February 15, 2017 Recent Legal News





Peer Review and Employment



UnitedHealthcare v Next Health

The insurer filed a suit against the Dallas lab network for allegedly bribing physicians to use their services for "wellness tests".  The suit says that the lab gave $50 gift cards to people at a burger place to have them pee in a cup for the tests. The insurer says they had to pay $100 million due to the fraud.  This is the fourth time this year a Dallas provider has been accused of fraud.  Tenet paid $513 million for kickbacks.  Trilogy Pharmacy owners were indicted as were the owners of Forest Park Medical Center. It is alleged that the lab also paid a 20% kickback to physicians to use this lab. 

US v Windsor

Dr. Robert Windsor of Lexington, Kentucky, a pain management physician, paid $20 million to settle allegations that he bilked the feds by billing for surgical monitoring services that were non-existent.  He was supposed to do the monitoring but had an unqualified person do it.  He had been previously sentenced to three years two months in prison followed by three years of supervised release.  To pay the money Windsor will sell all his properties save one plus two boats and four jet skis.  

US v Daller

Dr. Meir Daller, a Urologist in Fort Meyers, Florida, will pay $3.8 million to settle allegations that he did and billed for FISH tests for bladder cancer that are not recognized by fed med as legitimate unless it is to monitor cancer re-occurrence or with a patient with hematuria after a full medical work up.  The tests were done by his employer 21st Century Oncology.  Daller was aid a bonus of $2 million by 21st Century for ordering these tests.  Prior to this 21st Century paid $19.75 million and Drs. Robert Scappa and David Spellberg also paid large fines for the same violations.  This is a whistleblower case of a former medial assistant.  She will get $571,000 from this to add to her prior $3,437,000 from the other cases.

US v Holland

John Holland, a former Tenet executive at Tenet Healthcare, was charged with fraud for paying bribes for referrals.  He is alleged to have made false statements to conceal the fraud.  

FTC v Coopertiva de Medico Offalologos de Puerto Rico
Consent Decree

In a good case of "I don't know what they were thinking"  the organization did a classic illegal maneuver by having its members not sign en masse a contract for lower fees in a managed care environment.  This left the insurer to pay the higher fees.  Dumb!

US v Mylan NV

Mylan has agreed to pay $96.5 million to settle allegations that it delayed launching a generic drug for payments by the owner of the drug.  

US v TeamHealth

TeamHealth agreed to pay $60 million to resolve allegations of false claims.  The feds alleged upcoding by a company they purchased.  Soon after the settlement TeamHealth was purchased by Blackstone.  

US v Monaco

Stephen Monaco DPM of Philadelphia was sentenced to 8 years in prison for billing for procedures either not done or not necessary.  He also has to repay $4,960,000.

US v Kaiser

Kaiser agreed to pay the feds $850,000 to settle allegations that it broke the Controlled Substance Act law.  They filled incomplete prescriptions and failed to maintain adequate records.

US v Comprehensive Health Services

The Florida medical service provider agreed to pay $3.8 million for double billing on an IRS contract.  They charged extra for services already paid for under the contract.

US v University Behavioral health of El Paso

The hospital paid $860,000 to settle claims that it paid kickbacks to physicians for referrals.

US v McCardell

In the above case the Behavioral Hospital administrator was found guilty in a trial.  He paid kickbacks to physicians for referrals.  He is to be sentenced later.

US v Tartell

Dr. Paul Tartell, an ENT in Plantation, Florida, agreed to pay the feds $750,000 to settle claims that he billed for procedures that were not medically necessary.  This settlement was a qui tam from a former patient.

US v Marder

Dr. Gary Marder of Palm Beach County, Florida, agreed to pay the feds over $18 million to settle allegations that he and Dr. Robert Kendall did unnecessary biopsies and radiation therapy for treating skin diseases.  The suit also claimed kickbacks and doing radiation with unqualified personnel.  This was a qui tam suit from another physician.        Top


DaVita v US

DaVita sued to collect money from the fed for services provided to the VA which were never paid.  The suit was settled by the government agreeing to pay $538 million.  This is the latest win for the dialysis company.  They also won in court recently stopping the feds from saying they could not pay patients insurance premiums for Ocare.  

