January 1, 2003 Recent Legal News

Fraud and Abuse

US v HCA
Settlement

HCA has agreed to pay an additional $630 million in fines to close all remaining allegations of fraud.  This included physician kickbacks, overstated expense reports and overcharging for its wound therapy.  This would bring the total paid to the government up to $1.7 billion.  

US v Columbia University
Settlement

Columbia University has agreed to pay $5.1 million to settle charges that many of the procedures billed for were performed by residents and others not eligible for payments.  The University also agreed to a five year compliance oversight by HHS.  Physicians were paid $50 to write OB notes on patients they were not present at.

Up to now the government has collected $1.2 billion from all sources relating to healthcare fraud this year.  Since the program has started it has collected over $10 billion.  

US v Kitsap Physicians Service
 9th Circ.

The government and a Qui Tam plaintiff lost a case.  They accused the defendants of violations of the False Claims Act but did not present a single false claim as proof.  This led to a summary judgment in the District Court and was upheld by the 9th Circuit.  

US v St. Luke's Subacute Hospital of San Leandro California and its CEO have been convicted of fraud.  They submitted false nursing cost reports.  The CEO directed his employees to manipulate the books.  Sentencing will  be later but the statutory penalty is per each of the six counts five years in prison and a fine of $250,000 plus restitution.  The corporation can be fined up to $5.9 million.   Top

Antitrust

US v Mountain Health Care
Settlement

This settlement between the US and an IPA in Ashville North Carolina was not good for the IPA.  The government issued a cease operation order and the same day sued them for antitrust violations.  The claim was the IPA adopted a uniform fee schedule to be paid to participating physicians.  The settlement of was the ceasing of operations and a consent decree.  

HemaCare Corp. v Red Cross
Settlement

HemaCare sued the Red Cross for their antitrust actions in bundling its blood products causing higher prices for platelets and less for the other products.  The Red Cross agreed to stop the bundling in New England and the Carolinas.  There was no money involved in the settlement.  

OIG Looks at Conditional Credentialing

The OIG is looking into the practice by some hospitals of only credentialing physicians who will play their game.  The OIG may call this remuneration if the physician must admit a certain percentage of patients to the hospital or if they can not have privileges at other hospitals or ASCs.  As much as I hate government interference in medicine, I hate  hospitals bullying physicians even more.  So, go get em OIG.        Top

Defamation 

MDs v Greater Cincinnati Physicians 
Trial Ct.

Six physicians, including the former medical director, left the group and then sued their old group.  The physicians allege that the group agreed to allow the physicians to remain in the office owned by the group and  that the group would assist patients in transferring the records.  Instead the group has stated to patients in a letter that the physicians would no longer be a part of the group and that no forwarding address was available. The suing physicians want releases from their employment contracts, electronic patient lists, patient records and office equipment along with an agreement that the group will transfer medical records when requested by the patients.  The group state the physicians are in violation of non-compete contracts and that the case should be arbitrated.  The judge has ordered that new letters be sent to all patients giving the true details.  

Gentry v Norton Healthcare 
KY ALJ

Gentry, a nurse at Norton, was fired for using saline to clear an IV line without a physician order.  This is a normal procedure for nurses to do.  They not only fired Gentry but reported her to the Nursing Board.  Two hearing panels cleared Gentry but the Board voted to probate the license.  This has been overturned in court and in the court of appeals.  It has now been appealed to the KY. Supreme Ct.  Gentry is to get back pay since her firing in 1999 and her old job back.  Oh yes, Gentry was also a major supporter of a nursing union at the hospital.  I'm sure that had nothing to do with the idiotic hospital and Nursing Board action.  Top

Breach of Contract

MDs v Norcal Ins.
CA Superior Ct.

700 physicians were awarded $156 million in a court decision against the malpractice insurer Norcal.  The physicians originally formed Physicians Interindemnity Trust, which split losses from cases among its members.  Norcal purchased the trust and stated it that premiums would pay for claims previously paid by the Trust.  This worked until the Trust went bankrupt three months later.  This left the physicians with a $56 million headache.  This money is the two aspirins and the morning call. 

Team Health v Universal Care of Tenn.
Tenn. Superior Court

The court has ordered Universal Health of Tennessee, a MCO of TennCare to pay Team Health $347,000 in unpaid bills.  These bills are non-disputed and date from prior to 4/11/02.  After that date the State will assume the risk.  Team Health also has sued for $1.4 million in claims since 4/11. 

Dardinger v Anthem
Ohio Supreme Ct. 

Dardinger sued Anthem Blue Cross and Blue Shield after they cut off payments for his wife's cancer therapy.  This was after the treatment was found to be helping.  The denial letter came the day after his wife's funeral.  Dardinger won $32.5 million including $30 million in punitive damages.  The Ohio high court stated that Dardinger is to get $10 million and the remainder after attorney fees will go to Ohio State Cancer Research Centers.         Top

Peer Review

O'Meara v Palomar Pomerado Health Sys.
CA Ct App

OMeara was placed on probation by the hospital.  He sued and lost in Superior Ct. due to lack of fulfilling all judicial remedies since he didn't go through a California writ of mandate.  The Court of Appeal overturned the summary judgment and stated that since he received no significant hearing on his case.  He only received an ad hoc meeting where he could not contest the charges.  This hospital desperately needs a new attorney who can write bylaws.

