December 15, 2002 Recent Legal News


Insurers Paying Late or Not

Exclusive Contracts

Peer Review

Fraud and Abuse

Cigna Class Action Settlement







Masei v St. Mary's Med Ctr.
Penn. State Ct.

Masei, a 39 year old, died after being seen in the hospital ED for chest pains.  Blood tests and an EKG were done.  He spent 10 minutes with the ED physician and then was discharged.  He never made it home.  The case was settled for $15 million.  The reason for the large amount is that Masei was the president of a dental supply company and made $2 million per year.  The family gets $10 million and the attorneys get the rest.  What's wrong with this scenario?      

Townsend v Little Co. of Mary Hosp.
Chicago Jury

While the jury was out on this case, it settled for $19 million.  The jury awarded $20.25 million.  The unusual aspect of the case is that the plaintiff sued for a birth injury 17 years earlier causing cerebral palsy.  The reason the case could be filed so many years later was the boy's mental incompetence which did not allow him to realize he was harmed.  This of course is ridiculous since he will never know he was harmed.  If there was no settlement, the verdict should have been overturned due to the running of the statute. 

Marsingill v O'Malley
Alaska Supreme Ct.

A post operative gastric bypass patient called her physician complaining of abdominal pain.  She was told to go to the ED but was not told what could be causing the pain.  The patient decided not to go to the ED and was later found to have a permanent injury.  The patient stated the physician did not give her enough information to make a decision whether or not to go to the ED at that time.  The lower court ruled for the doctor and the patient appealed.  The Supreme Court remanded the case for a new trial based on the reasonable patient standard and not the expert witness testimony regarding the reasonable physician standard. 

Zdrojewski v Murphy
Mich Ct. App.

 The interesting cases keep on coming.  In this case an injured patient sued her surgeon, assistant surgeon, a physician assistant and the hospital.  The trial jury found for the plaintiff after hearing testimony that all were employees of the hospital.  In fact the surgeon was an independent contractor and the court of appeal ruled there was a preexisting relationship between the patient and the surgeon.  the same pre-existing condition was not present for the assistant surgeon or the physician assistant.  These were then deemed ostensible agents of the hospital and the hospital was no the hook for their actions.  Interestingly the jury let off the surgeon and only found against the hospital.        

Algeri v Arndt
Mass State Ct

The patient who was left on the operating room table while his surgeon went to the bank has filed a malpractice suit against him.  He complains of pain in the right leg.  His original surgery was for left leg pain.  

O'Regan v Lundie
NY App.

The plaintiff sued the physician surgeon and his hospital under the principle of vicarious liability for medical malpractice.  The hospital appealed their being in the case.  The surgeon was an independent contractor and the court refused to allow the vicarious liability apply to non-employees.  

James v Poppa
Mo. Supreme Ct.

The Missouri Supreme Court ruled that a physician who had been sued for malpractice for compounding a Worker's Compensation injury can be liable.  The patient worked for a hospital and the physician was a third party subject to suit.

Piselli v 75th St. Med Ctr.
Md. Ct. of Appeals 

The issue in this case is the statute of limitations and when it begins to run.  The original injury took place in 1993 and the suit was brought in 1998.  In the lower court the case was ruled over since the parents of the injured child knew of the injury in 1993.  The high court said wrong.  The statute begins when the child reaches the age of majority.  To rule that the statute should run at the time of knowledge of an injury to a child would be to place the responsibility to bring a suit on one other than the injured child, the parents.  One wonders how a high court can be so controlled by trial attorney thinking.  See next case.

Seamans v MacMillan
Iowa Ct. Appeal

In this law suit the plaintiff, the child injured at birth sued when he became an adult.  The Court through out the case since the statute of limitations is two years from discovery or six years total which ever is later.  This type law puts the responsibility squarely where it belongs, with the parents.      Top

Insurers Paying Late or Not

HCA v Humana

HCA won $8.8 million from Humana for late payments of hospital bills.  This was for 3000 Floridians in 16 HCA hospitals.  Earlier this year Humana was fined $50,000 by the state for untimely payments.  Interestingly, the money was due last month and not paid.  A court filing has been made and the matter will also be turned over to the Florida Department of Insurance.