Moda Health v US

The feds lost a second case when a judge ruled they owe Moda Health $214 million that they did not pay in the risk corridor program.  This judge ruled the risk payments are a binding contract where a prior judge ruled for the feds saying there was no contract.  That judge was from Chicago.  The feds owe insurers about $8.3 Billion for these payments.

Health Care Foundation of Kansas City v HCA

HCA has agreed to pay the fed $188 million to settle allegations that they breached their contract.  When they purchased Health Midwest in 2003 HCA agreed to spend at least $450 million in capital improvements.  They did not and in 2015 were ordered to do so.  They appealed saying they had built new hospitals in nearby counties.  The court reduced the amount owed to the $188 million and the parties agreed with the figure to end the case.  

Patients v CMS

CMS has agreed to correct the misconception that physical and occupational therapy are covered only if a patient is improving.  The insurer can not deny just because a patient has reached a plateau.  It is OK for rehab to maintain or prevent decline in function.  CMS is also to hold a training session for claims processors and appeals judges.

US v Anthem-Cigna

A federal jusge backed the ruling of the Justice Department in disallowing the merger of the two health insurance giants.  She said the merger would harm competition nationally.  She also cited Cigna's testimony that undercut the future savings.  The two will now appeal and fight over the breakup fee of $1.8 Billion that Anthem may owe to Cigna.        Top


US v Children's Medical Center of Dallas

The hospital has agreed to pay a fine of $3.2 million for not doing what it was supposed to do under the HIPAA security rules.  In 2009 over 3000 were put as risk due to an unsecured Blackberry being lost and in 2013 almost 2500 were put at risk due to an unsecured laptop. They ignored recommendations of consultants and are now paying the price.

Patients v Family Medicine East
To Be Filed

A thief broke into the offices of the medical group and stole a desk top computer.  The computer had office notes on patients for two years.  This was said to have been missed on prior risk analysis.  Encryption was not mentioned.

Patients v Verity Health
To Be Filed

About 9000 patients of the Redwood City, California, system had their information compromised due to an unauthorized accessing the information.          Top


Corbitt v South Georgia Medical Center

In a case where I am surprised does not happen more often, Dr. Mark Corbitt just finished an emergency appy and sat down on a rolling stool to write his charting when the stool moved. He fell and struck his head and has severe headaches and epilepsy causing him to lose his practice.  He sued and won $7 million.  The hospital argued that the physician was just careless but a technician had warned the hospital earlier about the danger and was ignored.  The verdict was for $10 million but the physician was found 30% at fault.  

Thomas v Nationwide Children's Hospital
SD Ohio

The parents of a child filed a suit against the hospital claiming the hospital violated the rights of patients and the parents by ordering tests for criminal prosecution and not medical purposes.  They requested while deposing a nurse the hospital refused to allow her to answer any questions relating to the database system.  The court said that since the suit was not regarding medical information but wanted information why tests were done without their consent and were on their bill the information was germane.  There was no issue of the competency of the tests performed.

Ramirez v Long Beach Memorial Medical Center
Ca Ct App

The decedent came to the ED with a GSW of the leg.  The physician told the secretary to call the vascular surgeon but she called the wrong one but then called the correct one.  After a short delay he operated on the patient and post op he had a heart attack and died.  The family sued saying the delay caused the death. During summary judgment the surgeon, nurse and on call service were granted summary judgment thus getting the hospital off the hook.  The plaintiff attorney then wanted further depo for the ward secretary to try and get the hospital.  The court said nope since the secretary was not in charge of the on call list and so was not liable for any delay.  

Thomas v Tenet Healthcare
Ga Ct App

The patient was in an auto accident and when at the ED the physician requested a cervical spine x-ray.  This was done and sent to a radiologist to read.  He said no fracture and a nurse under physician's order removed the cervical collar to allow the patient to be discharged. He was found quadriplegic and unresponsive.  There was a cervical fracture.  During discovery the hospital was found to have a policy the physician is to remove the cervical collars. This caused the plaintiff to want to amend their suit to include the hospital.  the lower court said no but he court of appeals said yes even though the stature of limitations had run.  The hospital had had fair notice in the original complaint. 

