August 1, 2002 Legal News



Fraud and Abuse




Peer Review

Medical Records


Research and Consent

Why You Shouldn't Join a Health Plan

Managed Care


Webb v Bd. Medical Examiners
Ariz. Ct. Appeals

The Arizona Court of Appeals has told the Medical Board that they must give the accused physician an informed choice between an informal interview and a full press formal hearing.  The lack of the disclosure violated the physician's due process right.  The interview process never allowed the physician the right of cross examination nor to be heard.  If the Board is to discipline for negligence they have to fulfill the same role as a court by describing the negligence and showing how the physician deviated from the standard of care.  This requires more than merely the experiences of the board members.    

CA. Bd. v Opsahl

The Medical Board of California has accused the physician of writing 8000 prescriptions for patients he never saw.  The physician was a web doctor and received $60 per prescription.  A new rule prohibits the prescribing of potentially dangerous drugs without a "good faith examination".  The Board believes this means a face to face meeting.  The physician actually spoke to each patient over the phone much like covering physicians do every day.  He believes that he received enough information to prescribe the medications.  I hope that when Opsahl goes before the ALJ it is not the same one that temporarily suspended his license.  That ALJ stated that "the belief that talking over the phone with patients satisfied the requirement of a good faith exam is profoundly disturbing and demonstrates a combination of incredible arrogance and a poor judgment".  What the ALJ doesn't realize is as mentioned above.  It is done every day by every doctor in the US.        Top 


Stoops v Abbassi
CA CT. Appeals

I'm putting this case first since it is for all the physicians who have alternative malpractice insurance with a interindemnity trust fund.  The plaintiff attempted to sue the other physicians in the trust for the gross under capitalization of the trust which had been put into receivership and his personal losses in a malpractice case because of the inability of the fund to pay for the defense or the liability.  The court ruled for the other members and against the plaintiff.  The plan was essentially bankrupt and Stoops had to pledge assets to the underlying malpractice case of over $1 million.  Not only did he lose the malpractice action and the trial court action but was also assessed the costs for the appeal.  The moral is to be careful who you use for a malpractice carrier.

Howard v Heary, MD
New Jersey Supreme Ct.

The Supreme Court of New Jersey ruled that a patient can not sue a physician for fraud for embellishing his medical credentials. The patient tried to sue for fraudulent misrepresentation when he could have sued for lack of informed consent, malpractice and battery.  The case stemmed from a "he said, she said" set of facts.  The patient stated that the physician stated he was board certified and had done the operation hundreds of times.  The physician in fact denied he ever said that since he had only done about a dozen and did not become board certified until two years after the surgery.  The attorney for the plaintiff was attempting a novel theory of law in order to prove a weak and difficult case.      

Mejia v Comm. Hosp of San Bernardino 
Ca. Ct. App.

Mejia sued the ED physician, the radiologist and the hospital for medical malpractice for missing a broken neck which left total paralysis.  All settled except the hospital which tried to get out since the radiologist was an independent contractor.  The court stated that in virtually all cases the hospital will have ostensible liability for it's physicians.  The hospital has to prove that they have affirmatively done something to show the physician is not an ostensible agent of the hospital, a virtually impossible task.  The case against the hospital now can go to trial.    

Olson v Clark & Daughtrey  
Fla. Superior Ct.

In another Florida wrong site procedure Olson states she received an unneeded cardiac pacemaker due to a patient record mix up.  Florida leads the nation in this category.  They were also the impetus behind the Stark legislation.  The rest of the country thanks the Florida physicians. Tongue in cheek.   

As a follow-up the Clinic has settled the 2000 case for an undisclosed amount of money.  The Clinic had the gall to state that the 86 year old woman was negligent.  The person who spilled the beans to the plaintiff attorney regarding the mislabeled Holter monitor test no longer works at the clinic.  Do I see a wrongful termination suit in the near future?

Novak v Lucie, MD
    Fla. Superior Ct.

Again in Florida, the Jacksonville footballer Jeff Novak sued the team physician for medical malpractice.  Following surgery he got an infection which shortened his football career.  He won $5.3 million. 

Von Der Ahe v McComb, MD
Los Angeles Superior Ct.    

