January 15, 2009 Recent Legal News









Peer Review


Arce v Kaiser
LA Trial Ct.

In an important case Arce sued for med mal against Kaiser.  There was not the standard arbitration clause in the contract on the on line contract that Arce signed.  Therefore Arce can proceed with a suit against Kaiser.  Kaiser did not appeal the ruling as they do not want this as precedent.  It may be valid for all LA county workers that signed the same online agreement.

Knighten v US
ND Ill

Knighten sued a hospital for the negligence of non employed physicians.  The hospital was not allowed summary judgment since it's consent form stated the patient may be treated by an employed or an independent physician.  The reasonable person may assume the physician is an employee and can sue the hospital on vicarious liability.

Guzman v Memorial Hermann Hosp
SD Texas

The family sued QualChart, an out of state maker of pathways for emergency room physician patient encounters.  The court dismissed QualChart as a defendant since it was out of state and had minimal state contacts.  Also the pathways did not override physician decisions and there was no evidence of a nexus between the pathways and the harm. 

Lacy v My Midwife
NY Supreme Ct

Lacy was going to deliver twins and wanted a home delivery with a midwife.  The midwife during the prenatal sessions heard a slow heart of one of the twins and sent the patient to the hospital.  The heart had stabilized by the time she was seen at the hospital.  During the home delivery the midwife had a nurse present to take pictures.  One of the babies was stillborn and the mother had to find someone to blame besides herself.  She sued the midwife and the nurse who stated she did not participate except as a good Samaritan.  The judge said there was a question of facts presented and therefore the case against the nurse should proceed to trial.    

West v Memorial Hermann Hosp.

Mr. West had a history of atrial fib, diabetes and chronic renal insufficiency.  He then swallowed a chicken bone which perforated his small intestine.  He was operated on and a small bowel resection was performed.  Post operatively he developed dropping hemoglobin levels.  The hospital is accused of not repeating the hemoglobin test to make sure it was not a mistake, not notifying the physician promptly, not going up the chain of command when the physicians did not order further tests to determine the cause of the lab test abnormality.  The patient was on blood thinners.  No test was done to see if he was bleeding internally.  The patient continued to drop the hemoglobin and died of a myocardial infarction.  The hospital states it did no wrong and is moving to dismiss.

Carl v Oak Hill Hospital

Mr. Carl had a boil on his back lanced and no culture was done.  He was given antibiotics and sent home.  Several days later he was admitted to the Brookville, Florida, hospital for high blood sugars.  He was found to have MRSA but was not told.  He was given more antibiotics and discharged.  He then again had uncontrolled diabetes and was readmitted to the hospital. He was not examined for 21 hours after admission and when examined was found to have MRSA septicemia and died. The hospital and the physicians are being sued.  

McQueen v Shands Jacksonville

 Ms. McQueen was seen at Shands three years ago for stab wounds.  She was sutured and sent home.  Now a knife blade was found next to the mandible.  She is suing for her headaches.  Doesn't sound like the case is worth much except for publicity for the attorney.  

Cheung v Ker
CA Ct App

 Cheung sued Ker and Ker's employer, Alhambra Medical Center, for med mal.  The trial court gave summary judgment to the defendants.  The court of appeal overruled since there were triable facts in dispute.

Thomas v Warden 
Mississippi Supreme Court  

The high court agreed that the med mal case should be dismissed since the plaintiff's attorney did not follow state law and give a 60 day pre suit notice to the defendants.  He gave the notice but then filed prior to the 60 days had expired.  This attorney should be sued for legal malpractice.        

Thomas v St. Joseph
Ky Ct App

Gray went to the hospital ED with abdominal pain.  Tests were ordered but not obtained for unknown reasons.  He was discharged and returned five hours later vomiting blood.  Tests were then done and again he was discharged from the ED.  He died soon after from a peptic ulcer.  The estate sued on med mal and EMTALA and won compensatory damages of $25,000 against all defendants reduced by 25% fault to the plaintiff.  The jury also gave punis of $1.5 million against the hospital.  The court said his was way too high and ordered a new trial on the punis only.        Top


US v AllCare IPA

The 500 member multi specialty IPA settled with the feds over their dealings with PPOs.  The feds claim the IPA fixed prices and other contract terms.  They also had their members refrain from dealing with the PPOs on terms other than the PPO had approved.  There was no financial risk sharing among the members. The feds got an order emasculating the PPO and essentially putting it out of business.  The order will expire in 20 years.

