July 1, 2001


Proposition 215



Sign Interpreter Problems

AMA Defamation Suit

Wrongful termination Suit Won by MD

HMO Suits

Real Estate Snafu

Expert Witness Gone Awry


Discrimination and ADA

Product Liability

Medicare Compliance

Proposition 215

The Sacramento Area DAs are developing guidelines for marijuana use under California law.  Nobody is really paying any attention to the Supreme Court Oakland Cannabis decision since almost all arrests for use are made by the state and local law enforcement, not the Federales.  A State bill has been introduced to allow those with medical conditions to obtain an ID card.                                        Top


Expert Witness

Waters v Jarman
NC Ct. App.

Plaintiff sued physician for malpractice and the hospital for corporate negligence for failure of proper credential and monitor the physician.  The plaintiff did not have any experts on the latter issue and the trial court granted summary judgment for the hospital.  The court of appeals reversed stating that a corporate negligence claim for administrative or management deficiency does not need an expert witness.


Reddy v Good Samaritan
SD Ohio

An anesthesiologist challanged an exclusive contract and lost.

Nilvar v Mercy Health
SD Ohio

The same court as above found that a radiologist who lost long standing privileges when an exclusive contract with a group was lost could sue under state law claims since the hospitals Policy Manual was unclear.  The court did grant the hospitals summary claim dismissing the antitrust tying claim.  The court also stated the radiologist had standing to sue and discovery would be appropriate.  The major difference between the two cases are that this is for a Motion to Dismiss versus an Summary Judgment motion in the preceding case.

Orr v BHR, Inc.
10th Circ.

Orr, an ED physician, was employed by a group.  He had complained the rates charged by BHR for billing were higher than competitive rates.  He alleged that the physician shareholders who controlled both the billing and the medical group did not seek competitive bids.  He stated that because of his complaints he was improperly terminated from the group.  He filed an action stating the refusal to allow competitive bids was a violation of the antitrust laws.  He lost since he did not have standing to sue since he was neither an employee or owner of BHR. 

Collins v San Francisco and UC Board of Regents

Lightning strikes twice.  This lady had a towel left inside her colon in August 1998 while undergoing an abdominal procedure.  The towel eroded through the colon and caused the expected problems.  The towel was then discovered and another operation was necessary to remove the towel and perform a diverting colostomy.  During the operation to close the colostomy a part of the drain was left inside and still another surgical procedure was necessary.  The city paid $125,000 to settle their portion of the case.  The case against the supervising UC surgeon continues.   The damage amount is the highest for a towel left in an abdomen.  The case in Santa Rosa, California last year settled for $60,000.      

Lection v Dyll
Tex. App

This case centers around the question when does a patient-physician duty arise.  In this case the patient was seen in the ED and examined by the ED physician for multiple complaints.  A neurologist on-call was contacted and stated no treatment was necessary at that time.  the patient was discharged and suffered a stroke.  She sued the neurologist.  The court stated that the phone call by itself was sufficient to establish a relationship since the neurologist made a diagnosis, established a course of treatment by sending her home and suggesting she call him on Monday. I think there is a relationship and a duty just because he was on call and was contacted.  

$16.2 For Cancer Misdiagnosis

Rufer v U. of Washington and Abbott Labs
King County Superior Court

In 1998 Rufer, a 25 year old female, thought she had a miscarriage.  She went to her physician at the University of Washington.  They gave her an Abbott pregnancy test which came out with an extremely high HCG level.  This was repeated multiple times always with the same result.  The diagnosis was presumed to be a malignant tumor.  She underwent chemotherapy, followed by a hysterectomy and a partial lung removal.  She was them told she did not have cancer but the test was faulty.  The Abbott test has a known false positive and this could  have been determined easily.  Abbott and the University were found equally to blame and are to split the damages equally.  Both say they will appeal.  The damages were $452,000 in economic loss for her and her husband, $15 million for her pain and suffering and $750,000 for his pain and suffering.  I believe the moral of this sad story is to always check your results with another lab or another company's test.  I remember when PSA came out there were various methods and various companies doing the test.  In more than several cases I found errors in one of the tests which saved patients unnecessary procedures.                              Top


Dupre v Charter Behavioral
5th Circ

The plaintiff was fired after thirteen days.  In those days she was late on two, was absent on two and left work early on two days.  she blamed it all on a bad back and previous back surgery. The company blamed the termination on absenteeism. The court said Dupree was not disabled under the ADA since she had nothing that would limit of major life activities nor a record of such an impairment.  Her bad back did preclude her from lifting but not from many other jobs.

Flowers v Southern Reg'l Physician
5th Cir.

The plaintiff, a medical assistant,  was HIV +. Following finding this out, the head of the company avoided her and required multiple random drug tests.  Her evaluations which for the past several years had been good now were unsatisfactory and after probation she was fired. She filed a discrimination charge with the EEOC and received the right to sue letter.  She then sued for unlawful discrimination and harassment because of her HIV status. A jury awarded her $350,000 which the judge reduced to $100,000. The Court of Appeal sided with the trial court on all aspects. I continue to preach to my clients never retaliate.  It will cost you a lot of money.  This one did.