US v Cigna

Cigna has agreed to a settlement of $24 million with the Feds for 10 years of false cost reports in a New Mexico hospital.  This is a qui tam suit filed by a man who worked for the company that helped Lovelace with it's cost reports.  He gets $4.9 million less his major attorney fees.    

Med. Faculty of Md. V Aetna etc.
Dist Ct. Md.  

Multiple physicians who provided services for the insurers sued the insurers in a class action for not paying non-contracted physicians violating a Maryland statute.  The HMOs removed the case to federal court for ERISA preemption.  The District Court remanded the case back to state court since all claims were under state law.  It also found that third party claims were not covered under ERISA. The Court went on to say that even if covered under ERISA, the Saving Clause would be enough to transfer the case back to state court.  

Bullard, MD v Humana, et al.
Ohio Ct

Dr. Bullard, an internist in Cincinnati, Ohio, sued all the insurers of the area for illegally using market power to pay physicians too little money to care for patients and less than they pay in other markets.  The difference in money may be significant.  In other markets a physician is paid about 70% of billed charges but in Cincinnati the physician only receives 35% of billed charges.  The suit states that because of the low payments, physicians are retiring early or leaving the area.  the insurers state they are not responsible for the individual actions of physicians. The four large insurers control 92% of the Cincinnati healthcare arena. The case is up for summary judgment against the physicians.   Top

Exclusive Contracts

Siegel v CHW West
Ca Ct. App.

Siegel had a contract to do overflow Kaiser cardiac surgery.  The contract was removed  after 116 complaints of abusive and critical behavior lodged by her against other employees.  She sued stating she was only attempting to upgrade care.  She lost and the judge awarded $382,387 in attorney fees to the medical center and the director of nursing.    

City of Cookeville v Humphrey
Tenn. Ct. App.  

The Appeals Court ruled that exclusive contracts for radiology services were ok in the state.  The court also ruled against a prior Tennessee Supreme Court decision Lewisburg v Alfredson which stated that those with exclusive contracts must be given the protections of the bylaws.  Here the court ruled that if removed there is no due process hearings. The Court of Appeals distinguished the Supreme Court case due to an intervening legislation and noted the Supreme Court could hear this case if it wished.   Top

Peer Review

Moore v Gunnison Valley Hosp.
10th Circ

The 10th Circ ruled that a peer review committee in a public hospital  did not have absolute immunity.  The court ruled that the peer review committee could not pass a six factor test for absolute immunity and was not an extension of the Colorado medical board.        Top

Fraud and Abuse

US v Marshall, MD

Daniel Marshall, MD of Connecticut agreed to pay $1 million for submitting false Medicare claims.  He upcoded nursing home visits.  He also submitted claims to Medicare for another physician who did not have a Medicare provider number.

US v Nazir, MD

Dr. Carlos Nazir, a Coral Gables, Florida urologist was charged with fraudulently obtain Neupogen. This cost $7500 per month and he allegedly did this with 46 patients.

US v Krebsbach

Jennifer Krebsbach worked for Tap Pharmaceuticals and she pled guilty to one count of giving away samples without a written request.  She got a $500 fine and nine months probation.  Dr. Zamstein a Connecticut urologist pled guilty in the same case.  He will face a maximum of five years and $250,000 fine. 

