April 1, 2006 Recent Legal News

Product Liability




Peer Review





Product Liability


There is a problem with 75% of the laproscopes in use today.  They have the potential for an electric short to to through the body of the scope and injure the bowel or an artery inadvertently.  About 25% of the hospitals have the safer laproscopes with active electrode monitoring which would prevent the complication.  The cost is less than $1000. There is no excuse for not having this on all laproscopic devices.  The flip side is that the manufacturer states that if the scope is replaced often the problem will not happen.  Kaiser states they haven't seen the problem very often, which means they have seen it and won't spend the money.  The VA state it has seen it in four cases but will not as a unit purchase the safety device.  Some hospitals in the system are purchasing the device from Encision, a company in Colorado. 

Lead Poisoning

Reebok has recalled a metallic charm given with the purchase of a pair of shoes.  It turns out the charm contains lead and was the cause of death of a 4 year old boy who swallowed it.  Lead was also in paint medications, ceramic dinnerware and metallic toys and trinkets. 

Perreault v Mary Washington Hosp., CAP
Filed Virginia

The plaintiff sued the hospital and the maker of a cardioplegic following the death post cardiac by pass.  The death was due to sepsis and the cause of the sepsis is apparently the cardioplegic drug made by Central Admixture Pharmacy Services.  The hospital alleges that the sealed bags of the drug contained bacterial contamination under testing by the FDA.  The general rule of law is that if something is dangerous and put into the "stream of commerce" all in that stream are liable.  State law can state differently.  

Although not really a product liability suit, the Massachusetts Supreme Court ruled that the state health rules regarding the non smoking do apply to private clubs.  The court rationalized that the clubs which are strictly private are not private but quasi public since they are incorporated in and receive the benefits from Massachusetts law and licenses.  This means there is no such thing as any private area in the state.  The same faulty reasoning could also be said about the home.        Top


Laghai v Kaiser Health Plan, et al.

Laghai presented with palpitations to her physician.  She had atrial fibrillation and was referred to the ED.  The ED physician called a Cardiologist who recommended Flecainide to cardiovert the patient.  It worked and the patient was discharged to return the next day with a massive stroke. They went to arbitration over whether the standard of care was to put the patient on anticoagulation prior to the cardioversion.  The arbitrator ruled that the physicians had a duty to anticoagulate prior to the cardioversion.  Kaiser lost $1,538,164 on this case and that has been paid in full.  There is no mention in the report if the physicians were named as they should be and if they were reported to the Data Bank. 

California v Univ. Calif. Irvine

California has found UCI culpable in the death of a psychiatric patient.  The Department of health states that UCI treated a psychiatric inpatient with an unapproved drug and failed to monitor the patient to prevent the potential suicide.  The hospital had not installed breakaway light fixtures and the patient hung himself using bed sheets.  The patient had been treated for his depression with Zoloft and Strattera an anti-ADD drug.  The patient did not have ADD and both drugs warn of potential suicide.   This is yet another of the problems for this less than prestigious hospital. 

Covarrubias v Kady
Ca. Ct. App.

California has a law that grants immunity from law suits under the Good Samaritan Act if the physician in a hospital responds to an emergency call and is not the patient's physician or have a preexisting duty to the patient.  In this case the pediatrician was notified that a baby was going to delivered by C-Section and the pediatrician could not be notified.  Dr. Kady had no preexisting relationship with the patient but stayed in the hospital for 2-3 hours waiting for the section to occur.  For his good deed he was sued and was put through the psychological torture of responding to the suit.  He of course won under the Good Samaritan law that the plaintiff's attorney should have known about. It does my heart good when a dumb attorney loses money.

Carr v Brezel
      NJ Ct. App.       

This case goes to the old saw that the physician and not the hospital is responsible for the informed consent.  The patient sued the hospital after being injured in surgery claiming the physician did not have privileges to do the procedure.  The patient claimed the hospital had a duty to tell the patient under the informed consent duty about this.  The court disagreed with the patient as all informed consent issues have to do with the physician and not the hospital.    

Smith v ManorCare
Ohio Ct. App.

