March 15, 2008 Recent Legal News

Fraud and Abuse




Peer Review

Medical Records


Fraud and Abuse

US v Tuorney Hosp

In a case of kickbacks and false billing, an orthopedic surgeon who was offered the kickback and turned it down has sued the Sumter, South Carolina hospital. The Government has now joined the suit as they see large penalties and merit in the case.  The hospital has been accused of civil bribery and kickbacks by the US Attorney.  The defense attorney from Horty Springer denies the charges but will capitulate later.  Horty lost the first round in court trying to get the case dismissed.  The depositions and the discovery of thousands of documents will now commence.  The hospital is accused of knowingly submitting false charges to the Government.  The physician also accused the hospital of giving Gastroenterologists and others money for each case done at the hospital instead of the competing surgical center.  There are about 19 physicians who have contracts with the hospital who will be called as witnesses.  They will all need their own attorneys since the hospital will have a different agenda.  I wonder how the hospital attorneys let the hospital get into this mess in the first place and should they be replaced by most hospitals should they lose this case. This is the same firm that was part of the loss in the infamous Community Hospital case in California several years ago.   

US v Cathedral Healthcare

 Cathedral Healthcare of New Jersey has agreed to pay $5.3 million to settle claims by the feds that they overcharged for outliers.  There were three separate lawsuits against the system.  The system admitted no liability as they wrote the check.    

US v Yale- New Haven

Yale has agreed to pay $3.77 million to settle charges that it overbilled Medicare for infusion and blood transfusion charges. Top


LA v Blue Cross

In the last Update, I stated that Los Angeles is suing Blue Cross for its rescission policies.  Blue Cross has since put out a statement that they are developing a third party review process and the LA City Attorney wants Blue Cross to prove what it says is not just rhetoric but true.

Veterans v VA

The case is currently being tried in San Francisco to force the VA into moving faster to prevent suicides in our vets.  The latest studies have shown a large increase in vet suicides but there is such a back load of cases at the VA that those that need immediate help are not getting it.  The suit wants the VA to spend its budget but the poor judge probably doesn't have the authority to tell the VA to do it. 

Patients v Hospitals
S. Car. Supreme Court

 Uninsured patients sued several hospitals to get the same discounts that insurers give to hospitals.  They lost.  There was a state law that stated he alleged stated a requirement to give all who paid their bill within seven days the best rate possible.  The court stated that the law was changed in 2006 and the insurance companies no longer use the type of contract referred to in the case.   

Hospitals v Medicare

After losing in court and on appeal Medicare settled with 667 hospitals for $666 million.  This was due to shifts in Medicare reimbursement policies in the 1980s.  This is much less than they were owed($2.8 Billion) and is much less than they will receive due to payments to attorneys.  

Buller v Sutter Health
Ca Ct. App

 Buller attempted to sue Sutter under the state's unfair competition law for not disclosing its prompt pay policy in billing invoices.  Alta Bate Hospital, a Sutter affiliate, does not tell the patients that if they pay their balances due after insurance within 30 days they can get a discount of between 10% and 44%.  The court stated that not telling wasn't fraudulent since they had no duty to inform the patient.  The court went on to say that not only was the non disclosure not fraudulent or unfair but it was good since the hospital had no legal obligation to offer privately insured patients any discount at all. Somehow the logic escapes me, but all should know about the policies and ask quickly before they get rid of them.   

Ca Back Specialist Med Grp v Rand
Ca Ct App

The California Back Specialist Medical Group (CBSMG) had rendered care to the Beltrans for injuries sustained in an auto accident.  The Beltrans had signed a medical lien allowing CBSMG to be paid following the completion of a law suit.  The attorney for the Beltrans, Rand, did not sign the lien promising to pay the organization.  The law suit was settled and Rand paid the money to the Beltrans without withholding or paying CBSMG.  CBSMG sued for breach and punitive damages.  Rand sued CBSMG as a SLAPP suit.  This is a California rule that denies suits that are against public policy.  The court not only tossed Rand's suit as frivolous but awarded $3500 to CBSMG in attorney fees.  The moral is if there is a lien, honor it.   Top


Burks v Kaiser Health Plan
Ca Ct App

Kaiser is in real trouble.  The California Court of Appeal has thrown out their current arbitration provision and has opened the door for suing the plan.  Burks showed that Kaiser has failed to show prominence to the provision and that placing it just above the signature line does not make it so.  Attorneys of California- Drop your arbitrations and start suing before Kaiser can get their keysters in gear and change all the forms.

Sutherin v Magiler
Penn Jury Trial

Following the report in the last Update, I received the following comment:

For the record, I take issue with your summary of this case (see below).  I am one of the radiologists involved, and since my portion of the lawsuit settled and never went to trial, it is inappropriate for you to comment that the mammogram I interpreted was misread.  In fact, I believe, as do many experts consulted for the case that the mammogram was read appropriately.  In the future, if you are to comment on cases like this, then you should consider the appropriate terminology, which in this case would be. The mammogram was allegedly misread.
Susan Summerton, MD
Sutherlin went to Magiler and Fox Chase Cancer Center for a mammogram.  She had had a previous breast reduction and bloody nipple discharge.  Neither of these were noted on the intake at the Center.  The mammogram was read as showing a dilated duct unchanged from two years before.  There was no dilated duct mentioned in the report from two years prior.  The following year the patient had another mammogram at Albert Einstein and read by Dr. Summerton.  This also was misread and the hospital and physician settled prior to trial for an undisclosed sum.  The patient had a Stage IV breast cancer which is terminal.  Pre-trial the plaintiff demanded $2 million.  The defendants offered $125,000.  The jury came in at $12 million and the plaintiffs had warned the defendants pre-trial that the verdict may be well over their policy limits.  Unless the judge offers a remitter, the Clinic and the physician will both be broke. 

