October 1, 2006 Recent Legal News


Healthcare Payments




Peer Review

Illegal Payments




Doe v Cross Cancer Institute (Canada)
To Be Filed

A 40 year old woman was sent home from the institute with a pump to deliver chemotherapy.  The pump was mistakenly set to deliver the drug over 4 hours instead of 4 days.  She died from organ failure and internal bleeding.  They deny any negligence and state that the nurses involved are experienced.  The Institute met with the family and expressed their regret.  They state the family understands it was an accident.  The hospital has changed its system allowing the patients sent home on pumps to remain in the hospital for a whole hour prior to being released.  The drug dosages are now triple checked instead of only double checked as they were in this case.  The Institute stated that the error was not due in any way to the funding and staffing pressures faced by healthcare facilities in Alberta. This usually means it was.  

Cleveland v Mann
Miss. Supreme Ct.

Mann died after multiple surgeries for gastric cancer.  His heirs sued for wrongful death.  The patient had signed an arbitration agreement with the physicians and the clinic where he worked.  The trial court stated the arbitration agreement was unconscionable and therefore void.  The Supreme Court stated it was valid and that a suit could not be filed.  The agreement also applied to the "heirs at law".

Seeber v Ebeling
Kan. Ct. App.

Seeber was injured and taken to the St. Francis Medical Center.  The ED physician examined Seeber and determined he needed neurological care.  He called the neurosurgeon on call Dr. Ebeling.  Eberling stated he was too fatigued to come in and recommended an orthopedic physician.  The Orthopod refused the case as well since he did not do spinal cord injuries.  The patient was transferred to another hospital.  He had a C7 fracture with complete paraplegia.  At summary judgment the court ruled there was no patient physician relationship.  The Court of Appeals affirmed.  The court stated that being on call was only to be available for consultation not to come to the hospital for patient treatment.  The court said that Ebeling was not voluntarily on call and so had no duty to notify the hospital if he could not take call.  I am not sure this decision would be the same in many other jurisdictions. 

Wilson v Merritt
Ca. Ct. App.

 The California Court of Appeals reversed a summary judgment for the defendant physical medicine physician on the issue of informed consent.  The patient saw the physician and recommended physical therapy for a shoulder.  This was done by a chiropractor under anesthesia with Dr. Merritt assisting.  The plaintiff claims that Dr. Merritt did not tell him about the risks and he ended up with a fractured shoulder.  The physician stated that since he wasn't performing the procedure he did not have to obtain informed consent.  The court stated that it was a fact for the jury whether the physician was merely a consultant or in charge of the case.  The case against the physician goes to trial. 

Moore v Chendrasekhar
Iowa Superior Ct.

The patient stated that the physician acted too slowly after signs of an intestinal leak following gastric bypass surgery.  She won $1.5 million.  This is the surgeon who has had other malpractice suits against him for gastric bypass procedures.  The doctor agreed in the past to discontinue the surgery and had left the state to practice in New York.  His Iowa license is also up for potential removal. 

Keogh v Midwest Center for Reproductive Health

 Mr. and Mrs. Keogh had infertility treatments and four eggs were fertilized.  Two were used and two stored.  The problem was the two to be stored were over-frozen and were destroyed.  The Keogh's are seeking $50,000 for emotional distress.  They do have a son born from the first IVF.  The clinic admitted that a number of embryos were accidentally destroyed in the lab on one night. The Keoghs attempted to reach a settlement but were unsuccessful.  The clinic stated the embryologist was responsible and he was an independent contractor. 

Arrington v ER Physicians Grp.
La. Ct. App.

The Louisiana Court of Appeals struck down the 1975 law that limited recovery in med mal to $500,000.  They certified the matter to the Louisiana Supreme Court who stated that the lower court should hear the case first.  They now have and it will go back to the Supreme Court.  The sole rationale is that the original $500,000 decreed in 1975 is only worth about $160,000 in today's dollars.  This should be the province of the legislature and not a judge.  

Johnson v Western Montana Clinic
Montana Supreme Court

The plaintiff was killed as were the passengers in an automobile hit by a patient of the clinic.  The plaintiffs stated that the clinic knew or should have known the patient was not fit to drive and notified the State.  The lower and upper courts all agreed there was no duty to the plaintiffs.  The Montana law states the physician who diagnoses a physical or mental condition that will impair the persons ability to drive MAY report the person.  The plaintiff wanted this to be gross misconduct and therefore liability.  The legislature never intended even gross negligence to be compensated and therefore stated may report.

Hancock v Schorr
Fla App. Ct.