 A five year old was diagnosed with a optic pathway brain tumor and seen by Dr. McComb the next day.  The preliminary diagnosis was a craniopharyngioma, a benign tumor.  The parents were told their daughter should be able to return to school in several months.  Two days later the operation was performed.  Several hours into the operation the parents were informed the tumor was an astrocytoma.  After surgery Dr. McComb told the family that he had gotten almost all the tumor out except for some under the optic nerve.  Postoperatively she had a blown left pupil and a MRI showed a bilateral thalamic infarct.  The child is now blind, incontinent and can communicate by placing a hand on a shoulder.  The parents sued and won $5,822,479 from the doctor and the Children's medical Group for lack of informed consent.  The parents were told that the tumor would be easy to get out and that there would always be a possibility of anesthesia complications.  They were not told about potential surgical complications or alternative therapies.  The doctor argued that he does not have to provide options that he does not believe in.  The trial was 14 days and the verdict was 12-0 on negligence and 9-3 on causation, since this is a potential complication of surgery.  The deliberation took three days.  This case is an excellent example of how the paternal approach to patient informed consent is not allowable.  The patient must be told of the pros, cons, alternatives and usual complications of the procedure so that a reasonable prudent person could make an informed decision.  It is immaterial what the physician believes is appropriate or what the physicians in the community would have explained.  

Doe v Kaiser 

The Kaiser physicians (Permanente Medical Group) lose alot of cases like this one because of a mindset to not order tests.  This is not told to the physicians but it is part of the culture. I worked for them as a contract physician and can speak first hand about it.  This lack of chest s-ray cost them $1,782,570.  That would pay for alot of x-rays.  A female aged 24 began having left posterior rib pain for no good reason.  This continued for six months and she continued to complain of the pain to her physicians including the ED. The patient was just put on pain meds until an internist finally did an x-ray.  The patient had a mass which turned out to be a Ewing's Sarcoma.  The patient is not curable at this time.  Most of the award was future earnings.  Kaiser had the audacity to say it wasn't their fault since the patient had her recurrent disease due to a non type 1 EWS/FU transmutation gene, which is usually lethal.  

Doe v Doe

A 40 year old insulin dependent diabetic with kidney failure required a transplant.  The plaintiff went to the defendant hospital where a cadaver transplant was performed.  Postoperatively the patient complained of severe back pain and an increasing insulin need.  Time passed before the diagnosis of vascular insufficiency to the pancreas caused the pancreas to be removed.  The patient eventually became hospitalized for 15 months and required amputation of parts of his feet and hands along with hearing and vision loss.  He is now wheelchair bound.  The settlement was for $3,235,000.  I don't understand why physicians don't believe patients especially when they see physical changes.  

Holliday v Kadz, MD
Orange Co. Superior Ct.

A 31 year old female had a breast augmentation.  Post-op her implants began to bottom out.  This required further surgery to correct.  The patient sued the original physician.  The trial lasted six days and in a 12-0 vote in 45 minutes, the physician was found not liable.  The plaintiff had two plastic surgeons that needed to be paid for their time by the plaintiff and the plaintiff also had to pay for the stenographer on the defendant plastic surgeon deposition.  The plaintiff had to pay some court costs and of course the time it took to prepare for trial.  The plaintiff's attorney lost in money and time probably close to $50,000.  The attorney needs to reevaluate the type of cases he takes.        Top

Fraud and Abuse

DeWall v US
DC Nebraska

The government lost a case.  The HHS was continually not allowing the DME to bill for a product under the correct code.  This was taken to court and the HHS lost.  They continued to do the same denial and DeWall sued early in the process for an injunction.  The judge called the HHS' denial of payment "bureaucratic legerdemain."  He also described the HHS as recalcitrant and incompetent at the least and engaging "in outright trickery at the most."  Not the words one wants publicized by a federal judge.


The feds have finished their investigation of HCA.  Most of the suits had been previously resolved in the mammoth $840 million settlement.  There remains eight civil suits against HCA and several criminal suits against HCA individuals.    

Amer. Lithotripsy v Thompson

The federal court stated that lithotripsy is not an enumerated designated item under Stark II and is not a hospital inpatient or outpatient procedure.  Since it does not fall under the latter category all other claims by the government fell out. Bottom line, lithotripsy is not a Stark covered procedure and physicians may refer to their own units.   