 Sometimes I wonder where these attorneys heads are.  In this case a patient's family sued a nursing home after the patient died when the patient's head became trapped between the bars of the bed.  There were some legal maneuvering in the lower court that ended when th plaintiff filed a motion to compel testimony and the defense attorney did nothing.  The lower court then granted the motion and the defense then woke up and appealed but to no avail. 

Child v Children's Hospital of Orange County
To Be Filed

The unidentified child had a right sided brain tumor that was not found by the surgeons.  The reason the surgeons didn't find it is because they operated on the left side of the patient's head. The doctors and hospital violated multiple procedures by their error and have no recourse but to pay the family.  

Dilley v Sutter Health
Jury verdict

Dilley was admitted to a Sutter medical center for a urinary tract infection and a fall in her home where she spent a night on the floor prior to being found.  While in the hospital she got a grapefruit sized decubitus ulcer on her back which would not heal.  The suit also claimed that while in the hospital and in the transitional care setting that followed, she only had one shower and one shampoo.  The jury found Sutter guilty of medical negligence and elder abuse.  There are no limits on non economic damages with elder abuse and the jury found Sutter liable for $1.4 million.  The punitive damage portion of the case is still in trial.       

Wells v Baylor University

Two patients, Wells and Hightower, have died after receiving organs from a patient that died of rabies.  They are suing for lack of informed consent, a reasonable issue.  The CDC has confirmed the presence of rabies in the donated organs.  However, there is no test for rabies that can be done in the window of time necessary.  On the flip side if rabies was tested for and found the transplant recipient could be treated with the anti rabies shots to prevent the disease. In this case the donor was a criminal who was released two weeks prior and was brain dead on admission after the use of meth cocaine. He also had a fever of 106 degrees just prior to death and had bacteria in his sputum and blood.  This is a high risk donor and the recipients should have been told about the donor.  The standard consent would not have been enough.          Top


Members v Blue Cross

 Ten former Blue Cross members have sued the insurer for systematically dropping them from coverage after the company found out they would be expensive.  This was done on "retroactive review".  The suit alleges that this is part of the corporate system of the organization. What happens is that the individual fills out a questionnaire regarding their health, is accepted and begins to pay the premiums.  They later are diagnosed wit a condition they did not know about and are then dropped from the program for alleged fraud.  This only happens if the patient puts in a claim.  Those without claims never have their applications scrutinized.

California has decided the case may have some merit and has initiated an investigation into Blue Cross' practices by the Department of Insurance.  The Director believes this might be like the pattern of unfair denials by UNUMProvident last year in the disability arena.  That cost the insurer $5 million in fines and a change in their modus operandi.  Blue Cross welcomes the audit but we will see if that changes.     

US v Friedman

Bruce Friedman, DPM has admitted in court that he defrauded the government of over $1 million.  The podiatrist admitted he had billed for work done by an unlicensed employee and by billing for procedures never performed.  He will be sentenced to prison on a deal and will be fined $1.5 million to be paid 30 days prior to sentencing. 

Burns v Boyden
Utah Supreme Court

Chiropractor Burns was subpoenaed for his records in a Worker Compensation fraud case.  He moved to quash the subpoena and this was upheld by the trial court.  The rationale was the patient physician privilege.  The Supreme Court stated the lower court was wrong.  The statute does give a privilege to the records in any stage of the fraud investigation and there was no exception for insurance fraud.  However, the court then went on to state that the physician had to claim the privilege but only for the protection of the patient.  Here, he was claiming it for himself and therefore the presumption of the privilege did not lie. 

US v Patel

 In a rerun of the Redding California case of several years ago, Dr. Mehmood Patel has been indicted on fraud for performing unnecessary cardiac procedures and charging for them.  He is also been charged with malpractice by about 300 patients.  He still has a license but has been removed from the staffs of the Lafayette, Louisiana, Our Lady of Lourdes and Lafayette General Hospitals.          

OIG and Consultations

The OIG has found that over $1 Billion has been erroneously paid to physicians for consultations.  About 20$ of the erroneous payments were for visits billed as consultations which were not.  The remainder were in the use of upcoding by the physicians.  They will start to look at this much more closely.      Top


Bagent v Blessing Care
Ill. App. Ct.

