July 1, 2012 Recent Legal News






Peer Review and Employment



National Fed of Independent Business v Sebelius
United States Supreme Court

In a case that surprised everyone not only as to the outcome but the coalitions, the high court had something for everyone.  They held on a 5-4 vote that Obamacare was constitutional in almost all its provisions that they court decided.  They did not decide all the issues and more will be coming later.  The majority of the four liberal justices and the Chief Justice combined for allowing the individual mandate to stand but not as a mandate but a tax, which can be easily removed in the future. The President and the Democratic leader have always stated that this mandate was not a tax and it was added to the written and oral argument as a third option by the attorney for the government. The minority four justices would have stated the entire law was unconstitutional. The combination of the four conservative justices and Kennedy said the administration at the Congress over-reached when they attempted to create the law under the Commerce Clause.  Broccoli won the day here.  By a vote of 7-2 the Court stated that the feds can not brow beat the states if they don't agree with the Medicaid policies.  The Fed still must pay the states what is due them. The Chief Justice stated that "some decisions are entrusted to our nation's elected leaders, who can be thrown out of office if the people disagree with them".  Roberts also stated the the tax collected by the IRS if one does not buy insurance will be a lot cheaper than the insurance itself.  This throws the gauntlet down for the 2012 election.  All it take is four Senators and one President to change to start over.

The Court did not decide whether or not the panel appointed by the President can make law or if Congress must do it.  All the Republicans in both houses and a significant amount of Democrats want this stricken.  This panel may still be removed legislatively before the current case reaches the High Court. 

After the decision was announced the President and the Democrats continued to say the mandate is not a tax.  They can say what they want but legally it is now a tax and has nothing to do with the commerce clause.  Also it appears that public sentiment did sway Justice Roberts to change his vote.  This is shown in the way the dissents are written.


Ormond v Anthem

Anthem Blue Cross has settled a class lawsuit by its former policyholders that they were underpaid when Anthem went public many years ago.  Anthem had fought this for seven years and when the trial was to start they settled for $90 million. to 700,000 people.  The trial was to start two days later.  If split equally it would mean a $128 per person.  That will not happen because that is before attorney fees which will take away a large percentage of the settlement.        Top


Francis v Salt Lake Regional Medical Center
Reported for fines and sanctions

Professor Francis of the University of Utah Law School was notified that her name and social security number was one that was pilfered by Eastern Europeans from the state Medicaid system.  Since she is doubly insured and is not on Medicaid she tracked the only place where this may have happened, the hospital where she obtained a mammogram.  She asked the hospital and they refused to give an answer due to HIPAA.  She then reported them to various federal agencies for HIPAA violations.  Don't screw with a law professor.        Top


Distributors v Becton Dickenson
3rd Circuit

The court removed the hospitals as co plaintiffs in this class action suit by distributors of needles.  When hospitals need to purchase needles from BD they can either get them via a distributor or via a group purchasing arrangement.  BD would set the price to the distributor and the distributor would set the hospital price.  In 2005 a class action was started for antitrust against BD.  The hospitals then filed suit in 2006 but in the meantime BD and the distributors had settled for $45 million.  The hospitals objected and filed against this.  They lost since the only ones to be plaintiffs are those in direct privity.  This hopefully will lead to the suit being finally settled.

Colon Health Centers v Virginia

Two entities have filed suit against Virginia for their law stating that out of state entities must file for a CON if they want to enter commerce in the state.  The question is, does this violate the Constitution, by discrimination against out of state competitors?

Marin General v Sutter Health

The San Francisco Business times reports Marin General won a $21 million from Sutter Health after Sutter pulled out from running the Marin hospital.  Sutter states the money awarded was for standard pension plan reimbursements.  Sutter also was awarded a stay against Marin to stop their interference with subleases in nearby medical offices.  There has been no decision as to prevailing winner for costs and attorney fees.        Top


US v Paik

Dr. Bo Paik of Palo Verdes, California, has agreed to pay a fine and restitution of $530,000 for receiving cash payments for referrals to a now defunct nursing home.  This is a direct violation of the anti-kickback rule.  Dr. Paik has not been charged criminally.