US v Boulder Valley IPA

The Colorado IPA signed the same consent order as AllCare.  Again it was a multi specialty IPA in Boulder, Colorado.  The IPA told payors that they would terminate relations with them if they did not negotiate with the IPA and not the members directly.        Top


Dewitt v Proctor Hospital
7th Circ

Mrs. Dewitt, a nurse at the Proctor Hospital in Peoria, Illinois, and the wife of a man with terminal prostate cancer was fired from her job.  Her husband was getting expensive tests and treatment at the hospital and the hospital was paying the insurance.  He eventually died but after she was fired.  She sued and lost in the trial court on summary judgment and the 7th Circuit reversed the trial court.  The case is now set for trial later this year.  Her supervisor asked her on several occasions if her husband was going on hospice and she always answered that he wanted to continue to fight.  Mrs. Dewitt was fired after one phone call to her while she was on vacation asking her to come in during her time off.  She refused and was fired the next day.  Something does not pass the smell test. 

Midtown Med Group v State Farm
AZ Ct App

 State Farm believed Midtown was an illegal medical corporation and refused to reimburse people treated at the Group.  The rationale is that Arizona is a state that recognizes the corporate practice of medicine bar.  The court disagreed.  They said that a non medical controlled corporation could hire licensed professionals to treat patients.  This is against all prior thought processes and allows medical treatment to be compromised by non-medical people.  The court stated that the reg allows a natural person which includes a non medical corporation to operate an outpatient center.  The state licensing agency approved this facility so it is legal in the state.   

Grain  v Trinity Health
6th Circ

Dr. Grain and his wife were employees of Trinity Health for interfering with their medical practice.  The case went to arbitration under the Federal Arbitration Act (FAA) and the physicians won $1.5 million.  They then sued to increase the award to $3.2 million but here they were unsuccessful as they were challenging the merits of the award and not an error in calculation.  This is not allowed under the FAA.  Their attorney should have known this and advised them not to waste money.  I would hope he/she would not be paid for the frivolous appeal.   Top


Gerena v Fogari
Jury Verdict

Mrs. Gerena had Lupus and was deaf.  She visited Dr. Fogari in Hudson County, New Jersey about 20 times for the disease asking for a sign language interpreter each time but was refused.  The physician is a solo practitioner and would have been charged about $150 per visit for the interpreter. She sued and the jury awarded about $200,000 in damages and another $200,000 in punis.  Med mal insurance does not cover this award.  The physician is appealing the award. The test is whether or not the patient not the physician believes there is adequate communication with the use of written notes instead of an interpreter.         Top 


US v Eli Lilly

Eli Lily has agreed to pay $1.41 BILLON for promoting off label uses on Zyprexa.  This includes criminal misdemeanor charges payment of $555 million.  The company was promoting the drug for non approved uses as dementia and Alzheimer's.  

NY v St. Joseph Hosp

The state has filed civil charges against seven hospitals in New York for having SpecifiCare provide patients for the hospitals that did not need care.  The hospitals are Columbia Memorial in Hudson, Long Beach, St. Joseph in Yonkers, Benedictine, Downtown, Parkway (recently closed) and Our Lady of Mercy which settled for $4.5 million.

US v Citrus Health Care

The feds have ordered a cease enrollment and marketing by the Tampa, Florida, HMO.  They had not accepted Medicare Advantage and Part D enrollments for two periods due to financial constraints.  

Florida v Simmons

A midwife in Lauderhill, Florida, Wylene Simmons has been indicted for Medicaid fraud.  She is accused of billing for unperformed services.  If convicted she can get 10 years in prison and a $10,000 fine.

US v Patel

 Dr. Mehmood Patel of Lafayette, Louisiana, has been convicted of healthcare fraud.  He falsified patient records and tests in order to do procedures.  This was between 1999 and 2003 when he was the top Medicare biller in cardiology in the state.  He faces a term of 10 years in prison and a fine of $250,000.  

Massachusetts v Boston Med Ctr

The Center has agreed to pay the state $600,000 due to alleged overcharging the state for ED services provided to low income people.  

US v LeDuc

Robin LeDuc, a Connecticut chiropractor, was sentenced to five years probation and to pay $41,000 in restitution to Anthem Blue Cross.  She admitted to submitting fraudulent claims for treatments not done.

US v Sharp

Rebecca Sharp and seven co-conspirators were indicted in Michigan as owners of home health agencies that received and paid kickbacks for patients. 

US v Manchester Hosp.

Connecticut's Manchester Hospital is the sixth in the state to agree to reimburse the government for overcharging for cancer infusion therapy. 

US v Jackson Madison Hospital

Jackson Madison Hospital in Madison County, Tennessee, and Milan Hospital owned by the same county has agreed to pay the government $2.6 and $5.3 million respectively.  The fraud was in ambulance services and geriatric psychiatric care.