 Hancock was in an auto accident and had multiple preexisting medical problems.  The ED physician contacted the patient's physician, Dr. Schorr, and they decided he did not have to be admitted for the accident but should be followed within one day either by phone or in person.  The wife called the office the next day and was told since the patient had a appointment for an MRI soon, he did not have to be seen that day.  There was no call back to the physician an the patient died three days later post accident. The physician who performed the autopsy felt that trauma of the accident along with the prior high blood pressure caused a fatal arrhythmia.  The plaintiff's experts also testified that Schorr was negligent in not admitting the patient and ordering additional tests.  The trial court jury went for the plaintiff in the sum of $2 million and this was overturned on a directed verdict by the judge.  There was no causation proved.  The appeals court overruled the trial judge and reinstated the verdict stating that causation was proved by the expert's testimony.  There was a dissenting opinion stating the causation was based on speculation and not fact.  

Long v Woman's and Infants Hosp.
RI Superior Ct.

 The Court agreed with other court's around the country that requested documents that are prepared by a hospital under the normal course of business are not protected.  The plaintiff wanted and after this case received an occurrence screen.  The hospital attempted but failed to prove this was prepared under the attorney client privilege.  The attorney did not direct the hospital to make the report.           Top

Healthcare Payments

Blue Cross Florida v Florida Hospital
Fla. Ct. App.

Florida Hospital sued Health Options, a subsidiary of Blue Cross of Florida for underpayments to the hospital.  The insurer wanted to pay 120% of Medicare and the hospital wanted full charges.  The trial court gave summary judgment to the insurer but that was overturned by the court of appeals who stated the trial may proceed.  Blue Cross will appeal to the Florida Supreme Court.  Another case over the same set of facts went to the Supreme Court in February and there has been no decision in the earlier case.  Both sides want the legislature to give clear definition as to what can be billed and paid. 

Patients v U. of Washington Med Ctr.

 The University of Washington as agreed that their policy on uninsured patients may not be clear enough.  The University will have tools for patients to understand the policies with more clarity.  The patients will be able to find out what their out of pocket expenses will be after insurance payments.  The hospital will also decrease its minor surgical charges by about 25%.    

Hawaii Med Assn. v HMSA
Hawaii Supreme Ct.

 The Supreme Court ruled that HMA could sue on its own behalf as well as for its physicians against the Hawaii Medical Services Association for low payments and delayed payments.  The tort of interference with economic advantage held since there was enough alleged to overcome the summary judgment motion.  The HMA could sue on its own behalf since it had expended alot of resources on this problem.  The individual provider contracts that required arbitration did not hold since the case was filed collectively and not individually.  It appears another insurer will pay millions for their past misdeeds.  

Med. Society of New York v UnitedHealth

The Society and individual physicians filed suit against UnitedHealth and Oxford for their stand of the physician must either join both or none.  This is a class action suit on state antitrust grounds.   

Patients v CHW
Ca. Superior Ct.

A settlement involving CHW and their billing practices for uninsured patients has been approved by the Court.  The settlement provides for a 35% reduction on all bills to all uninsured patients seen and billed since July 1, 2001.  This is about 700,000 patients.  If the uninsured paid more than that amount, they will get a refund.  Originally CHW had proposed a sliding scale reduction which would have had the poorest patients pay nothing.  The egalitarian court didn't like the unequalness and would not approve the settlement.  Now there will be more bankruptcies. Thanks Court.    

Vine Street v HealthLink
Illinois Supreme Ct.

Vine Street is a psychiatric group that sued the middleman for their contract provision of the physicians paying the insurer a percentage based fee.  The Supreme Court agreed with the physician that this is fee-splitting and illegal.  The contract also had a flat fee provision and this was legal. 

Patients v Medicare
Federal Judge

A federal judge stated that Medicare must stop their collection efforts for the mistaken money sent to patients for premiums for Part D.  The CMS must send to all the recipients of the mistaken refund a notice that each has a right to request a waiver of the refund to the government because of hardship.  Any money already returned to the government must be returned to the people in order for them to decide whether or not to request a waiver.  The amount of beneficiaries are about 230,000 and the amount is a mere $50 million.        Top


US v Marion County Med Ctr.

The hospital has agreed to pay $3.75 million of taxpayers money to settle the allegations that they rewarded physicians that admitted alot of patients.  The compensation they paid two physicians far outweighed the amount their services were valued at.  It is also alleged that some of the services were medically unnecessary and others were upcoded.  This was a qui tam case and the DO that blew the whistle will get $610,000.  This is nothing to be proud of and no one pays this amount of money for a technical violation, only for intentional acts.