Munoz v Watsonville Community Hospital
ND Cal

The patient came to the ED for abdominal pain.  She had prior gastric bypass surgery.  She came to the ED twice the same day and was treated with laxatives.  She had an internal hernia which is a known complication of the surgery and she was released with a pain of 8/20.  She died soon after and the family sued but for EMTALA as well as med mal.  The court said the suit for EMTALA due to disparate treatment must fail but the suit under EMTALA could proceed since she was still in severe pain upon discharge.

Charles v South Baptist Hospital of Florida
Florida Supreme Court

The Florida high court ruled that a hospital may not claim privilege over records relating to a med mal case by declaring them patient safety work product and submitting them to PSQIA.  Florida has Amendment 7 which allows patients to get documents related to adverse medical incidents.  The patient wanted and now can get documents related to adverse medical incidents at the hospital and related to any physician who worked at the hospital

Taylor v Intuitive Surgical Inc.
Washington Supreme Court

The Washington state high court ruled that a medical manufacturer had the duty to warn hospitals about its products.  The company had warned the physician using the product and said this relieved them of the duty to tell the hospital.  The court said they have to tell both.  Taylor will get a new trial after a botched operation using a robot.  The physician and hospital had already settled.        Top

Peer Review and Employment

Adem v Des Peres Hospital
Mo Ct App

Dr. Adem was going to get his privileges taken away and requested a peer review hearing.  He objected to the composition of the hearing panel as it did not include practitioners of his specialty and had at least one member that was a hospital employee.  Guess what?  He lost as the court said the bylaws had no provision that disallowed a hospital employee physician and the other members of the panel were close enough to his specialty.

Gallo v Mayo Clinic Health System- Franciscan Medical Center
WD Wisc

A employed physician was told of performance concerns, was placed on unpaid leave and then she resigned.  A separation agreement was entered into which said how the hospital would reply to reference requests.  She had an offer from another but when Mayo was queried they said her performance was "fair" and she did not get the position.  She sued but of course lost since she could not prove either the breach nor damages.  

Sullivan v Sharp Grossmont

In a suit against this physician unfriendly hospital, Dr. Sullivan, the former Chief of Anesthesia, states he was forced to resign after filing multiple complaints to the hospital regarding patient safety concerns.  This comes several years after the same hospital was embarrassed by the CEO going after another member of the anesthesia staff due to personal animus.  He alleges that the hospital again placed cameras in the OB suite taking videos of the women.

Offor v Mercy Medical Center
2nd Circuit

A Black female physician alleged racial discrimination and a hostile work environment.  The court found her discrimination could not survive but did find that her retaliation could go forward since she was placed on probation one month after attempting to exercise her FMLA rights.

Ross v HCA

Wendi Ross, RN, filed suit against Florida Hospital and HCA for her dismissal.  Sje had a slip and fall injury and was drug tested per protocol.  She failed but the dug was prescribed and that was confirmed.  She claims she was let go not due to the drug test but because she filed a prior discrimination complaint and was given a right to sue letter.  

Lalonde v Central Maine Med Center
Maine Supreme Court

The Maine high court ruled the suit by a physician against the hospital for indemnification could continue.  The hospital got into this mess when it reported the physician to the state after he was terminated due to concerns about his clinical judgment and behavior.  The physician had in his contract an indemnification clause saying the hospital would indemnify any person who was or is a party to an action by reason of the fact that the person was an employee of the hospital.  The physician had put out money to defend himself from the state due to the hospital's actions.  The hospital was immune for reporting but not from the indemnification clause.        Top


New York v Moschetto

Dr. Anthony Moschetto, a Long Island Cardiologist, was sentenced to five years in jail for attempted murder of a competitor.  He paid $5000 to have a rival physician and former partner killed.      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.