February 1, 2017 Recent Legal News



Peer Review and Employment





US v MedStar Ambulance of Massachusetts

The company has agreed to pay a fine of $13 million to settle allegations that it fraudulently billed Medicare.  The whistleblower case alleged they billed for bogus ambulance services and double billed patients.  The whistleblower will get $3.5 million.

US v McKesson Corp

The nation's largest distributor of pharmaceuticals has agreed to pay a fine of $150 million for failing to report suspicious orders of addictive meds.  They also must, on a staggered basis, suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida.  They also will be under an order to hire a  compliance monitor.  This is the second fine for the company for this as in 2008 it paid $13.25 million to settle an allegation that it failed to design and implement a system to detect and report suspicious large or frequent orders.

US v Williamson

Wayne Williamson of Kansas City, Missouri, plead guilty of fraud for examining veterans for disabilities when he had lost his medical license.  He lost his license in 2010 in another fraud case.  The veterans must now have their claims re-adjudicated. 

Investors v CHS

 CHS executives agreed to pay $60 million to settle an investor suit against them that they breached their fiduciary duties.  They claim the company committed fraud when they fraudulently billed Medicare to maximize reimbursements.  They had a unlawful inpatient admissions policy.  This comes two years after CHS paid $98 million fine to settle the allegations with the fed.

US v University of Pennsylvania

The health system agreed to pay a fine of $845,000 to settle allegations that they improperly billed for stent procedures by two cardiologists who no longer work there.

US v Walgreen's

Walgreen's has agreed to pay $50 million to the feds for illegally inducing people to get their prescriptions filled at Walgreen's.  They allowed fed med patients to participate in their Prescription Savings Program when they should have known that was illegal.  The program is fine for those not on fed med but constitutes an illegal kickback for fed programs.

US v Martinez

Dr. Jose de Jesus Martinez of McAllen, Texas, was arrested and charged with soliciting and receiving kickbacks.  It is alleged that he asked for and received money for referring Medicare patients to home health agencies.

US v Locy

A former senior director of the UPMC Health Plan Ronald Locy admitted to embezzlement by placing his wife on the payroll when she did no work.  He falsified records to show she did work.          Top


Higler-Engler v Breg, Inc.
Ca App Ct

A jury awarded $70,000 in damages and an additional $5 million in non-economical damages plus punitive damages against a physician, his medical group and a device manufacturer for malpractice in not warning the patient about the potential complications of a Polar Care 500 device.  The court of appeal reversed a strict liability claim for design defect against the physician and medical group but kept the negligence claim.   The trial court refused and the court of appeal agreed that a requested jury instruction regarding the manufacturer's strict liability.  For devices like the Polar 500 the intermediary doctrine does not apply.  The MICRA cap on damages of $250,000 does not apply to the intentional concealment against the doctor and medical group.

California Medical Board v Ikuta
Surrender of License

  Dr. Clyde Ikuta of Anaheim gave up his license after being accused of over prescribing opiates and causing one patient to die.  

Stafford v Burns
Ariz Ct App

The patient came to the ED after ingesting methadone.  After hours of testing and treatment he was discharged and found dead the next day.  The parents filed suit saying the death was due to premature discharge.  The lower court ruled for the defense and the appellate court affirmed.  The plaintiff needed to show a heightened burden of proof.    This is due to EMTALA being applicable every time a person comes to the ED.        Top

Peer Review and Employment

Thurlow v York Hospital
D Me.   

The surgeon sued the hospital after it fired him without cause several months after he complained about another surgeon falsifying notes and performing unnecessary surgery.  He remained on the staff but not employed until he refused to sign a behavioral compact prior to talking with the hospital President.  He then sued for retaliation and after allowing the late complaint to be served the hospital filed for a motion to dismiss.  The court said the physician's amended complaint could proceed and that the several month gap was possible retaliation.  Some hospitals and their attorneys are too dumb to be allowed stay in business.

Diakow v Oakwood Healthcare
ED Mich

The 80 year old physician entered into a on-call contract with the hospital which paid hourly for nighttime coverage.  The contract had been extended twice.  During this time he sustained a leg injury which necessitated a wheel chair.  A nurse reported this made it difficult for the physician to perform surgery.  The hospital then opted to not offer him a renewal of the contract but he remained on the hospital staff.  She sued under the ADA disability and the court allowed the suit to go forward after denying summary judgment to both sides.  The court did agree that the physician did not prove his age related disability claim.

Underwood v Roswell Park Cancer Institute

This is the rare case where a hospital was so blatant in their discrimination they lost the summary judgment round in the courts.  The physician received lower pay than his peers and was subjected to many employment adverse events.  He was forced to take an advanced training course which he passed.  He continued to be harassed and eventually lost his privileges and sued.  He won all the important summary judgment issues.        Top


Matheus v Harris
Ca App Ct

A group of psychotherapists sued the state saying the inclusion of downloading or streaming child porn violated their patients right to privacy.  The Child Abuse and Neglect Reporting Act forces the therapists to report people who have done this.  The court said the patients have no rights to view child porn and so have no reasonable expectation of privacy.  Therapists must report.

US v Aetna/Humana

The federal court agreed with the feds that the merger of the two insurers would be anticompetitive.  It said the merger would lessen competition and the so called efficiencies would not be enough.

US v Overlake Medical Center

The DOJ stated the hospital agreed to pay $200,000 to settle allegations that they did not abide by the ADA and did not give a ASL interpreter when asked to.  Out of that money $125,000 will go to the complainants.  


US v MAPFRE Life Insurance Co

The Puerto Rican company will pay $2.2 million for lying to the feds.  They originally stated a USB device was stolen from an unguarded IT Department.  Really the company never did a risk analysis nor set up any risk management plan.  The company also did not encrypt anything.

Employees v UPMC
Penn App Ct

The Pennsylvania Appellate Court ruled as did the lower court in favor of the hospital.  The hospital had a hack where employee's information was obtained.  The suit was for negligence.  The lower court said all were victims.  The appellate court said the employees gave their information to the hospital for employment purposes without a contract to keep that information safe. It is amazing the rationale the court can come up with in order to reach the decision they make.        Top


Pennsylvania v Bey

An investigation is being launched into who is V. Renita Bey.  Bey posed as a physician months ago and did school physical exams on high school students.  She charged $20 per physical for an unknown amount of students.

New York v Newman

Dr. David Newman, former ED physician at Mount Sinai, was sentenced to two years in prison for sexually abusing patients.    His license has been suspended.        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.