US v Hackensack Univ. Med Ctr.

The medical center agreed to pay $4.2 million to settle claims against them.  They were accused of upcoding pneumonia codes.  They also had to sign a Corporate Compliance Agreement. 

MA v MGH Anesthesia Assoc.

The government and the Massachusetts General Hospital Anesthesia Associates have agree to a settlement of the physician overcharges for Medicaid patients.  The problem was billing per minute and not per fifteen minutes as required by law and tacking on additional charges which were supposed to be bundled.  The anesthesiologists agreed to a $1.5 million settlement of which $300,000 is a penalty.      

US v Blue Cross of California

Blue Cross of California, the not for profit parent of Wellpoint, has settled with the federal government for fraud in how they managed the audits of health care providers who were attempting to get reimbursed by Medicare.  Blue Cross admitted no fault and will continue to work with the feds after they pay their $9.25 million fine. 

US v Walker, MD

Leonard Walker, MD of Fort Pierce Florida has been indicted for fraud.  The pathologist billed Medicaid for work performed long after any benefit to the patient would have accrued.  He faces 10 years and a fine of $250,000.         Top


US v Winn, MD

Dr. H. Richard Winn, the past chair for twenty years of the Department of Neurosurgery at the University of Washington in Seattle has pled guilty to obstruction of justice.  This criminal conviction was a plea bargain to allow Winn to keep his license. Winn is to leave the University. He will be sentenced to a five year probation and made to provide 5000 hours of service to indigents plus repay $500,000 to the government.  In order to continue to treat Medicare patients, he will need to sign an integrity agreement and write an article warning physicians to comply with federal regulations.  Two other chairs at the University had previously resigned due to fraud and abuse charges.  They are Drs. Arthur Fontaine of interventional radiology and William Couser of nephrology.  They have both maintained they have done nothing wrong.  The University interventional department has gone from five to one physician.  This stems from a whistleblower who worked in billing and compliance who is awaiting his money.  The University to date has spent over $10 million in legal fees alone.     

US v Joseph Fanfan

 Dr. Fanfan, a Haitian-American physician who was revered in the south Florida Haitian community has been convicted of income tax evasion.  He never filed a return for the years 1994-97.  He owes $179,168 plus all penalties and interest.  He could have been sentenced to 4 1/2 years in jail but instead is wearing an electronic anklet and must live at a half-way house but can continue his medical practice.  He also owes $90,000 for 1993 but the statute had run out.  

Indiana v Bek, MD
Indiana Superior Ct. 

Dr. Jong Bek was arrested in Gary, Indiana, for drug trafficking and for the felony murder of two patients who overdosed on unnecessary drugs. The deaths occurred two years ago and the state police have been investigating with undercover police since.  Two pharmacies are also being investigated for supplying the drugs to the overdosed patients.         Top


Davis, MD v Pullman Memorial Hospital
WA Ct. App.

Dr. Davis was fired from the hospital radiology department.  The hospital and the head of the department state it was due to disruptive behavior and a violation of patient privacy policies.  Dr. Davis says it's because she's a lesbian.  The ACLU was a co-counsel in this case.  Dr. Davis won in the Court of Appeal which allowed the case to go to trial by reversing a lower court summary judgment.        Top


People v Mawer
CA Supreme Ct.

In an unanimous decision the California Supreme Court rebuffed the US Supreme Court and the federal government stating that in California the medical necessity defense may be used for complete immunity for those individuals with physicians recommendations for the use of marijuana.  This only holds for arrests by state officials not the federales.  The defense only has to prove the existence of a recommendation by the beyond a reasonable doubt standard.  This means if there is any doubt the jury must find innocence.          Top

Peer Review

Patel v Midland Mem. Hosp.
5th Circ.

A cardiologist believed he should have been given a hearing prior to summary suspension.  He was suspended and then given the hearing and reinstated.  The hospital and medical staff won since all they had to prove was a reasonable belief that he was a danger.  The 5th Circuit remanded the case to determine if the physician should pay the hospital's attorney's fees and costs under either HCQIA or state law.  I think the moral here is to read the bylaws and consider yourself lucky if you are reinstated, since most aren't.  Those who sue to make a point are an attorney's dream and better have alot of money to pay fees.        Top

Medical Records

Slobin v Henry Ford Healthcare
Mich. Ct. App.

