June 15, 2009 Recent Legal News





Peer Review



US v Brown

The US has arrested several Tenet Palmetto Hospital employees in Hialeah, Florida, for theft of patient identities and use for illegal purposes.  Brown stole the identities and gave them to Barbary who made unauthorized credit card purchases.          Top


Patients v VA
To Be Filed

The VA in multiple settings screwed up on their sterilization processes.  This led to over 10,000 people getting tests for HIV and Hepatitis. Several of them turned up positive but no one knows if they were positive before.        Top


US v MedQuest

The government has filed charges against MedQuest and three of its companies for Medicare fraud.  The radiology companies are accused of going against the rules of doing MRIs and CT scans with contrast without a certified radiologist present.

US v Queen's Hosp

 In a whistleblower suit Hawaii's largest hospital has agreed to pay $2.5 million for overcharging by sending fake bills for anti-psychotic meds.  The hospital was also accused of billing for medical resident services that were not overseen by attendings as required by law. 

US v Williams

Eleven people were indicted for Medicare fraud and selling painkillers to fake patients.  They sold over $5 million in OxyContin using fake prescriptions.  Again it took several years to catch the crooks and the money can never be recouped.

US v Alta Bates Medical Group
Consent Order

The FTC accused the Alta Bates Medical Group of Berkeley, California, of illegal price fixing.  They are accused of bypassing the member asking part of the messenger system.  They will be forbidden to not utilize the messenger system. This did not affect the IPA and HMOs. The Medical Group denies they did anything wrong.       

US v Hoffman-Valle
11th Circ

Dr. Marsha Lynn Hoffman-Valle, a Florida Dermatologist was first found in 1999 to have abarrant billing practices.  She was investigated and when her records were confiscated there were some missing.  When these were handed over pictures of the patients were missing.  She was convicted in federal court of healthcare fraud, false claims and obstruction of justice due to the having her staff remove pictures prior to the records being sent to the grand jury.  She was sentenced to 78 month in jail, fined $12,500, and ordered to pay $504,068 in restitution to the patients and insurance companies she duped.  She was also ordered to forfeit $707161 to the government.  She appealed all and the 11th Circuit affirmed all the verdicts and penalties except they found an error and reduced the amount forfeited to $695,742.  

US v Hogan

 Houston's Ene Etim Hogan pled guilty of Medicare fraud by billing for more incontinence supplies than he actually delivered.  He would bill for the most expensive and the largest size no matter what was delivered, if anything.  He billed for over $1 million and received $680,000 in fraudulent claims.

US v Long

Christopher Long of Missouri billed Medicaid for never delivered home health services.  He was in jail when he billed for the services and then used the money for bail.  

US v Univ of Med & Dentistry of NJ

There is finally a settlement in the decade long accusation of double billing by the University.  They will pay $2 million to settle the case. There was also a prior settlement of $4.9 million for criminal deferment in the same matter.  The whistleblower in this case will get over $800,000. 

Medical Mut. of Ohio v Schlotterer
Ohio Supreme Ct.

Medical Mutual Insurance company is suing Dr. Schlotterer for medical fraud.  They wanted his records and he refused to give them up without patient consent.  The Supreme Court in a split decision stated that the patients gave permission when they signed up for insurance, even though the permission was in the section on claim review and not for a law suit between the physician and the insurer.  The high court gave a new exception to the physician patient privilege.  They said that if the insurer made a prima facie showing of fraud that could not have been discovered with the exercise of due diligence within the two year period after payment was made and also demonstrated the consent of the nonparty patients could not be obtained that their individual consents would not be necessary.    Top


Med Bd Calif v Roozrokh
Charge Dropped

Dr. Hootan Roozrokh, the Kaiser surgeon accused and acquitted of adult abuse for hastening the death of an organ donor, had the charges against his license dropped by the state attorney general.  The attorney general said that they could not meet the burden of proof necessary.  

Norsworthy v Kentucky Bd
Kentucky Supreme Court

Dr. Norsworthy had 16 sexual complaints against him in 19 years of licensure.  The Board restricted his practice to only male patients.  He sued stating that this would cost him 70% of his practice.  The trial court issued an injunction against the Board but this was overturned by the Court of Appeal.  The Supreme Court agreed with the court of appeal in that the loss of 70% of his practice did not give rise to an irreparable harm.  The Court also found it was unlikely the physician would succeed in trial court on the merits.

McCartney v PA Comm of Cal Med Bd
Ca Ct

The Physician Assistant (PA) McCartney saw a female patient in the ED with left arm pain but no other symptoms.  She was treated with pain pills and discharged according to protocol.  She died the next day of an MI.  The Medical Board disciplined the PA and he sued.  He won in all the courts with the brunt going to the poor protocols of the hospital. 

Natl. Assn of Optometrists v Brown
9th Circuit

The Association, LensCrafter and Eye Care Center of America sued California for its statute that prohibits opticians from offering prescription eyewear at the same location in which eye examination are provided.  They say it violates the Commerce Clause.  The 8th Circuit disagreed.  Since most opticians are multi state companies they feel they are being singled out under the Commerce Clause.  The Court said that the rationale was to protect California's optometric profession from being taken over by large business interests.  Opticians are not licensed but Optometrists and Ophthalmologists are.  The case was sent back to the district court for LensCrafter to have the burden to prove that the law is more burdensome than beneficial. 

Ames v Washington Medical Board
Washington Supreme Court

Dr. Ames had is license disciplined for using an unapproved device called LISTEN to test for egg allergy.  Dr. Ames stated that he could not be disciplined since no expert witness testified against him.  The high court said none was necessary.  The Board could make their own interpretation.    Top

Peer Review

Stratienko v Chattanooga-Hamilton Hosp
ED Tenn

Dr. Stratienko got into a shoving match with another physician and was suspended for 30 days.  He sued and lost.  The physicians that he sued then sued Dr. Stratienko for attorney fees under HCQIA.  In order to collect attorney fees under this law the defendants are covered under the law, the four standards were followed, the defendants substantially prevailed and the plaintiffs claim or conduct during the litigation was frivolous, unreasonable, without foundation or in bad faith.  The Court went first to the last aspect and said the plaintiffs claim was legitimate based on the speed at which the suspension took place and the procedures that were followed.  Therefore no attorney fees are allowed.  The Court went on to say that under HCQIA, there is nothing that precludes filing prior to the end of the administrative hearings.

Hughes v St. James Hosp
Montana Supreme Court

Dr. Hughes had a reprimand for sexual misconduct and admitting at the Medical Board that his actions were unprofessional.  He had a hearing with counsel at the hospital when his privileges were revoked.  In his argument he challenged the Montana peer review statue as unconstitutional but the attorney did not notify the state attorney general of the case in the requisite time.  This was therefore dismissed as untimely.  The Court also dismissed all of the physician's other claims as well since he had agreed his actions were unprofessional.        Top


Hospitals v CalOptima

Eight southern California hospitals have sued the Medicaid intermediary CalOptima and Pacific Health who pays some of the bills for CalOptima.  The hospitals claim $1.2 million has not been paid and that the two defendants blame each other.  The hospitals are also seeking interest owed and attorney fees.  The suit also accuses CalOptima of negligence in dealing with Pacific Health who was in a financial decline in the years prior to CalOptima contracting with them, that they knew Pacific Health was unable to pay.        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.