The court allowed that a hospital may be liable for an off duty employee who tells confidential patient information.  The employee told someone in a bar about a patient in the hospital.  The patient sued the hospital as well as the employee.  Since the hospital imposed a duty of confidentiality upon its employees at all times it was potentially liable.  The law of unintended consequences is alive and well.   

Psysiotherapy Assc. v White
ND Ind.

Employees of the company left to start a competing business.  They contacted their clients from the original business and solicited them.  The original business went to federal court to obtain a restraining order against the solicitation since it was against the Indiana Trade Secrets Act.  The court ruled that solicitation did not violate the Act but a use of patient lists would. The court then stated it would enjoin them from improper solicitation but not from competing.

Yonker v Ctr. for LTC of Gardner
D Kan

 A former employee sued the company for retaliatory discharge after she did whistleblowing.  The employee was the Director of Nursing who found that the hospital kept patients beyond the time when they were ready for discharge.  She reported the events to a state employee.  She was terminated soon after die to a breach of confidential medical information.  The court stated that enough facts had been alleged to allow the case to trial.

Merchant v Hueser, et al.
Class Action Filed

In a class action that should be thrown out an attorney alleges that many people have been given diluted drugs.  This stems from the admission of one oncologist in Missouri that he did give diluted drugs.  The attorney states that 22 physicians gave diluted drugs to patients.  This is described as attorney trolling for defendants.  

US v Lentini
Guilty Plea

Dr. Jerome Lentini of  Oregon and his nurse pled guilty of giving patients an unapproved form of Botox and then billing for the real thing.  The plea deal includes restitution to patients of up to $350,000 and fines of up to $250,000 for the physician and $ 100,000 for the nurse.  They also will be banned from Medicare for ten years as is routine for all fraud.

Moss v Washoe Medical
Nev. Dist. Ct.

Moss, a nurse at Washoe Medical Center, was terminated for complaining about sexual harassment.  She sued for a hostile work environment and for retaliation.  The hospital took action the day after the sexual harassment so there could be no claim for a hostile work environment.  For the retaliation claim, the court agreed with Moss.  She claimed she was the subject of verbal abuse, disciplinary action, excessive scrutiny suspension and termination due to her complaint.  This is enough to overcome the summary judgment for the hospital.  There was a genuine issue of material fact as to the adverse employment actions and the constructive discharge.  This is not the first time this hospital has been in the news.  They also lost a major case in attempting to toss off a psychiatrist who complained to the hospital and state authorities regarding issues at the hospital.  Sounds like they need to get their act together and consider a different administrator and/or attorney.  

Emergency Physicians v Leventhal
LA Ct. App. 

 The Louisiana Court of appeals agreed that the hospital was in breach of contract but elected to award no damages.  The reason when the hospital did it's bad thing they parties were no longer in contract.         Top

Peer Review

Poliner v Texas Health
ND Texas

Poliner is the physician that won $366 million from the Health System for their terrible peer review or lack thereof.  The hospital doesn't want to pay all that money so Dr. Poliner went to court to force payment.  The court would not disturb the verdict citing the hospital's stupidity of he way they treated the good doctor and refused to admit any wrongdoing.  Pay!!

Fla. Hosp. Waterman v Buster
Fla. Dist Ct.

In a test of the Florida statute regarding divulging information of peer review actions, the court as well as others in the past have found that the statute overrules peer review statutes.  However all peer review done prior to the enactment of the statute was not to be revealed.  

Gordon v Lewistown Hosp
Petition to the US Supreme Ct.

 In the underlying case Dr. Gordon was removed from the staff for opening a competing ASC.  He sued and lost in District Court.  The Court stated that a nascent ASC could not be considered a competitor of a hospital and the hospital was entitled to immunity from damages under HCQIA. The 3rd Circ (which included Alito) agreed with the lower court.  The case has been filed with the high court along with the backing of the American Association of Ambulatory Surgery Centers and the Outpatient Ophthalmic Surgery Society.  It will be interesting to see if the Court accepts the case which it could use to overturn HCQIA, a bad law. 