This is one of the dumbest cases I have ever had the misfortune to read.  The attorney for Slobin needs to get a life.  Slobin, via his attorney, requested medical records from Ford.  Ford has a contract with Smart to provide the records and bill for same. Ford gave Smart the records.  Smart copied the records and mailed them to Slobin.  The bill was for $44.26 which included a $7 retrieval fee, $5.50 shipping fee, a copying fee of $15 for the first five pages and $0.85 per page thereafter and sales tax. The $0.85 per page was about double of any other of 17 hospitals in the Detroit area.  In the trial court the hospital won summary judgment.  The plaintiff attorney then appealed, yep that's true. The Court of Appeal through out the common law claim of the plaintiff but let stand a factual decision of whether the Michigan Consumer Protection Act held and remanded the case back to the trial court.  This is alot of nothing over a $15 fee.  I wonder how the Justices kept a straight face? See my comment on the preceding case.  I believe this is a way to have the attorney get a name for him/her self and to backdoor a way to get attorney fees.  It is also a way to continue the low esteem of attorneys held by the public. This attorney did not enhance my esteem of my profession.  Even if Slobin's attorney wins, it is a loss for us all.   

Iowa v Planned Parenthood
Superior Ct.  

The DA's office on Buena Vista County Iowa has issued a subpoena to Planned Parenthood for a listing of all the patient names who had positive pregnancy tests during a nine month period.  The judge ordered subpoena is being appealed.  The reason for the subpoena is the finding of a dead fetus in the county.  The DA is attempting to find the mother.  The subpoena would be an intrusion of the privacy of the rights of all who went to Planned Parenthood.  It is illegal to release the names without the patient consent.  The judge, who needs a lesson in the law of privacy, stated that pregnancy tests are not medical records and therefore not protected by the physician patient privilege.  The Planned Parenthood has cooperated in the past by calling the person and getting authorization for the release of information. I hope both sides have alot of money because I can see this going to the Iowa or even the US Supreme Court.        Top


Morriman, MD v Kahn
Conn. Superior Ct.

A patient filled out a hospital survey form stating "the physician was very insensitive and somewhat incompetent."  The physician sued the patient for slander.  The law in Connecticut states that any person who provides information intending to help in the evaluation of a physician would not be liable.  The Court refused the patient's request for summary judgment because the intent of the patient was not known.  This would be a material fact and is a question for a jury.    

Hassan v Mercy American River
CA Supreme Ct.  

The California Supreme court has agreed to hear arguments regarding California Civil Code 43.8 protecting individuals from defamation suits when they give information intended to aid in the evaluation of a medical practitioner also applies to hospitals.  They will also take up the issue of complete versus conditional immunity.  The trial court had given a summary judgment to Mercy and the Court of Appeal had affirmed.          Top

Research and Consent

The HHS Office for Human Research Protections has chastised the University of California in San Francisco for their consent methodology.  The study was on ED patients too ill from lung disease to give formal consent by writing their name and could only nod their heads.  They also used telephone consent from relatives without giving the relatives any written material on the study nor allowing much in the way of questions and not telling the relatives of the potential complications. The other UC campuses have another consent policy which uses only court appointed conservators.  This is cumbersome and expensive.  There is currently a bill in the California Legislature (AB2328) to allow the use of proxy relatives for consent.  The federal  department does not have the authority to state who may sign under state law as a proxy.        Top

Why You Shouldn't Join a Health Plan

Several weeks ago I wrote about the physicians in Santa Rosa California having to continue to service the patients of the bankrupt Health Plan of the Redwoods HMO.  Now in Michigan a judge has placed an injunction to be reviewed YEARLY on physicians leaving the defunct Omni Health Plan.  If physicians ever needed a reason to spur joining the plans they now have two.  Boutique medicine is beginning to look better and better.        Top

Managed Care

Medical Associations v Insurers
Fed. Ct. Florida

In the ongoing battle between multiple physicians and their state medical associations versus the managed care industry another small victory went to the good guys.  Judge Moreno ruled that Cigna and Aetna must begin turning over the plaintiffs' requested documents.  The HMOs will continue to stonewall by now asking about what evidence can be gathered.        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.