US v Gokhman

The District Court in Milwaukee has ordered a real estate developer to pay to the government $90,000.  This is $5000 per violation of Medicaid claims.  This is part of a civil case against Boris Gokhman where he filled out false time cards for his parent who were clients of a now defunct Home Health Agency.  He stated on his time card that he was caring for parents on 650 consecutive days.  Part of that time he was on the road.  Gokhman's wife was ordered to pay $145,000 and the wife of Gokhmam's business partner had to repay $135,000. 

Florida v Iglacias

The state charged three men with fraud for billing Medicaid for equipment that were not prescribed by the physicians listed on the Medicaid forms.  The prosthetic devices that were billed for never reached the patients.  If convicted the potential prison terms are from 25 years to 60 years. 

US v Ahmad

 Dr. Muhammad Ejaz Ahmad and his brother Muhammad Nawaz Ahmad, a pharmacy owner along with Mohammad Tanveer, a pharmacy tech were arrested in Brooklyn, New York, for conspiracy that cost Medicaid millions.  They billed for high cost HIV meds that were never needed nor given.  The physician used fake patients, paying each $40, more than Medicaid paid the physician, to go to the physician or the pharmacy.  

US v Herman
Guilty Plea

Dr. Steven Herman of Westport, Connecticut, pled guilt in US Court of tax evasion, illegal structuring of financial transactions and health care fraud.  He skimmed $883,000 without paying taxes. Dr. Herman agreed to pay $375,000 in back taxes as well as forfeiting $236,000 used in the illegal operations.  He also admitted he billed for operations not performed.  He still faces a possible fine of $850,000 and 25 years in prison.  

California v Tate

 Dr. Tate was the radiologist at the ill fated Drew King Medical Center that was paid for marathon shifts reading x-rays.  He is being charged with tax evasion for 2004.  He was paid for 20 hours a day seven days a week.  Dr. Tate states he has never received any notice of tax owed.   

US v Bradford Reg. Med Ctr.

This was a qui tam suit by a physician group who claimed the hospital did an illegal cost report when it wanted payment for patients were were illegally referred by physicians who had a lease agreement with the hospital.  The plaintiff physicians did not provide specific information about the illegal referrals but that is not necessary sayth the court.  This was enough to let the plaintiffs win the summary judgment.    Top


Gentile v St. Elizabeth

Dr. Gentile was scheduled to work on call for ENT back-up for St. Elizabeth Hospital in Youngstown, Ohio.  He asked for a change in the rotation to attend a conference.  The change was denied by the EMT chief.  He was told that if he wasn't available he would be disciplined.  Rather than be disciplined, he did the correct thing, he resigned from the staff and went to the meeting. The hospital was not happy and terminated his contract for treating facial trauma.  He then sued for antitrust the hospital and the ENT group that refused to cover for him.  He lost at summary judgment on all counts.  The doctor and his attorney forgot to allege an injury since he did not describe the market injury nor was there any description of any competition reducing effect of the defendants action.  It should be noted that Dr. Gentile was the only member of the department not owned and operated by the hospital.   

Abraham v Intermountain
10th Circ.

A group of optometrists sued Intermountain for not letting them play in their schoolyard. One of the reasons were letters from ophalmologists to Intermountain wanting to keep the optometrists out.  Both were sued for antitrust and the defendants won.  Although  Intermountain is a monopolist, there was not enough proof of conspiracy even though Intermountain acted on the ophthalmologist's letter.  Also there was no evidence to suggest any pressure on panel members not to refer non-HMO patients to any provider.   

  Peoria Day Surg Ctr v St. Francis

The outpatient surgical center has filed suit against the 600 bed hospital for antitrust violations.  The Center states that the hospital has used boycotts, tying arrangements and exclusive contracting to attempt to monopolize outpatient services.  The center does about 4700 surgeries a year compared to 14,000 at St. Francis.  The suit states that St. Francis bullied the physicians that pledged to support the Center to back down.  I'm sure a nice Catholic Hospital like St. Francis in my old home town would never do anything so crass as bully a physician.  Hah!! 

Physicians v Regence Blue Shield

Regence Blue Cross has used the old letter to the patients ploy.  They set up an exclusive network of physicians and sent letters to the patients of those who were not selected stating their physicians were not good enough.  In fact, they were good enough but weren't cheap enough.  The suit is being backed by the Washington Medical Association. The suit wants an injunction from starting the new system and money for those physicians defamed. 

Kochert v Greater Lafayette Health
7th Circ

Dr. Kochert, an anesthesiologist, was removed from her position due to a merger of two hospitals and an exclusive contract with a group that she did not belong to.  The slight problem was that by the time of the merger she was already a full time pain management physician and so there was no injury.         Top


Nazaire v Kingsbrook Jewish Hosp.