US v Nayak

Raghurveer Nayak, the major fundraiser for Rev. Jesse Jackson and Rod Blagojevich, was arrested for bribing physicians to send patients to his surgery centers.  He is out on $10 million bond.  It was claimed that Nayak was the front man for Jackson who wanted the Obama Senate seat.

US v Roy
License Surrender

Dr. Jaques Roy of Texas , who is in custody on fraud charges, has surrendered his medical license instead of going to court.

US v Harmon Memorial Hospital & Dr. Abraham

In an interesting case Oklahoma and the feds came after the hospital for submitting false claims.  The claims were deemed false because the hospital stated they were in compliance.  The hospital allegedly paid Dr. Abraham of Hollis, Oklahoma, free office space, double payments, payment for non reimbursed payments and other potential violations of the Stark rules.   The hospital will pay $500,000 and the physician will pay $1 million.  This is a whistleblower case. The whistleblower was the CEO of the hospital.  He will receive a share of the take. 

US v Overlook Med Ctr.

New Jersey's Overlook Medical Center has agreed to pay $9 million for over billing Medicare by billing for inpatient stays when it should have billed for outpatient.

FTC v Phoebe Putnam Health System
US Supreme Court

The US Supreme Court will hear the case in it's next session.  The case is regarding the FTC challenge to the System purchasing of Palmyra Park Hospital.  The 11th Circuit stated that state immunity protects the System from antitrust concerns by the FTC.  The FTC stated that the purchase would give the system control of about 85% of the area's healthcare.  

Doe v Kaiser
Complaint Filed

An anonymous writer sent a letter to the San Francisco Business Times as well as to the higher ups at Kaiser charging that Kaiser is non-compliant in it's real estate division.  The writer also charges that whistleblowers are punished and violators are promoted.  The writer stated that Kaiser hired architects and builders based on personal connections which may be conflicts of interest.  

Fugitives Captured

The feds have captured several fugitives from the law for healthcare fraud. The captured Godwin Nzeocha who fled from an indictment in Houston, Texas, to Nigeria.  He was extradited back to the US and arrested.  Irina Shelikhova was indicted for health care fraud in New York and fled to the Ukraine.  She was arrested when she attempted to return to the US.  I wonder how much of the alleged $70 million fraud she hid in the Ukraine prior to returning.  Miguel Cabello was indicted on healthcare fraud and he attempted to re-enter the US from Cuba.  Jose Calero was indicted for healthcare fraud in Miami.  He was caught attempting to re-enter the US from Columbia.  Another Cuban from Miami was arrested attempting to enter the country from  Cuba.  He is Rafael Gonzalez.      Top

Peer Review and Employment

California Supreme Court

The Supreme Court ruled that nurse anesthetists may give unsupervised anesthesia to the detriment of the patients of the state.  Yes, I am biased and would not allow a nurse anesthetist give me anesthesia with or without direct supervision.

Schwartz v Loyola University
ND Ill.

The physician was taken into a residency program under probation due to prior behavioral issues.  He had complaints against him soon after starting and was terminated.  He sued under ADA.  He lost since he had such behavioral issues that he was incapable of performing the required job with accommodation and therefore was not covered under the ADA.

Sharma v Ascension Health
MI Ct App

Sharma was terminated after an investigation which required him to see a psychologist instead of a physician as required in the bylaws.  He saw the psychiatrist during the investigative period.  He sued for the hospital not following their bylaws.  He lost since he waived the bylaws by seeing the psychologist.

Babb v Centre Community Hospital
Penn. Sup. Ct.

  Babb was terminated from the hospital and sued the hospital, two physicians and Geisinger Clinic.  The trial court ruled for all the defendants on all charges in summary judgment.  The Superior Court reversed on some and vacated on some.  The Superior Court ruled that the  claim of reasonableness of the termination was a matter of fact that needed to be addressed by a jury and not the court.  The physician had an expert opinion that the decision was not reasonable.  The Superior Court ruled the physicians and the hospitals were protected under HCQIA, leaving Geisinger.  The physician's claim of bias and ulterior motives against the defendants were not good claims under HCQIA. 

