August 15, 2008 Recent Legal News



Peer Review

Medical Marijuana




Klotz v Shapiro

The St. Louis jury awarded Klotz $2.58 million.  The award was 2/3 against Dr. Michael Shapiro and 1/3 against St. Anthony's Medical Center.  This came after a March, 2004, pacemaker insertion.  A month later Klotz got MRSA which cost Klotz the pacemaker, part of his right leg, part of his left foot , a kidney and some hearing.  Part of the money was for the wife who quit her job to care for the patient.  The problem is that the jury awarded just over $2 million for past and future economic and noneconomic damages.  He was retired.  An appeal will be forthcoming.  

Doe v Moffett
To Be Filed

A woman who was not identified in the story went to St. John's Hospital in Berryville, Arkansas, for a C-Section.  The physician, Dr. Shirley Ruth Moffett, not only performed the section but also an unconsented to tubal ligation, an intentional tort (battery) for which punitive damages are available.  The rationale was the physician was afraid the uterus would burst if the woman was ever pregnant again.  She then conveniently forgot to tell the patient about the ligation and forgot to put anything about it in her operative note.  The hospital did the right thing by removing her from the staff but the licensing board didn't.  They let her keep her license and just gave her a reprimand.  

 Doe v Abbott Northwestern Hosp.
To Be Filed

 A woman not identified in the story went to the Minnesota hospital for a pacemaker.  While under sedation for the procedure the surgeon used a cautery close to her nasal oxygen canula and the drapes caught fire.  The woman awoke and was put back under sedation when she calmed down to finish the procedure. She had an additional several day hospital stay due to first and second degree burns.  The reason for the fire was the hospital did not put the proper drapes in this particular operating room so oxygen pooled under the drape.  The state cited the hospital for 13 violations.      Top


US v Beverly
4th Circ

The 4th Circuit upheld the 151 month sentence of Kenneth Beverly of Rights of Passage Enhanced, a Virginia psychosocial rehab center.  He was convicted of Medicaid fraud for improperly billing for people who should not have been in the program.  There were over 16000 fraudulent claims.

NY v Express Scripts

Express Scripts and Cigna were fined a total of $27 million for a drug switching scheme.  They were accused of diverting money that was supposed to go for rebates to themselves and inflating the cost of generic drugs.  Express Scripts said they don't admit to any of the assertions but just wanted to pay this large sum to get it behind them. 

US v Ayers

Donald Ayers and Randolph Speer the COO and CFO respectively of National Century were sentenced to 15 and 12 years in prison for fraud.  The two and others took out personal unsecured loans that bankrupted the company and led to a massive problem with multiple other companies.  These two were earning over one million dollars a year and were greedy.  Sentencing for two vice presidents will be done soon.  A fifth member of the gang, Rebecca Parett,  fled and has not yet been found.

US v Sabaratnem

The FBI has arrested Dr. Rudra Sabaratnam, the CEO of City of Angels Hospital in Los Angeles and Estill Mitts, of the Assessment Center.  The two have been accused of paying homeless people to become patients in the hospital and surgical center.  Two other hospitals are being investigated for the same scam.  They are Los Angeles Metropolitan and Tustin Hospital, both owned by Pacific Health Corporation.  

California v Sequoia Health Centers

 The State has accused Dr. John Maffeo the CEO and CFO Sybilla Walyski of the now defunct Sequoia Health Centers of grand theft  and MediCal fraud.  They had re-billed for 5600 MediCal claims that had already been paid. The accused claimed it was computer problems.

US v Christ Hospital

The government has accused Christ Hospital of Cincinnati and its parent The Health Alliance of Greater Cincinnati and the Ohio Heart and Vascular Center of running a kickback scheme.  They are seeking $140 million and possible treble damages.  The government also wants penalties of between $5000 and $11,000 for each of an approximate 10,000 fraudulent bills submitted.  The accusation is that physicians at Christ and Ohio Heart referred patients to each other illegally.  Physicians who referred more surgical patients got more diagnostic time. This is a whistle blower suit and the hospitals were warned that what they were doing was illegal.  They paid no attention.  They may pay attention and money now.    

