December 15, 2012 Recent Legal News






Peer Review and Employment


US v Zaky

Podiatrist Samir Zaky of New Haven, Connecticut, was indicted on 14 charges of health care fraud and an additional 14 charges of making false statements.  The indictment claims that Zaky put in for reimbursements for procedures not performed.

US v McCutcheon

Dr. Diana McCutcheon of Killen, Alabama, pled guilty of health care fraud for billing for cosmetic procedures not allowed under Medicare.  She agreed to forfeit $990,000 as proceeds of illegal activity.  She will be sentenced in March.  

US v Saoud

Dr. Allen Saoud of Clarksburg, West Virginia has been indicted for healthcare fraud.  He is accused of also income tax evasion in his Dermatology practice.

US v Kim

Dr. Ho Yon Kim of Brooklyn pled guilty of healthcare fraud for using purchased Medicare numbers to order unneeded DME from his business.  His colleagues, Drs. Hoi Yat Kam and Peter Lu are awaiting trial. 

US v Sachdeva

Dr. Meera Sachdeva, Brittany McCoskey and Monica Weeks of Summit, Mississippi, have been sentenced for billing for chemotherapy when she was out of the country.  The physician got 20 years in prison, fined $250,000 and ordered to pay restitution of over $8 million.  McCoskey, the office manager, got 13 months for making false claims.  She was also ordered to pay $53,000.  Weeks, who ran the billing service, got home confinement, a fine of $2000 and pay restitution of $19,000.

US v Echols

Dr. Ben Echols of Houston was found guilty of Medicare fraud by a jury.  He falsified care plans of patients including those he never treated.  He was working for a home health groups.        Top


US v Werther

Dr. Norman Werther of Philadelphia had previously been indicted on drug conspiracy and trafficking.  A new indictment of distributing a controlled substance resulting in death.  The latest indictment also named nine others.  So far 67 people have been indicted in the scam.

Nevada v Mathahs

Keith Mathahas, a nurse anesthetist in Los Vegas, has pled guilty to criminal neglect, insurance fraud and conspiracy to commit racketeering.  This is in relation to the 2007 hepatitis outbreak in a clinic doing colonoscopies.  The other two co-conspirators have not yet been tried.  The plea deal by Mathahas means he will testify against the others.  

US v Healthpoint

Healthpoint and DFB Pharmaceuticals agreed to pay $48 million to settle a suit stating they marketed a prescription skin cream without FDA approval.        Top


Liberty Counsel v California
Fed Court Calif.

As it could only happen in California two federal judges in the same court heard the same case and came to two separate and opposite conclusions.  The first judge said the state's ban on conversion therapy for homosexuality is not legal.  The second judge the next day in the same court house said it was legal.  The Secretary of State said she will defend the law.  

Bayfront Medical Center v Florida
Fl Ct App

Three hospitals in the state sued to keep HCA from opening trauma centers in two counties.  They actually already opened the centers.  The hospitals won and Florida will not challenge the ruling any more.  However, HCA has asked the court for a reconsideration and also is fighting to keep their trauma centers open.  

US v Caronia
2nd Circuit

In a blow to the government the court overturned the conviction of a drug rep who touted non FDA approved but legitimate uses for a drug.  He had been sentenced to one year probation and 100 hours of community services on a misdemeanor charge.  The basis for his appeal was the First Amendment allowing free speech.  He did not think it was fair that physicians could discuss the off label uses and prescribe for off label uses but drug representatives could not.

Ortiz-Patino v Swedish Covenant Hosp.

Two patients are suing the Chicago area hospital of not living up to their non profit status.  In Illinois this is a big deal as several hospitals have already lost their non profit status for not doing enough charity work.  This case draws the attention of the Illinois Attorney General to the hospital which the hospital does not want.  The plaintiff stated she filled out multiple forms required by the hospital for indigent care.  The hospital claims they never received them.  There have been two recent class action suits in the past for the same thing and the hospitals involved had to pay thousands of dollars back to the patients plus the monstrous attorney fees.  The state legislature in the Democratic bankrupt state recently passed laws giving a broad definition of charity care but were required to provide free care to low income patients.