The parties had entered into a settlement agreement allowing the physician to return to work in the ED.  Part of the settlement was that the ED physicians be board certified.  The plaintiff flunked his Boards and was removed.  He sued but the court stated that he did not keep his side of the bargain. 

Leon v IDX
9th Circ

Dr. Leon sued IDX for retaliatory discharge after he complained of alleged irregularities.  Dr. Leon not only lost his case but was fined $65,000 for destroying evidence on his laptop.  

Thompson v U. of SC

The District Court allowed the defamation suit against the University of South Carolina to go to trial.  Dr. Thompson sued the chief of his Department for making defamatory remarks about him in open meetings and heard by both staff and patients.  He had no qualified immunity since there may have been malice.  To trial.        Top

Peer Review

Poliner v Texas Health Sys.
DC Texas

As I am sure most realize that this case is a marvel of poor judgment by the hospital and physicians involved.  Dr. Poliner was awarded $366 million, $166 million actual damages, and the case was upheld on appeal.  Now the hospital took the case to federal court to get the monetary award reduced.  They succeeded.  Dr. Poliner now is only entitled to $21 million in actual damages and $1.54 in punitive damages.  If he doesn't accept this he will have to go through a new trial. He will probably accept since he is getting alot of money and has shown the hospital and physicians to be (you can add whatever word you want here). 

Bakare v Pinnacle Health
MD Penn

The physician was removed from the hospital staff and sued.  The Court agreed with the hospital on all but one count.  All the usual complaints were tossed under HCQIA except one for defamation against one physician and via vicarious liability the whole health system.  The court found that there was a question of fact whether or not the physician discussed the case with nurses outside the peer review process.  This must be decided by a jury.  This case is important for physicians on peer review committees that they should keep quiet about what happens in committee.  It also is a wake-up to physician attorneys to find out if the peer review physicians slipped up.

Pourzia v St. Mary Med Ctr.
Ca Ct. App.

The physician had a suspension of his privileges by the hospital and sued.  The hospital argued that the rightful next procedural step in California is to ask for a writ of mandamus.  This was not done.  The trial court stated that since it was not done there could be no suit.  The Appeals Court differed.  The stated that the trial court should have treated the physician's complaint as a writ and then the Court remanded the case for trial.    

US ex rel. Conner v Salina Hosp.
D. Kan

Dr. Conner filed suit against the hospital stating they were cheating Medicare.  This was done as a qui tam.  The hospital took away his privileges and he sued again for retaliatory discharge, even though he was not employed by the hospital.  The court ruled against the physician in the qui tam matter since there was not enough evidence.  They allowed his retaliatory discharge claim if pled correctly.  

Kibler v Northern Inyo Hospital

Earlier this week I attended a teleconference of mostly hospital attorneys discussing the above recent California Supreme Court case.  In this case Dr. Kibler, a 60 year old FP who still delivered babies, got into a significant arguments with the OB nurses.  The nurses complained to the MEC about Dr. Kibler and when they did nothing the nurses went to the Board.  The Board ordered the MEC to conduct an investigation and Dr. Kibler was summarily suspended but an agreement was reached in under the statutory reporting time.  Therefore no 805 report was needed to be filed with the state.  Dr. Kibler remained on the staff during a probational period but sued at the end of the time.  One of the problems was the settlement stated that he would not sue the hospital.  The hospital filed a SLAPP defense and won in trial and the appeals court.  This winning defense states that the issue is of public concern and the burden then falls to the physician to prove he has a triable issue of fact for the court.  At the same time, a case with the same basic facts, O'Maera v Palomar Hospital, in a separate area of the same appellate court ruled that the physician should be allowed to sue the hospital and SLAPP did not apply.  The California Supreme Court broke the tie and sided with the Kibler Court.  What this means in plain language is that a physician will not only be foreclosed from suing unless he can show he has triable issues, but can not even get discovery.  Also there can be no suit until not only the judgment of the hospital is final but the writ of Mandamus is over. The Supreme Court decision did not limit the use of a SLAPP to a damage claim so it can be used in Mandamus as well.  One of the things of a successful SLAPP suit is that the losing side pays the winner's attorney fees. This is a terrible decision for the peer reviewed physician who has truly been mal peer reviewed. The hospital attorneys state that if a physician has truly been mal reviewed he will have triable issues and the case can go forward.  Trying to get the information to show the mal peer review will now be almost impossible.  One of the most interesting aspects is the Supreme Court believed that the hospital peer review process is an arm of the California Medical Board so is definitely a public concern, the first decision that needs to happen in a SLAPP suit, even though it is one physician and only a few patients. This decision will give more protection to the physicians who sit on peer review panels and who now are being sued with the hospital by a physician.  