Cook v Medical Savings Ins. Co
10th Circ

The court upheld a $1.1 million verdict against the insurance company to an enrollee for misrepresenting its insurance policy to make Cook purchase.  The insurer had in its plicy one thing but actually had an internal policy to pay much less than usual and customary for hospital stays.  Cook had a bill of about $20,000 which the insurer paid only $7000.  The hospital rejected the payment and billed the patient for the full amount.  Cook sued and the jury awarded $550,000 in compensatory and the same in punitive damages.  The slimeball insurance company offered to pay Cook's hospital bill in full after he brought suit.  In Oklahoma, where this took place, emotional damages are allowed in fraud. It's always nice to see true justice prevail.   

US v Blue Cross

Tennessee Blue Cross/Shield agreed to pay a penalty of $2.1 million for failing to adjust cost to charge ratios creating outlier payments to the hospitals.    

McCullough v Zimmer 

 McCullough, a distributor of orthopedic replacement parts has sued Zimmer, DuPuy, Biomet, Stryker and several orthopedic physicians.  The claim is that the companies illegally paid kickbacks to the physicians to use their products forcing McCullough out of business.  This suit is an offshoot of last year's federal investigation of the same issue where the companies in the federal case paid $311 million in fines.      Top

Peer Review

Smith v Selma Community Hospital
Ca Ct. App

The hospital MEC recommended the termination of privileges for the physician due to his termination of privileges at two other hospitals.  He went to the peer review committee and the MEC recommendation was reversed.  The MEC appealed to the Board which sided with the MEC.  The physician sued and both the lower court and the appellate courts ruled that the board was wrong to state the peer review body must accept as true the other hospital findings.  The peer review body had not treated the other hospital findings as true.

Jadwin v Kern County
ED Cal

In this federal case the physician wanted peer review files on physicians other than the one under review.  The federal law uses a balancing test between the need for disclosure and the need for individual privacy.  Here there could only be limited disclosure and protective orders for that information given.        Top

Medical Marijuana

San Diego v California
Ca Ct App

San Diego and San Bernardino counties have been fighting the medical marijuana law in the state.  They lost.  The Court of Appeals stated that they must issue the state medical marijuana cards to those individuals who physicians state may be helped by the drug.  At the same time as the court issued its opinion the feddies raided a medical marijuana dispensary in Culver City just out of Los Angeles.      Top  


Johnson v Riverside Healthcare
9th Circ

The lower court ruled in summary judgment for the hospital.  The 9th Circuit reversed and remanded.  The black bisexual physician's privileges were removed for non payment of staff dues.  He reapplied for staff privileges and was denied.  He sued for workplace harassment for sexual and racial discrimination (harassment).  The court stated the sexual claims had no place in the Section 1981 claims as this only covers racial claims.  He did have a claim for a hostile work environment.         Top


US v Urologist

A 65 year old Indian Urologist on his way to the AUA meeting in Los Vegas on Southwest Air had to practice his specialty while the plane was in the air.  He went to the front bathroom but found it occupied and went back to his seat.  The place captain then emerged from the bathroom and the physician rose from his seat to go forward.  He was pushed back in his seat until the captain re-entered the cockpit.  He then went to the bathroom.  When the plane landed in Los Vegas the FBI was waiting and took him away in handcuffs.  He went to court, spent a night in jail and pled guilty the next day in court to a misdemeanor and paid $2500.  The carrier gave him a compensatory letter with a $100 voucher.  That isn't going to cut it.  He's suing Southwest and should win much more than the $100 voucher and the $2500 he had to pay for the airlines paranoia.  This is not the first time Southwest has been involved in controversy.          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.