In Re Tollison
Texas App. Ct.

A patient sued a physician for medical malpractice and attempted to use public documents of peer review in their case.  The court said "no".  These are protected documents and cannot be utilized even if made public in another case.  In Texas the physician is the holder of the privilege.        Top

Civil Suits (Punitive Damages)

Bullock v Philip Morris
CA Superior Ct.

Bullock sued Philip Morris for her lung cancer after smoking for decades.  She sued on the manufacture of a defective product, negligence and fraud.  She won initially $850,000 in compensatory damages and $ 28 BILLION in punitives.  The judge has now reduced the punis to $28 MILLION.  The judge refused a Philip Morris plea that the verdict be overturned and a new trial be held.  He stated that the plaintiff had showed that Philip Morris has know about nicotine and lung cancer since the 1950s and that the plaintiff had proven the company had lied about the effects.  The company plans to appeal the entire verdict.  
Bullock has accepted the reduction in punis and has also filed suit to overturn the decision.  By accepting the reduction, she does not have to go through another trial on punitive damages and can still appeal since it is her contention that the judge did not give adequate reasons for his decision.      Top

HCQIA Constitutional

Freilich v Upper Chesapeake Health
4th Circ

The 4th Circuit upheld the constitutional attack on the Health Care Quality Improvement Act (HCQIA).  Freilich was not reappointed to the staff due to violations of the bylaws regarding ethics and behavior.  She stated she was advocating for dialysis patients.  She also claimed the law was unconstitutional.  The court used a rational basis test which will almost always uphold a law and stated that deference must be paid to those responsible for quality of care.  Freilich also tried the ADA approach that she was advocating for disabled patients.  This didn't fly either since advocating is not the same as being one.  Maryland also has a statute requiring hospitals to consider the physician's attitude, cooperation and ability to work with others at reappointment time.  This law was also found to be legal.        Top

Malpractice

Settlement
CA Sacramento Superior Ct.

The settlement happened during a mandatory settlement conference prior to trial.  The case involved a woman who presented to the ED with urosepsis.  She then had respiratory distress and hypotension.  She suffered significant brain damage from the events and is now bedridden. The hospital settled for $2 million for delay in the patient's treatment causing the injury.  

Settlement
San Diego Ct.

The plaintiff had headaches and had an MRI on December 14, 1999.  It was read as normal.  Another MRI eight months later showed an aneurysm.  While being prepared for surgery the aneurysm broke causing significant damage.  The first MRI was misread and actually showed the aneurysm.  The radiologist settled for $950,000 of his $1 million insurance.    

Battles v Wesley Medical Center
Kansas Superior Ct. 

Battles was injured in an automobile accident and suffered a closed head injury.  He was taken to the a hospital and then transferred to Wesley Memorial in Wichita.  He was evaluated by the trauma team and 1 1/2 hours later had a CT scan of the brain which showed bleeding.  He went to the ICU and deteriorated the next day.  A second Ct scan was performed and showed significant increased bleeding.  He did not have surgery until the following day and died the next day.  The suit states this delayed treatment caused the death.    

Zreik v Kaiser
Arbitration

Zreik, a 44 year old male went to Kaiser for hemorrhoid bleeding.  He was treated with rubber banding and sent home.  Post-op he had significant problems with abdominal bloating which was said to be constipation.  No one looked at the area of banding.  When they finally did look one week later he had infarcted bowel and sepsis.  He died.  Cost $998,000.  This is the second or third malpractice case that I know of against Kaiser for death following hemorrhoid surgery.        Top

Cigna Foiled 

Kaiser v Cigna
Ill. Superior Ct.

Kaiser, a physician, sued Cigna for their ClaimCheck program which inappropriately reduced or cancelled physician payments.  Cigna agreed to a settlement in this class action case which may have cost about $200 million.  However, the Federal Court in Miami issued an injunction against the settlement as long as the case in Miami against all the insurers was going forward.  The attorneys are feuding since each one wants the fees and the class plaintiffs are essentially the same. Cigna will appeal Judge Moreno's injunction order.        Top

Prescription or Chemotherapy

Otis v Well Care HMO
Florida Superior Ct.

Can an oral medication also be chemotherapy?  This is the argument before the court.  The patient has a terminal brain cancer and according to her oncologist can only take oral Temodar, not in IV form.  The medication costs up to $9000 per month.  The HMO states it will not pay for the medicine since it is a prescription and the patient's policy does not cover prescriptions.  the patient states it is chemotherapy and that her policy does cover chemotherapy.  The suit is for an injunction to force the HMO to cover the cost of the drug and for unspecified damages.  If there is no exclusion that states chemotherapy can not be oral meds, the HMO should have to pay.              Top

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