Illinois v MIDI LLC

Midi LLC has agreed to pay Illinois for giving illegal kickbacks to physicians who referred patients to it's MRI centers.  They will pay $1.2 million of which $800,000 will go to the state and the rest to the originator of the suit, a competing MRI center.          Top


California v Adams

Dr. Jan Adams, the plastic surgeon who operated on Kanye West's mother one day prior to her death, was convicted of drunk driving and sentenced to one year in jail.  He had a BA of .20 and was driving his Jaguar the wrong way on a highway.        Top


Biegel v Norberg

In an interesting San Francisco case Dr. Steven Biegel, a chiropractor, is suing a patient for posting on a site a condemnation of Dr. Biegel's billing practices.  The patient after a complaint by the chiropractor posted another bad review.  Biegal believes both reviews are malicious and is now suing the patient.  He was charged more than the patient thought he should be charged.        Top


New York v UnitedHealth

In a major turnaround, United has agreed to a settlement with New York to stop using the poorly designed Ingenix fee schedule.  This should mean better reimbursements for hospitals and physicians who see out of network patients.  The rest of the insurance industry still uses the skimpy schedule and hopefully will go along with United.  United will pay $50 million to fund a new database on which to base payments to out of network providers and patients who go out of network.  United has agreed to pay an additional $350 million to settle a class action suit against it by the AMA that accused United of manipulating the out of network payments for the past 15 years.  Aetna has also agreed to pay $20 million toward the new database for out of network providers. 

St. John's Health Ctr. v Prospect Med Grp
California Supreme Ct.

Prospect Medical Group operates akin to a HMO and had a disagreement with the physicians working the ED at St. John's and Northridge Hospitals.  The physicians who were not contracted with the Prospect group were billing patients the difference between what Prospect was paying and their usual charges.  California put in a rule (not a law) that the Department of Managed Care would mediate any dispute between the ED physician and the HMO for uncontracted care and no patient could be balance billed.  The California Supreme Court agreed with the rule.  Since the rule went into effect HMOs and physician groups acting like HMOs have cancelled or not renewed contracts with ED physicians to avoid paying contracted rates.  The rule states reasonable rates but does not define reasonable.  One of the problems is whether this rule affects those specialists called in to the ED to see the uncontracted patients.  If so, more money will have to be paid by the hospitals to get physicians to take ED call or more physicians will drop out.     

Arkansas Blues v Little Rock Cardiology
8th Circ

In a long involved case regarding Arkansas' Any Willing Provider statute the courts so far have gone with the physicians who are suing to get back on the panel and for damages.  This case started in 1996 when Prudential sued to block the Arkansas AWP law.  They won but in 2003 the US Supreme Court ruled that a nearly identical rule in Kentucky was legal.  The insurer then sued for declaratory relief to make sure the Arkansas case was still valid.  The insurer lost.  The providers then sued the insurers to get back on the panel and for damages for being left off the panel.  The insurers sued in federal court to block the provider suit.  The fed court stated they had no jurisdiction so the provider suit may proceed. 

Weinstein v California Dept Health
LA Superior Ct

The suit was instituted to force the state to comply with a six year old law that mandated all HIV patients with AIDS enroll in HMO instead of fee for service Medicaid.  This was to free up money for HIV positive people to enroll in Medicaid.  The state had never followed through and many with HIV never got enrolled in Medicaid.  The state said the law stated that it should not be implemented if it was not cost neutral.  The court ruled that the state had never done a study to determine if it was neutral or not. 

Patients v Hospitals

Eight Chicago hospitals have agreed to re-look at the way they have soaked patients without insurance.  They are now willing to recalculate bills and give 25% discounts to any uninsured no matter their income. Top

Peer Review

Doe v Secretary
1st Circ

In an important peer review case at an unnamed hospital there was an ad hoc fact finding investigation of Dr. Doe.  The physician resigned prior to the end of the investigation being closed.  The hospital reported the physician to the data bank as resigning while under investigation.  The court at the trial and the Circuit level both agreed that the physician should be reported.

Cole v St. James Healthcare
Montana Supreme Ct.

The high court agreed to the injunction filed by Dr. Cole against the hospital to put him back on staff and not taking any further action against Dr. Cole.  The hospital had reduced his staff status from active to consulting without notice or hearing.  The hospital then illegally hired an attorney to investigate the physician instead of the medical staff doing the investigation as per the bylaws.  The physician refused to cooperate with the illegally appointed attorney and filed the suit.  The court stated that the hospital did not give the bylaws required three month notice of a reduction in staff status, the physician had an excellent chance of winning the breach of contract suit against the hospital. This hospital needs a new CEO and a new attorney who is able to read bylaws.       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.