May 1, 2015 Recent Legal News






Peer Review and Employment


US v Mahmood

Dr. Tariq Mahmood of Cedar Hill, Texas, was sentenced to 13.5 months in federal prison and pay $600,000 in restitution.  He was found guilty after a four day trial of multiple health care fraud.  The GP owned several small hospitals in Texas and manipulated the codes to get more money than what was allowed.

US v Melgen

Dr. Salomon Melgen of North Palm beach, Florida, was indicted for 46 counts of healthcare fraud, 19 counts of making false claims and 11 counts of making false statements.  He is alleged to make false entries on patient charts to falsify the diagnosis of macular degeneration and to purchase single vial meds for the treatment then use the meds on more than one patient but bill as if each one got the full vial.  He is accused of doing diagnostic studies on people with blind eyes or prosthetic eyes.  He was arraigned on April 15.

US v Ordog

Dr. Gary Ordog of Valencia, California, was indicted for billing Medicare for services never performed.  He did initial toxicology testing related to mold and chemical exposures.  Years later he allegedly would bill for patient visits never done.

FTC v Cardinal Health

The FTC has ordered Cardinal Health, a distributor of radiopharmaceuticals, to pay $26 million.  This is to be held in trust for the consumers to get.  They are said to have kept out GE and Bristol Meyers using anticompetative maneuvers.  The order needs to be approved by the courts.

Parikh, et al v Citizens Medical Center

Three whistleblowers filed sit against the hospital for false claims actions.  The hospital has settled by agreeing to pay $21,750,000 for paying cardiologists more than the fair market value and paid ER physicians according to their cardiology referrals.  The whistleblowers will split $6 million.

US v Family Dermatology PC

Family Dermatology of Georgia has agreed to pay the feds $3.2 million for illegal self referrals.  The entity had a dermatopath lab and required its employed and independent practitioners to use the lab.  

US v Murray

Dr. Winston Murray of Hammond, Louisiana, pled guilt of healthcare fraud for wring prescriptions for home health equipment to people who were not homebound.  

US v Morgan

Dr. Joseph Morgan III of New Orleans was sentenced to 8 years in federal prison for operating two pill mills.  This is a reduced sentence for cooperating in the investigation of police officer Donald Nildes.  Nildes would tell how to operate the pill under the radar in exchange for money and sex from the co-administer of the clinic.  Nildes committed suicide after pleading not guilty.

US v Medical Center of Central Georgia

The hospital agreed to pay a fine of $20 million for violating the FCA by billing for more expensive inpatient services instead of observation.  They also entered into a five year CIA.

The Ninth Circuit has refused to re-hear or do an en-banc hearing of the St. Luke's case in Idaho.  St. Luke's is still contemplating a move to the US Supreme Court.        Top


Johnson v US
7th Circuit

Congressman Ron Johnson has lost again.  He sued to overturn the Obamacare rule that allows Congress and their staff to keep subsidies and join exchanges.  This was an Obama executive action.  The court again denied the suit due to lack of standing, as did the lower court.

Michigan Catholic Conference v Burwell
US Supreme Court

The high court ruled that the 6th Circuit should reconsider its ruling backing the feds on the matter if the Conference need pay for contraception .  The court stated the lower court should follow the Hobby Lobby ruling.        Top


US v Knapp

Jamie Knapp, a former respiratory therapist at Bay Park Hospital in Oregon, was indicted for illegally obtaining patient information on 600 patients.  She was seen going into patient rooms and removing the sharp containers.  She stated her supervisor allowed her to get the information for prepping for a certification test. 

Patients v Denton County
To Be Filed

 An employee of Denton County Health Department left a thumb drive at a local printing store with the information on 674 patients. The patient under fed law are being offered credit protection even though no financial information or social security numbers were involved.  The drive was left unattended for about one hour.

Patients v Seton Family of Hospitals
To Be Filed

The information on 39,000 patients was compromised during a phishing attack. Another example of the wonderful EHR and the lack of security by hospitals.        Top


Mixon v Broson Health Care
WD Mich

In a huge attorney screw up, the plaintiff delivered a live newborn at the hospital who died minutes later.  She sued as the plaintiff not as the estate of the newborn not under the state malpractice statute but under the federal EMTALA statute.  Dumb!  She lost as she had no standing and there was no disparate treatment.