US v Henry, MD
Case not yet filed

This case is interesting since orthopedic surgeon Steve Henry is also the Lieutenant Governor of Kentucky.  He has been accused of billing for surgery he was not present or supervised.  He has refused a settlement since even if he settles for a relatively small amount of money, the US will file a civil suit.  this could ruin his chances of becoming governor.        Top

Cigna Class Action Settlement

Kaiser v Cigna

A Federal judge gave his blessing to the settlement of Cigna for using software to reduce claims.  The settlement was for about $55 million, a pittance of the worth of the case.  The attorneys will get over half of the settlement.  Under the settlement Cigna could continue to use the offending software.  Cigna also has to hire a third party to go over past claims and determine what needs to be paid.  The Miami case continues and those attorneys will file an argument against the terrible settlement. One wonders if the Illinois case settled because the attorneys for that case wanted money over the good of the industry.  But, that wouldn't ever happen, would it?         Top


US v Courtney

Courtney, the pharmacist who diluted chemotherapy drugs so he could make money was sentenced to the maximum, 30 years in prison, $10.4 million in restitution and a $25,000 fine.  Of course the civil suits that are pending or have been won will not be paid since the government took all the money.  

Utah v Weitzel, MD
Utah Trial Ct.

Utah finally got it right.  Dr. Weitzel was erroneously convicted two years ago for murder of five people.  He was accused of giving them morphine and other drugs to kill the people.  the defense was that these people were already terminal and the prescriptions were appropriate.  The best pain people in the country testified for Dr. Weitzel.  He was given a new trial and has now been found not guilty.  In the interim he did plead guilty to two counts of prescription fraud for keeping some of the morphine for his own use.  He faces one year in prison for that crime.  

California v Koehler
CA. State Ct.

In an interesting case coming to trial is the State of California versus a certified nurse midwife who has delivered more than a thousand babies and is loved in her community.  The midwife had stopped delivering babies after being sued ten years earlier.  The Condons begged her to deliver their child and she relented.  The baby was born after about nine hours of hard labor with a very prolonged second stage of labor with severe brain damage.  After the delivery she attempted to use oxygen for the baby but the bottles in her car trunk were either empty or close to it.  The State is charging Koehler with child endangerment.  She faces teen years in prison.  The local community has held many fund raising events for her defense and the mayor has declared a special Koehler day.  I think the State will be had press to find an impartial jury in this location.    

Florida v Warner, MD
Plea Bargain

In a plea bargain Dr. Joseph Warner, admitted taking body parts home from the hospital.  He was sentenced to a year of probation, no more body parts in the house, psychiatric counseling, repay $2,000 to the police for their investigation charges and to have no contact with his estranged wife.  The doctor used his home as a research lab and removed the hundreds of body parts from his office at the University of Florida's Neurological Science Center.  All specimens have been returned and his appointment at the University was removed.  Top


Massachusetts Law Overturned
Fed. App. Ct.

A Massachusetts law requiring tobacco companies to disclose their ingredients in all their brands was deemed unconstitutional.  This would have forced companies to reveal trade secrets, an unreasonable seizure.          Top


Barnett v Melo
Ky App. Ct.

Barnett sued Mellow for breach of privacy after Barnett who worked for a veterinary clinic got infected from a cat bite.  He went to see Dr. Julio Mello in Frankfort, Kentucky who treated him but sent a report to Mr. Barnett's employer stating that Mr. Barnett was HIV positive and had a prior cancer of the colon.  Mr. Barnett eventually left his job, he states due to the report.  The trial court tossed the case on summary judgment.  The appellate court reinstated the case for trial.        Top


St. Agnes Med. Ctr. v PacifiCare
CA Ct. App.

PacifiCare sued St. Agnes to get out of a contract with the medical center and St. Agnes countersued for specific performance.  The original agreement contained an arbitration clause and PacifiCare petitioned for arbitration.  St. Agnes said that  PacifiCare waived the arbitration clause by suing to void the entire contract.  The trial court agreed with St. Agnes but the higher court didn't.  The higher court said that repudiation alone is not enough to rescind the arbitration agreement.  there must also be prejudice as well.  There was no prejudice in this case and the case should be arbitrated.        Top


Coughlin v Health Care Svs. Corp. (HCSC)
ND Ill

Coughlin sued for a class action HCSC a health plan administrator in state court for failing to adjust claimed reimbursement liens to reflect negotiated discounts with providers.  HCSC removed the case to federal court under ERISA.  The district court agreed that ERISA took precedence over state law claims.  This is due to the attorney who filed the case asking not just for adjudication of a claim but for a contract interpretation.         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.