In Re Aetna UCR Reports

Aetna has agreed to pay $120 million to settle a suit by our of network physicians over the amount they were paid.  This is another suit related to the dreaded Ingenix, the company that got rich stiffing physicians and is now out of business.  It was owned by Unitedhealth.  Aetna paid $20 million earlier to physicians in New York for the same thing.

US v Pfizer

Pfizer has agreed to pay $55 million for the 2001 misbranded drug by the Pfizer purchased Wyeth Drugs.  The feds say that Wyeth promoted a drug approved for short term use for esophagitis for GERD.  

CMA v California
9th Circuit

The 9th Circuit stated that they must kowtow to the HHS which has stated that lowering of Medicaid rates was unlikely to curtail services.  That erroneous declaration allowed the court to let California reduce payments for Medicaid patients by 10% retroactive to 2011.  This will reduce the already small physician population that will treat Medicaid and will also decrease the pharmacy population that will fill Medicaid prescriptions.  This will become even more acute when Obamacare hits and many more patients will be on the low paying plan.        Top


Patients v Univ. of Virginia
To Be filed

A University employee lost an unencrypted handheld device with the information on 1500 patients.  Apparently, no financial information was present except the Social Security numbers of Medicare patients, only sensitive medical information.  Why the information was not encrypted is unknown.

Patients v California
To Be Filed

KCRA television of Sacramento, California, has reported that the state released thousands of Medicaid provider SSNs on the internet. This was on line for two weeks before being found and removed.  This is the second time in a year that the state has screwed up in the same manor.  The first time they gave several months protection to the 750,000 they endangered.  This time they are giving a year's protection.         Top


Gunn v St. Vincent Infirmary Med Ctr.
ED Ark

The plaintiff had mesh implanted in 2004.  She states that the mesh failed in 2012.  She sued and lost on summary judgment since there is a two year statute of limitations in Arkansas.  She contended that a discovery rule tolled the statute.  It didn't.

Patients v Cedars-Sinai Hospital
To Be Filed

A particular set of circumstances came together to infect five heart valve patients with an infection that necessitated a second operation.  The surgeon had a skin inflammation and did valve replacement operations.  The multiple suture ties possible caused micro punctures of the surgical gloves and the bacteria in the inflammations infected the patients causing endocarditis.  The hospital says that the physician is still on the staff but no longer does surgery at the hospital.  I wonder how he makes a living.          Top

Peer Review and Employment

Nathan v THE Ohio State Univ.
DC Ohio

This case is a warning to all hospitals that employ physicians.  They may sue in federal court for civil rights issues and according to this court the plaintiff will be allowed access to all similarly situated physicians.  In this case all the anesthesiologists practicing in the same hospital department as the plaintiff-anesthesiologist.  These records may be used against them in employment litigation.

Gaalla v Citizens Medical Center
SD Texas

In a case that continues and continues, the court ruled in a summary judgment motion mostly for the group of Indian cardiologists who claim to be discriminated against by the CEO.  It is amazing that the hospital board continues to allow the CEO to be at this or any hospital.  

Williams v Columbus Regional Healthcare Sys.
11th Circuit

A black physician filed suit for racial discrimination after he was terminated from the Georgia hospital.  He lost since it was a private institution and the bylaws are not contracts and therefore may not be the basis for any discrimination complaints.  I am adding this case to aid physicians who want to sue and believe they will win.  They, except for rare occasions, will only lose money to their and possibly the hospital's attorney.

Kademani v Mayo Clinic
D Minn

The hospital appealed after losing a suit to a surgeon who claimed the hospital breached a non-disclosure agreement when another hospital asked about the surgeon they were told "to do their homework."  The hospital was denied due to no new evidence to produce a different result in a new trial.  The second reason for it's loss was the hospital's failure to present any evidence that the facts told by the surgeon were untrue.  Even the Obama wonderful hospitals may have very bad attorneys.

X South Shore Radiology v Mobile Health Mgt. Services
Superior Ct. Suffolk County, NY

The physician group sued for illegal fee splitting between an imaging company and two health management companies.  The case went to a special referee and the court adopted the ruling for the plaintiffs.          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.