Iilczyszyn v Southwest Air

The wife of the deceased filed suit against the airline.  He was on a flight in September where he died of a pulmonary embolism.  The flight attendants heard sounds from the restroom but were unable to pry the door open all the way.  They could see a foot pried against the door and called the sheriff for an unruly passenger.  They say they could have called medical people for him and established air for him and saved his life.  Good luck with that.

Brady v Urbas
Pennsylvania Supreme Court

Urbas, a podiatrist, did four procedures on the plaintiff.  She sued him alleging he did malpractice in three of the procedures.  At trial Urbas showed the consent form that showed she ws aware of the potential complications.  The plaintiff sought to exclude the consent evidence as confusing and not relevant.  The jury ruled for the podiatrist and the patient appealed.  The high court ruled the consent should have not been allowed to be introduced.  The plaintiff did not argue lack of informed consent but negligence.  The court also said there is no assumption of the risk defense available to the podiatrist.  The court did not rule out consent evidence in all cases since it might be reasonable in cases if the standard of care required the physician to discuss certain risks with the patient.

US Woman v Contreras
To Be Filed

An unidentified woman became the fourth woman and the second American to die this year in a Dominican Republic plastic surgery office.  Dr. Edgar Contraras who owns the clinic where this woman died has been the subject of three other probes by Dominican investigators over the years.  This woman had a liposuction procedure.  Last year 19 women developed serious mycobacterial infections following cosmetic surgery in the Dominican Republic.

Pouzharis v Prime Healthcare
California App Court

The patient at the hospital had a slip and fall injury on a recently mopped floor without a warning sign.  Two years later the patient sued and the hospital defended and won in the trial court on the premise that the case was filed after the one year statute of limitations under the med mal statute.  The appeals court reversed stating this was ordinary negligence and okay for the two year statute. This was not professional negligence under a medical malpractice statute.

Patients v Takeda Pharmaceuticals

The company agreed to pay $2.4 Billion to settle thousands of suits by Actos users stating the drug gave them bladder cancer.  They did not admit liability in the matter but in one case last year the jury awarded a patient $9 Billion reduced to $36.8 million.  To date Actos has accounted for over $24 Billion in sales for the company.  It is now available in generic.  

Patients v Thomashefsky
To Be Filed

Dr. Allen Thomashefsky of Santa Barbara, California, has hepatitis C and now at least five of his patients have the disease as well.  The public health office investigated the office, found bad infectious disease practices and closed the office in March 2015.  He had been doing prolotherapy and has a practice in Oregon.  That office is also under investigation and ordered to stop performing injection procedures.        Top


Iowa v Rayhons
Not Guilty

Last issue I published a story about the former legislator who was accused of raping his wife, an Alzheimer patient in a home.  This was an interesting consent case started by the wife's daughters and pursued by the state.  He stated that all he had done was kneel, pray and hold his wife's hand.  Nobody witnessed any sexual intercourse.  The rape kit was negative.  The jury said not guilty but gave no reason.

New York v Moschetto

Dr. Anthony Moschetto, a cardiologist, was accused of conspiracy to murder.  The state believes he paid someone to beat and murder a fellow cardiologist so he could get his practice.  He failed as the plot was discovered during an unrelated investigation of Moshetto for narcotic prescription abuse.  The two were partners but had a falling out and now practice separately.  He is accused of attempting to kill his ex partner with arson and then offered an undercover cop money to assault and more money to kill him.  He pled not guilty and is free on bail.        Top

Peer Review and Employment

The cases below again show that suing after the fact in health employment situations is a waste of time and money. It is so much better to get a negotiated settlement in the beginning or better yet win at the early stage. This can be done with the help of an attorney or with the help of a person who is not bound by the rules of law.  The latter is better and cheaper.

Sanchez v Bumann

Some people are too stupid to be allowed to do anything.  An anesthesiologist reported the Chief of Anesthesiology to the hospital for inappropriate conduct.  The Chief then falsely reported the anesthesiologist for a drug problem and incompetent.  The anesthesiologist sued the Chief.  The Chief filed a motion to dismiss because his statement were absolutely privileged since he was obligated to report the others misconduct.  The court found the Chief was not entitled to an absolute privilege since he was not compelled to make the statement.  The bylaws were not codified laws and therefore do not create a legal duty.  He should never have made the false statement in the first place.