Patients v Endoscopy Center of Southern Nevada 

In one of the worst screw-ups in modern medical history, the clinic gave multiple shots to multiple patients using the same syringes and needles.  Several have already developed Hepatitis C and are also at risk for Aids. There are thousands more at risk due to the negligence of the clinic staff.   

Vergara v Stein
NJ App Ct

 The plaintiff sued the hospital for negligent credentialing stating it had a duty to prove oversight of the physician having med mal insurance.  The court granted summary judgment for the hospital since the legislature had never made it a requirement.     

Hughes v PeaceHealth
Oregon Supreme Ct.

The Oregon high court in a 5-2 decision upheld the state's cap on non-economic damages in a med mal case.  The jury had awarded $1 million for non-economic but the statute only allowed $500,000. 

Ferrero v Shands Healthcare

A three year old went for a medical exam and was dead several days later due to multiple errors and drug overdoses.  They received $850,000 in a settlement.  The child was supposed to get a routine recommended growth stimulation test to see if he might be a candidate for growth stimulating hormone due to his small size.  The physician prescribed 5.75 grams of arginine but received from the pharmacy outpatient 60 grams.  He had a reaction and was returned to the hospital.  He had a CT scan that was misread and became brain dead.  The family is using the money to start a fund for a children's hospital. 

Fain v Westside Regional Medical Ctr.
Fla.  Filed

Fain was in the care of a fill-in nurse at the hospital when he fell out of bed and died.  All the appropriate fall prevention orders had been written but the nurse did none of the things.  The hospital has confidence in the quality of care provided by their nurses.  The plaintiff is making a big deal of the use of agency nurses at the hospital and the agency nurse who did not follow the orders.  

Singh v Providence Everett Med Ctr.
Wash. Superior Ct.

Singh went to the hospital for a cardiac bypass.  During the procedure the monitor malfunctioned and burned his heart.  The patient was injured enough to need a heart transplant.  The monitor was made by Edwards Lifesciences.  He sued and won $40.1 million including $8.35 in punitive damages.  Edwards was told to pay 99.99% of the damages and the hospital .01%. Edwards also was ordered to pay the hospital $310,000 in damages.   

Komurka v Riverside Hosp
Ca Ct App

In an unpublished opinion the court agreed that the testimony of two of the plaintiffs expert witnesses were faulty and the case against the hospital dismissed on summary judgment.  The physician made erroneous conclusions about what constituted a functional on call program and the nurse made decisions on facts she never personally reviewed.  Sounds like the plaintiff's attorney was the one to blame.       Top 


Conn. v Chiropractors

The state reached a settlement with the several chiropractor groups who had boycotted Anthem.  The groups admitted no wrongdoing but were fined $87,000.  They had encouraged their members not to do business with Anthem and form a new network.        Top

Peer Review

Harris v Bradley Mem. Hosp
Conn Super. Ct.

An article in ABA Health eSource describes the case where the physician was given a summary suspension and there were competitors on the peer review panel.  The physician lost the hearing and the appeal to the Board.  The physician then sued the hospital and physicians involved for the usual torts and won in the trial court. Connecticut has no writ of mandamus action as does California to overturn prejudicial decisions.  The court ruled that since the physician did not win in the hospital, the courts would not overturn the decision.  The article quotes the Supreme Court of California decision in Westlake Community Hospital v Superior Ct.  This decision stood for not what the author states that those who lose in the hospital can not sue.  It does state that one must exhaust all administrative remedies prior to suit and that the routine use of an exculpatory clause in the bylaws is void as against public policy.  The underlying case was rightly decided under Connecticut law but not in other states as intimated in the article.  

Blume v Marian Health

In his Blog, Michael Cassidy states that the Iowa Supreme Courts decision in the above case is wrong.  Michael is of course correct.  Many of California Courts have this same verbiage of protection but were found to be unconstitutional as exculpatory in the Westlake case.  So it depends on the state one is in for the interpretation of the same words.      Top

Medical Records

Waterman v Buster
Florida Supreme Ct.

The Court in a 4-3 decision has declared parts of the voter passed law regarding hospital medical records illegal.  The court stated that patients have a right to see their records and ask for corrections no matter how old the records.  The hospitals wanted the law to only go back to the passage in November 2004. This makes Florida on a par with the Federal law which has no peer review privilege. The hospital and physician attorneys in the state are most unhappy but remember that this state Constitutional Amendment was put up by the state's med mal attorneys.       Top


Fox Valley Thoracic v Ferrante
Wisc Ct App

A covenant not to compete was too broad and therefore unenforceable.  Ferrante was a heart surgeon hired and in his contract a one year restriction in three cities and a 30 mile radius around these cities.  Ferrante quit and opened his own practice in the same building as the group.  Apparently the group's main referrer started to refer to Ferrante and the group's practice withered and died.  They then sued and lost again on all counts.        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.