Weatherall Radiation Oncology v Caletri
La. Ct. App.

The radiation oncologist left the group and opened up his own shop against the Covenant not to Compete clause.  He was sued by his former group and lost.  The physician did everything wrong by not giving enough notice, not quitting for cause which would have nullified the Covenant and opening shop close by within the two year period.  The parish was small and could only support one radiation oncologist leading to significant losses by the center.  The center received the damages awarded by the lower court.      

Sheikh v Grant Regional Hospital
WD Wisc

The plaintiff physician sued the hospital for negligent inflection of emotional distress for sending a false report to the NPDB.  The court stated that the plaintiff physician has at this stage of the proceeding offered enough evidence to go forward with his case.          Top


Miles v Harbor General

In a cascading flood of errors, Willie Miles entered Los Angeles Harbor General for a knee replacement.  The surgeon accidentally cut the major artery of the leg and there was no blood to give the patient.  Another major error was the surgery was done five months after the pre-op history and physical.  When he went in for the surgery it was delayed as they attempted to decrease his high blood pressure, which should have been done earlier.  The surgery was very difficult due to prior knee surgery secondary to a car accident and secondary infections.  In attempting to dissect the knee the popliteal  artery was cut.  Six hours after the surgery began the tourniquet was removed and the bleeding started.  There was no blood ordered pre operatively so a clot was sent for T&X.  He lost five units of blood quickly and the the bleeding suddenly stopped due to cardiac arrest.  CPR resuscitated him but he got 14 units of blood and 4 units of fresh frozen plasma.  He then ballooned up in size and eventually was transferred to another hospital where he got pneumonia.  He died.  The feds and the state are looking into the fiasco.  

Berger v Chucker
DC Superior Ct.

This case should be a warning to all physicians to stay in their specialty.  Mr. Berger was a patient of cardiologist Dr. Francis Chucker.  The physician has cared for the patient for at least 16 years and according to the article was told on several occasions that he had symptoms of rectal bleeding.  Dr. Chucker did do some testing for rectal cancer but did not order a colonoscopy.  The patient after chemo died from colon cancer.  The jury returned a verdict in favor of the patient for $5 million.  If the cardiologist would have sent the patient over the years to a PCP he would have been off the hook.  If he was acting as a PCP he should be held to the standard of a PCP.  It is obviously not the standard of care for a cardiologist to order a colonoscopy, but it is for the PCP which the cardiologist was acting as. The case will be appealed.  

Fielding v Johns Hopkins Hospital
Maryland Superior Court

Fielding was pregnant and taken to the hospital by an ambulance.  She waited two hours for an emergency C-Section and delivered a brain damaged son.  They were awarded $55 million, the largest verdict ever in Maryland.  This will be reduced to $29.6 million after applying a state cap and the funds will go into trust for the care of the son.  The question was when did the fetus lose oxygen, when the mother wanted to deliver the child at home with the help of a mid-wife or at the hospital. The hospital is appealing.   

U. of Florida v Stone
Fla. Dist. Ct. App.

The Court overturned the lower court and allowed a suit to be retried where a patient went to an ED with abdominal pain and after a work-up was transferred to another hospital for surgery.  Both hospitals are run by the Univ. of Florida.  A CT done in the first hospital showed a life threatening condition but the second hospital was not aware of the finding.  The patient died at the second hospital while awaiting a surgical consult.  The jury awarded $2.8 million but the judge stated before the award that the Good Samaritan Act should not apply.  This is a matter of fact and the jury should have decided whether or not it applied before rendering a decision.        

Helfer v Chapin
NY App. Div

The patient went to the ED at Columbia Memorial Hospital and was examined by the physician Chapin.  His differential included dissection vertebral artery and did not give TPA.  The patient was watched and then transferred to another hospital where he had a cerebellar stroke with lasting problems.  The trial court dismissed the complaint since any differential with vertebral artery dissection precluded TPA and was within the standard of care.  Since the case against the physician was dismissed the case against the hospital for vicarious liability must also be dismissed.         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.