April 15, 2013 Recent Legal News



Patient Rights


Peer Review and Employment



Mastej v Physician's Regional

A federal judge in Fort Myers, Florida, has dismissed a whistleblowers suit that stated Physician's Regional had illegally induced physicians to refer patients to the facilities.  The complaint lacked the specificity required.  Since it was the third amended complaint the case was dismissed with prejudice and can therefore not be refiled. Mastej was the CEO of one of the hospitals and therefore probably knew the truth even though it could not be proved in a court setting.

US v Gibson

Donald Gibson of Richmond, Texas, has pled guilty of conspiracy to commit Medicare fraud.  He ordered multiple unnecessary tests under his Medicare number.  He and his co-conspirator Joseph Edem also had patients steered to their clinics.  Sentencing is in July.


CVS has agreed to pay $11 million for not keeping close tabs on narcotic sales in Oklahoma.  CVS was accused of using fake DEA numbers, improperly labeling meds and filling prescriptions for physicians without valid controlled license numbers.  CVS admitted no liability in the settlement. 

US v Easton Hospital

Pennsylvania's St. Luke's Health and Easton Hospital have both settled charges that they improperly charged Medicare under the -25 code.  St. Luke's will pay $1,029,791 and Easton will pay $454,866.  This is not an uncommon error due to the vague CMS rules.

US v Intermountain

Intermountain will pay $25 million to the feds for illegally paying over 200 of its referring physicians.  The major problem was their negligent oversight of physician's leases.

US v Reaves

Dr. Lori Reaves, the founder of Visiting Physicians of South New Jersey, pled guilty of overcharging for home visits.  She admitted to billing over $500,000 she did not earn.  

US v Renown Health

Renown purchased a cardiology practice and their attorneys screwed up leading to the hospital paying the physicians a lot of money per physician.  This led to the antitrust case and the physicians were given permission by the feds to leave the employ.  Ten cardiologists took them up on the offer.  All this caused the CEO, General Counsel, Vice President and the Business Development Administrator to be fired.

US v Select Specialty Hospital

The feds have accused the Evansville, Indiana, hospital and it's parent company of healthcare fraud.  The say the LTC kept patients in longer than necessary to obtain more money.  This whistleblower case also alleges that the LTC released some people prior to the completion of their therapy.  

US v Drivas

Dr. Gustave Drivas of Staten Island has been found guilty of health care fraud.  He was the president of a company that paid people to have care and allowed his number to be used.  He faces 20 years in prison.

US v Michel

Dr. Helene Michel has been convicted and sentenced to 12 years in prison for healthcare fraud.  She wandered the halls of nursing homes to garner information on patients for her medical equipment company.  She then submitted bills for equipment either not needed or not given to patients.

US v Katz

Dr. Jose Katz of New Jersey and New York has admitted billing for $19 million in fraudulent cardiac procedures.  He stated he falsely diagnosed his Medicare and Medicaid patients with potential cardiac disease in order to do procedures.  He is to sentenced in July.

US (Hobbs) v MedQuest
6th Circ

 The relator sued the company for using physicians not enrolled in Medicare to supervise Medicare lab work.  She also stated MedQuest did not register one of the companies facilities in Medicare.  The trial court ruled for Hobbs and the Circuit court overturned.  The rules only state a physician not a Medicare enrolled physician needs to be on site.  The other problems were minor technical violations.

US (Keltner) v Lakeshore Med Clinic
ED Wisc

The relator accused the clinic of upcoding and submitted Medicare billings with stamped signatures.  The court ruled that the latter was permissible.  The court allowed the former since it had ignored audits that showed the problem.  The court also allowed the retaliation claim to go forward since she was warned to stop digging up dirt and then fired.

US (Osheroff) v Tenet
SD Fla

The relator claimed that Tenet had leased office space to physicians for below market money to get referrals.  The reports that Tenet sent to the government were rife with office space area understated.  The case can go forward.

Kaiser Health Plan v Pfizer
1st Circuit

Kaiser sued Pfizer for mismarketing Neuronton.  They claimed and won that Pfizer marketed the drug for bi-polar disorders and migraines.  At trial they won $142 million and the Circuit Court affirmed.  Pfizer promoted the drug for off-label uses which is not permitted.  At the same time the court reversed a summary judgment against Aetna who sued Pfizer with Kaiser.  The court also reversed summary judgment against Harden who was bringing a putative class action for third party payors against Pfizer.  This means that several more cases will go against Pfizer.        Top


Oklahoma v Harrington 
To Be Filed

The Oklahoma Board of Dentistry is talking to the state Attorney General about filing criminal charges against Dr. W. Scott Harrington, the oral surgeon who is working with the Board to get about 7000 people potentially infected with HIV and Hepatitis B and C criminally indicted.  The investigators allege that they found rusty instruments and a faulty sterilizer in his offices.  He could be charged with practicing dentistry without a license and aiding another.  He had a license which he voluntarily gave up last month.  