Ward v Kaiser 
ND Cal.

 Dr. Ward requested a medical leave of absence from his hospital for alcohol treatment.  Upon his return he was monitored for 33 months and the given back his privileges.  His hospital then asked Dr. Ward to help with cross coverage with Kaiser and he agreed.  Kaiser refused to accept his application for staff due to his prior problems.  Dr. Ward sued in federal court under the ADA and Section 504 of the Rehabilitation Act.  He lost in summary judgment under the ADA since he failed to plead that he was disabled but he was allowed to go to trial for discrimination under the Rehabilitation Act.  

Untracht v Fikri

 Dr. Untracht was peer reviewed and removed from a hospital.  He filed suit alleging antitrust against three hospitals and multiple physicians, also HCQIA failure and state claims.  He lost on all three counts.  There was no evidence of a conspiracy by the three hospitals since he was being accredited at one hospital while he was being dismissed in another.  There was no problem with competition since he voluntarily removed himself from one hospital where he practiced.  HCQIA protects against monetary awards and does not infer that if a hospital does not follow the four standards that the doctor is entitled to any recovery of money.      

Chadra v Charlotte Hungerford
Conn. Ct. App.

 Originally Chadra won in summary judgment to allow his case against the hospital for false reporting to go to trial.  The hospital filed multiple appeals which went nowhere but then filed a new summary judgment motion.  This time they had the physicians involved give affidavits stating that they acted in good faith.  This shifted the burden to Dr. Chadra to prove malice, which he did not do and the summary judgment for the hospital was granted.     Top

Illegal Payments

US v GlaxoSmithKline

GSK has agreed to the largest IRS settlement in history of $3.4 Billion.  The company tried to shift money to the places that had the lowest income tax no matter where the money was made.  They got caught.  Since the company had already set aside funds to pay the dispute, there should be little impact on the bottom line. 

FDA v Red Cross

In the largest fine ever imposed by the FDA, the Red Cross was ordered to pay $4.2 million.  The reason was the Red Cross' violation of federal blood safety and quality control regs. The Red Cross is not bright since they have been fined in previous years a total of $5.7 million of your money.   

Illinois v TAP

 TAP pharmaceutical agreed to pay Illinois $1,5 million for fraudulently increasing the wholesale price of Lupron to the state.        Top


Louisiana v Pou
Louisiana Ct. Appeals

Dr. Pou has been investigated for murder of patients during Katrina.  The state wanted the information of a telephone conversation Dr. Pou had with a public relations person and a lawyer with Tenet.  The count stated these were protected conversations under the attorney client privilege.  The court stated that neither could be interviewed by the state.  The decision will be appealed to the Supreme Court again.  Originally the Supreme Court ruled that much of the conversation was privileged.  The question is when Dr. Pou was told by the attorney that the attorney represented Tenet and not Dr. Pou.  Anything said after that is not protected by any attorney client privilege since there was no relationship. 

Illinois v Vista Medical Ctr.

The death of a patient who had apparent symptoms of a myocardial infarction sat in the waiting room of the hospital ED for two hours and died there. The jury at a coroner's inquest ruled that the death was a result of gross deviations from the standard of care.  Even if the state attorney decides not to prosecute, this will be settled for several million dollars.  It will never go to civil trial.        Top


Thornburg v El Centro Med Ctr.
Cal. Ct. App.

In a case that shows how stupid hospitals and their attorneys can be Thornburg was charged $2 per page for medical records.  The state statute only allows a maximum of $0.10 per page.  The patient then turned it into a class action for violation of the state law.  The hospital stated that no private action was legal and the trial court bought it.  The Court of Appeal was not as dumb as the trial judge and reversed the decision.  This could all have been avoided and the huge amount the hospital will now have to pay could have gone for care if they weren't so stupid and greedy.

Diering v Regional West Med Ctr.
DC Neb

Dr. Diering, an ER physician, went through a voluntary drug/alcohol rehab.  Five years later the hospital's ED director disclosed to a prospective employer of Diering that he had gone through the program.  This cost Dr. Diering the position.  He sued the hospital for releasing the private information.  He sued in state court under the Nebraska confidentiality law and under HIPAA.  The hospital removed the case to federal court under diversity.  The Court stated that under HIPAA and under the Nebraska law there was no private right of action.  The Nebraska law also does not have a blanket confidentiality attached to it only as far as the State is concerned.        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.