Couch v Memorial Hosp.
Wyo. Filed

Dr. Couch has sued Memorial Hospital of Carbon County Wyoming, for retaliation.  Dr. Couch was put on probation after he found a physician that he thought was on drugs and advocated for drug testing for the physician. He had a "disruptive physician" label attached after the physician bought charges against Dr. Couch.   He was put on probation after taking a requested psychiatric exam by the hospital and being cleared.  He was then told to undo psych therapy by the credentials committee and he refused.  There was no hearing. He was actually whistleblowing in a public hospital, a protected right.  It sounds like HCQIA may not apply here and the physician may win if he can get by the expected summary judgment motion. 

Eusterman v Kaiser
Ore. Appeals Ct.

Dr. Eusterman was a physician at Kaiser via a contract with Northwest Permanente PC.  He examined employees of various companies who had contracts with Kaiser.  Kaiser wanted the physician to give a small amount of days off to employees since that would make the companies happy.  They didn't care about the employees only the money the companies would bring to Kaiser.  Kaiser sent frequent notes to Eusterman regarding his keeping the employees on time off more than the companies wanted.  He was eventually terminated at the insistence of the case managers.  He sued Kaiser for wrongful termination and lost since he was not employed and therefore was no public duty and he was never an employee of Kaiser, only Permanente.   

Salamon v Our Lady of Victory Hosp.

Another attorney story.  The physician was peer reviewed out of the hospital and the physician sued under sexual harassment.  The case was dismissed since this can only be with an employee and the physician was an independent contractor.  Since these cases are usually paid by the hour, I wonder how much the attorney made on the case when he should have known the law.        Top


North Coast Women v Benitez
CA Ct App.

Benitez had sued the Southern California Fertility Clinic for not performing fertility treatments due to her being single and the physicians religious beliefs.  The lower court stated the physicians could not use their beliefs as a defense.  The Court of Appeal overruled the trial court and stated the physicians may use their religion as a defense.  Benitez then re-appealed to the Court of Appeal to rehear the matter.  They did rehear and came to the same conclusion as they had prior.  The issue is that California has a law that prohibits discrimination due to marital status.  The problem is that the law was enacted after the issue occurred.  The court stated that the law does not apply retroactively.        Top


California v San Diego County

The California Attorney General has filed a law suit to dismiss the two law suits by San Diego and San Bernardino Counties that the medical marijuana was preempted by the federal rules.  The Attorney General states that the proper venue for this is an Attorney General opinion, which may not be given while there is a suit.  The suit went to state court from federal court in the hope they could avoid the medical marijuana friendly 9th Circuit Court.  The counties are now in a bind.  

Raich v Gonzales
9th Circ

 Angel Raich, the same person who was the lead plaintiff in the Supreme Court's last turn down of the state right's to have their own medical marijuana law, is back again.  This time it is a right to life case.  She contends that medical marijuana is the only thing keeping her and others with terminal illnesses alive and with less pain.  I hope she wins one of these but I doubt it.     Top


Fieser v Kansas Med. Brd.
Kansas Supreme Ct.

Fieser had her license revoked by the Kansas medical board for professional incompetency.  The case centered around the meaning of the phrase.  She contended and the lower court agreed that professional incompetency meant that there were all the elements of negligence, duty, breach, causation and injury.  Since no injury was shown the judgment could not stand.  The Kansas Supreme Court overruled the lower court and stated that the meaning was the same as ordinary negligence.  This does not require proof of injury.  It only requires repeated instances of the beach of the standard of care.        Top


E. Portland Imaging v Providence
D. Or.

The Oregon federal District Court stated that there was antitrust even though the hospital system did anticompetitive things the imaging group failed in their contention that the hospital had monopoly power.  All the hospital did was open two competing outpatient facilities and then terminating the imaging center's contracts with health plans.  Just your everyday screwing by Providence.    

US v Suburban Health Organization

Suburban, a PHO, wanted to bill for the physician services at the employer hospital as the sole negotiator.  This would effectively get rid of price competition for the physicians services.  There was almost no integration between the entities.  The OIG said nope.   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.