Brazil v Soares de Souza
Indicted for Murder

Dr. Virginia Soares de Souza has been charged with killing patients in an ICU to free up space for more patients.  It is alleged that she and her staff gave muscle relaxing agents to the patients and then decreased their oxygen supply in Curitiba, Brazil.  Three other physicians, three nurses and a physiotherapist have also been arrested.  The state believes but can not yet prove that she killed up to 300 patients. 

Patient Rights

Lee v Makhnevich

The court refused to dismiss a suit against a dentist for breach of contract for threatened legal action when a person complained about the dentist on a web site.  The patient went to Dr. Stacey Makhnevich for severe tooth pain.  Lee signed a confidentiality agreement before obtaining treatment.  This precludes patients from posting comments.  Lee was charged and paid the bill but the dentist did not forward information to the patient's insurer.  Lee posted his experience on a site and was threatened with a suit.  Lee sued to declare the agreement void for lack of consideration and was unconscionable.  He also said there was no defamation since his comments were the truth.  Since part of this was a copyright infringement the federal court had jurisdiction. Since the dentist had originally threatened action for $100,000 the monetary federal limit had been reached.  Dumb Dentist.         Top


Brunson v UnitedHealth
Las Vegas Trial Court

The jury said the insurer was guilty of being negligent in their oversight of Dr. Desai who owned an outpatient facility in Las Vegas.  The facility used unsanitary techniques and caused patients to get hepatitis.  One person won $15 million against the insurer and another $9 million.  The attorney will ask for $1 Billion in punitive damages.  They got $500 million. Juries in the area had previously handed down verdicts against Teva the makers of Propofol for selling the drug in oversize containers which could be reused.  Teva had agreed to pay $250 million to settle 80 law suits.  The suit against United is under a Nevada law that requires HMOs to file annual reports showing they oversee the quality of member services.  The insurer states that the judge prevented their putting on a full case.  At the appropriate time they will ask for the case to be overturned or appealed.        Top

Peer Review and Employment

Nurses v Albany Hospitals

Five hospitals in Albany, New York, have agreed to pay nurses in a seven year old class action law suit that the hospitals conspired to hold down wages.

Inland Pulmonary Medical Grp. v Chino Valley Medical Center

The problem is the hospital hired ED physicians are not telling the pulmonary physicians when their patients are being admitted to the hospital.  The physicians believe this is not only illegal but is being done to get more money.  The hospital which is owned by Prime Health says they have only a legal obligation to notify the HMO of the patient's admission and have no legal obligation to notify the physician.  That may be technically true but is certainly unethical.

Patterson v St. Dominic-Jackson Hosp
SD Miss

Patterson, a female RN applied for one of four openings for a RN Lead Team in the ED.  She was turned down and all four positions were filled by males.  The person hiring for positions was a female.  Patterson filed a complaint and then her supervisor listed over 100 charts that Patterson had accessed illegally.  Patterson was then terminated and sued.  The court allowed the suit not due to the males being hired but since there was a issue of fact whether other nurses who had violated the privacy policy had not been disciplined.

Hagen v Souixland OB
ND Iowa

In a fascinating decision the court held in summary judgment for the suing physician but warned him not to take the case to a court since he would come across so poorly.  The physician had a long history of abusive behavior.  The other three partners couldn't take it anymore and in a secret meeting got rid of him.  He sued for wrongful termination, negligence and vicarious liability.  The group asked for summary judgment on the first and last claim.  The judge said he wins his summary judgment but cautioned the physician from taking his claims to trial because he would come across as an "arrogant jerk".

US ex rel. Simms v Austin Radiology Grp
WD Texas

In a false claims case the former employee wanted access to the Compliance Officer's information in deposition.  The court ruled their is no compliance officer privilege and the group had to give up the information.

Nordella v Blue Cross
LA Trial Court

Dr. Jeffery Nordella had applied to the PPO network of Blue Cross and was denied.  He is a family practitioner and the head of quality review at Porter Ranch, a walk in clinic.  He had many run-ins with the insurer in the past by arguing that care was needed when the insurer said it wasn't.  The insurer said they had enough FPs in their network in the area but could name only 7.  The jury found not only did the insurer deny the physician due process as is required by state law but they did it with malice.  His compensatory damages win was $3.8 million and the jury is now considering punis.  The insurer is considering appeal but will settle quietly. An article in the LA Times the next day said that settlement was complete with undisclosed terms.

Tri-City Healthcare Dist v Young
Ca Ct App

Dr. Young was a disruptive physician who was terminated from the hospital.  Since the hospital held open board meetings he would go and threaten various people of the administration.  His mandamus motion to overturn the termination is still pending.  The hospital asked for and received from the lower court a protective order and the court of appeal agreed.  He can only attend the board meetings via phone.  This is a physician who does not like to help himself.        Top


Patients v VA
To Be Filed

The VA in South Carolina lost a laptop with the information of 7400 vets on it.  The VA was lax in it's security by not having all physically protected.

Opis Management v Florida
11th Circuit

The 11th Circuit ruled that HIPAA extends post mortem which is contrary to Florida law.  This makes it difficult for estates to get medical records.  In Florida to be a personal representative an individual must be the fiduciary appointed by a court to administer the estate.       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.