Bruff v North Miss. Health
5th Circ

The plaintiff was fired as an EAP counselor.  She refused to counsel a homosexual woman regarding problems with her female partner.  Bruff refused stating homosexuality was against her religious beliefs.  She could not be accommodated and was relieved of her job.  She filed a complaint with the EEOC who did not act.  She then sued for state wrongful termination and a violation of Title VII.  The appeals court ruled against Bruff on the accommodation since it would be more than "de minimus" cost.  The plaintiff argued that the counseling of the homosexual would be a violation of the state sodomy law and against public policy.  That did not fly either.                                Top

Sign Interpreter Problems

Alcade v Deaton Specialty Hosp
D. Md.

Alcade was in a long term care unit on a ventilator.  She was competent and able to make decisions. She was also deaf but could sign.  Alcade was then transferred to another hospital for surgery.  She was not told why she was being transferred or about the surgery. Following the surgery for tracheal separation she was returned to Deaton. The staff in their notes continued to comment about difficulties with communication and the need for an interpreter.  Her respirator was removed without explanation and she suffocated and died.  The court noted that while there is no per se rule that sign interpreters are necessary in hospitals, when they are needed and not obtained this means deaf people are being denied equal access to care.  Maryland malpractice law may recognize a duty to provide communication services and a motion to dismiss these claims were denied.  There was also no informed consent since there were no interpreters.  The moral is when interpreters are needed the hospital must furnish them under 504 of the Rehabilitation Act.                        Top 

AMA Defamation Suit

Dr. Anderson, the chief executive of the AMA, has filed a defamation suit against the AMA and Dr. Flaherty, a Board member.  The suit arises out of alleged disparaging remarks Flaherty made about the plaintiff and his salary. This named by the AMA frivolous suit is for $5 million.  The timing of the suit is perfect since the House of Delegates is currently in session.  Anderson states that the Board refused to allow him to fire the AMA's lawyer for a real estate mistake of due diligence that cost the AMA $13 million.  Anderson stated the reason for the refusal was based on the protection the lawyer gave the Board in the Sunbeam fiasco where the Board claimed they did not know about the deal. This is the same Anderson who fired the editor of the JAMA for his allowing the article that stated that most college students did not regard oral sex as having "had sex." This was when the Clinton impeachment proceeding were in swing.   Anderson has since been fired.       Top

Wrongful termination Suits Won by MD

Kohut v Beaver Medical 

Dr. Kohut, a psychiatrist, was fired for retaliation after standing up to the medical group and refusing to switch his patients from Prozac to Paxil for economic reasons.  Following his firing, Beaver Medical compounded their mistake by telling his patients that he would not continue to see the patients and shredding authorizations allowing patients to see him. The jury awarded Dr. Kohut $1.56 million in compensatory damages and deadlocked on the punitive damage portion.  Punitives were settled between the parties.      

Clark v Columbia/HCA
Nevada Supreme Court  

Clark, a psychiatrist, had his clinical privileges revoked by the hospital due to continued complaining to the State and Federal officials about the hospital staffing, the quality of care and about another psychiatrist.  Clark did not utilize the hospital's internal mechanisms.  After losing his privileges he sued under antitrust.  The hospital was originally given protection under HCQIA.  The Nevada Supreme Court reversed this since there were no quality of care issues involved and all complaints were made in good faith and in furtherance of quality healthcare.        Top

HMO Suits

Milone v Exclusive Healthcare
8th Circ

The patients physician diagnosed bilateral breast hypertrophy and recommended a bilateral breast reduction.  The health plan refused to give pre-certification for the surgery under the premise that the plan did not cover breast reduction or augmentation not associated with cancer. The court called the health plan decision arbitrary and capricious and the surgery was medically necessary.  The plan had allowed three other women to have the surgery when it was not related to cancer. How much money did the plan pay in legal fees to be told they need to pay for medically necessary procedures. Love dumb plans who listen to their lawyers.

Van Ness v Blue Cross of Cal.
Ca. Ct. App.

Van Ness purchased a Blue Cross PPO policy that stated it would pay 70% of the agreed charges between the patient and a non- preferred provider. This was about 35% of the billed charges.  Blue Cross had sent Van Ness a special letter stating there were no network in his area and he acknowledged the letter by signing and returning the letter.  Then, of course he saw a non-covered provider and after Blue Cross only paid their share found an attorney who wanted to lose money to take a case against Blue Cross.  Van Ness lost in the trial court and in the Court of Appeal. Surprise! The contract was unambiguous and valid.

