Court of Appeal chastised the Board for not having reasonable basis for rejecting the ALJ recommendations and that the Board's decision and review was limited to the the record before the ALJ. Basically the Board had made up its mind and would not let the facts get in the way.  This will hopefully change some of their Gestapo tactics.       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.