Odelugo v PCC Community Wellness
ND Ill

In another case that is a loser from the outset, a physician sued several physicians and a community health center for discrimination on race, national origin and age.  She said the made some slurs.  In fact, the fellow had significant quality problems documented.  This made her claims ridiculous and the case was dismissed on summary judgment.

Goh v Dept. of the Air Force
ED Cal

The physician erred on a patient and this led to multiple reviews of his charts.  It was found that there were substantial problems with his care.  He went through all the hearings and lost in each one which led to the restriction of his privileges.  He sued since he believed there was no evidence of poor care.  He said since no person suffered adverse outcomes there could be no practice beneath the standard of care.  The court said the arguments were not germane and were contrary to common sense.  He obviously lost.

EEOC v Lakeland Eye Clinic

The clinic fired a person who was the Director of Hearing Services because he was transgender and began to appear as a woman.  She had performed all her duties satisfactorily.  The clinic agreed to pay a fine of $150,000 and implement new gender discrimination policies.

Golden v California Emergency Physicians Med Grp
9th Circuit

In an interesting case Golden was removed by CEP after he was removed from the medical staff at a hospital.  He sued for racial discrimination and while in open court a settlement was reached where he would be paid a negotiated amount and he would waive all right to future employment at any medical facility that CEP owned, acquired or contracted.  Golden later repudiated the agreement stating that California BP Code 16600  states that "every contract by which anyone is restrained from engaging in a lawful profession trade of business of any kind is to that extend void"  The district court ordered the settlement be enforced since 16600 only applied to restrictive covenants.  The 9th said in a 2-1 decision that the statute never mentions anything restricting it to compete clauses therefore it is an valid defense if the settlement agreement actually constitutes a substantial restraint on Golden's medical practice.  He can practice at all other non CEP hospitals.

Clark v Broward Hospital District
11th Circuit

Dr. Clark, a female employed physician, was in the critical care department.  She had the responsibility to make schedules for the physicians.  The directorship of the department became vacant and she was told not to apply since she was too confrontational and direct.  A male surgeon was chosen as the interim director.  Clark complained she was passed over since she is female.  A month later the interim director called a meeting of all physician due to complaints about the schedule.  In the meeting several male physicians stated Clark was intimidating and created unbalanced schedules.  Clark left abruptly and took a two month leave of absence.  A few days later Clark was locked out of the scheduling system and the interim director took on the scheduling duties.  She filed a gender discrimination complaint with the EEOC.  The hospital investigated and found no discrimination but that she had many interpersonal problems.  She also applied for he directorship which was given to another.  She then took a three month leave.  A year later complaints came in regarding Clark for bullying.  An investigation confirmed the allegations and Clark was fired.  On cue she sued for gender discrimination.  The district court ruled dismissed her suit.  The 11th Circuit agreed with the district court.

Varugnese v Mt. Sinai Med Ctr.

Dr. Varugnese was a pathology resident who was fired after an escalating series of actions including reading confidential files in anther physician's office.  She also had absenteeism issues and rudeness.  She sued for gender and race discrimination.  She defended herself and claimed the other residents drank alcohol at the hospital (whistleblowing).  The court did its own investigation of the records and came to the conclusion she was fired for cause.  She presented no evidence of discrimination only conclusory allegations.  The whistleblowing came after an academic warning.  

Valfer v Evanston Nw. Healthcare
All App Ct

Dr. Valfer was denied reappointment to the hospital staff after a peer review committee found that half of his surgical cases lacked indications.  He sued for monetary damages for loss of his reputation.  He stated that the hospital went against its bylaws by allowing competitors to review his charts and testify against him.  The hospital stated and the court agreed that it was immune from suit under the state's peer review statute (not HCQIA).  He appealed and lost again since he needed to prove the hospital acted willfully and wantonly but did not.  

Murphy v Goss
D Ore

Dr. Murphy, an anesthesiologist, was found to have one or two glasses of wine while on cardiovascular call.  This was a violation of hospital policy.  The Oregon Medical Board filed charges against him and issued a final order for unprofessional conduct.  The OMB then reported him to the NPDB and checked the box for this action did or could have adversely affected the health or welfare of patients.  Murphy sued for no due process or equal protection.  The OMB moved for dismissal under the HCQIA law and this was granted since there was no evidence that the board knew the report was false.  Since the physicians employment was not terminated none of the complaints were made in connection with the termination of plaintiff's employment.  The equal protection claim was equally tossed.        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.