HMOs Sue to Stop Hospital Merger

Three HMOs have filed suit to stop the merger in Pennsylvania of Children's Hospital, the areas only pediatric hospital, and UPMC Health System on antitrust grounds.  Highmark of course already has a 70% market share in western Pennsylvania (insurance companies are exempt from antitrust).  Highmark also offered Children's $20 million to finance a new hospital if they would stay independent. UPMC has agreed to a long term solution giving Highmark access to Children's Hospital.  Sounds like an evening of the playing field to me. Top

Real Estate Snafu

Gambro Health Care, a dialysis company, was leasing space from California Pacific Medical Center in San Francisco.  Gambro found other space to build a clinic but it will not be ready for another nine months.  Gambro's lease ran out and CPMC refused to re-let for a short time.  The case went to court and the judge ordered Gambro out and to pay the difference between current market rate and what they have been paying on the illegal carryover.  Gambro now has a major problem.  There is no space in other dialysis programs for Gambro's patients.  Gambro has two other clinics but one is in Daly City and one is in Chinatown.  These are also full and would require evening appointments and possibly significant driving for patients several times per week.  Gambro states that CPMC orally promised to extend the lease and even wrote a new lease but then revoked the offer.  Gambro should know that under the Statute of Frauds all real estate dealings for over one year need to be in writing and that an offeror has the right to revoke the offer prior to acceptance by the offeree. CPMC states that Gambro has had one year to plan for this and has not.                         Top

Expert witness Gone Awry

Austin v Assn of Neurological Surgeons
7th Circ.

It was determined that a neurosurgeon testified "irresponsibly" and his association suspended him for six months.  He felt it was an act of revenge and sued for loss of income from testifying since the suspension.  The Association got a summary judgment.  The appeals court agreed that a member of a voluntary association can only sue if there is a impairment of an important economic interest.  The court did not believe a decrease of moonlighting income, even from $220,000 to $77,000 was an important economic interest since it was only a small portion of the overall income.  The court also came down hard on the physician stating " if the quality of testimony reflected the quality of his medical judgment, he is probably a poor physician."                                    Top


In re: Admin Subpoena John Doe v US
6th Circ.

The government in an investigation of a podiatrist issued a subpoena for all professional journals subscribed to, all financial statements and tax returns relating to his personal assets and the assets of his children, all documents pertaining to the referral of patients for specific medical testing, documents relating to the podiatrist's education and all documents in his possession regarding billing practices and medical ethics.  The podiatrist felt these were unreasonable and sued to quash the subpoena.  The court stated the requested documents were related to the investigation and not already in the hands of the DOJ and therefore ruled in the government's favor.                                        Top

Discrimination and the ADA

Lesley v Hee Man Chie
1st Circ.

A HIV + patient sued her OB/GYN for discrimination.  There had been a ten year doctor patient relationship between the two.  She was now pregnant and found to be HIV +.  The doctor had treated patients with HIV but had never delivered a woman with HIV.  He recommended transfer to a different physician and facility that would be more familiar with handling a pregnancy and HIV.  He refused to continue to treat the patient. The patient went to the recommended facility and delivered a healthy child.  She then sued for discrimination.  The physician stated he was not familiar with AZT and that the drug was not available at his hospital.  The court stated that in order to prove her claim she had to prove she was disabled, she sought services from a federally funded entity, that she was otherwise qualified for the services and she was denied the services solely because of her disability.  Since she could not prove the physician's decision to send her elsewhere was unreasonable for discriminatory reasons, summary judgment for the doctor was warranted.    

Clay v Holy Cross Hosp.
7th Circ.

A pregnant pediatrician sued for termination from a hospital network.  She claimed she was terminated due to her pregnancy.  The hospital claimed she was terminated for her failure to develop a practice into a profitable enterprise due to her lack of dedication and attitude.  The hospital won since the physician could not overcome the non- discriminatory evidence of the hospital.  Who said there was no such thing as economic credentialing?                         Top

Product Liability

Sulzer in Major Problem

Sultzer Orthopedics has major problems.  Their implants have basically all been recalled for contamination with particles of oil that prohibited the bonding with bone.  There is currently a class action law suit against the company.  As part of the law suit the patient's attorney has called for the subpoena of all the records (10,000 pages) of patients calling into Sultzer with questions or concerns. The trial court has ruled for the attorney since these records are not protected.  The company had hoped that they would be considered confidential medical information and are now appealing their case to the Texas Supreme Court since the Court of Appeal refused to hear the case.  Sulzer has run newspaper ads asking patients to contact the company and offering all harmed patients money for all necessary re-implants plus pain and suffering.  There are currently 800 lawsuits against the company.  17,500 implants were done and 1900 have had them replaced to date.                                   Top

Medicare Compliance

Raytel Cardiac Services pled guilty of obstruction of justice by lying to federal investigators during an investigation of the company's performance of tests and their record keeping.  The fine is $11.5 million which includes the compliance problems. They also entered into a corporate compliance agreement which entails the government in their day to day running of the business.

Campo Care, a Florida franchise of StaffBuilders, was accused of sending nurses and other employees to physicians offices for no compensation.  The salary costs were to be passed on to Medicare.  The company and the owner were convicted of Medicare fraud.  The owner was sentenced to 37 months for each of five counts plus an additional year for filing a false federal income tax return. He was also ordered to pay $923,000 to the Medicare program and $162,118 to the IRS for failure to report income for the 1993, 1994, and 1995 tax years.                                        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.