July 1, 2007 Recent Legal News




Fraud & Abuse



Peer Review


Physicians v UnitedHealth
11th Circ

The Appeals court ruled for UnitedHealth in the physician's case against all insurers for fraudulently either paying late or withholding payments.  Of all the insurers sued, this is the only one to date to not settle and to win a summary judgment.  It should be interesting to see the next step for the physicians since the attorneys have already been paid many millions of dollars.  

Waugh v WellPoint

Ms. Waugh filed a sexual battery suit against WellPoint for the actions of the CFO, David Colby.  The suit alleges that Colby had sexual alliances with about 15 females while he was employed.  The Company was aware of the liaisons according to Waugh.  Other women have sued Colby for breach of contract.  The women have already sold their stories.       Top


Lawnwood Medical Center V Medical Staff (Seeger)
Fla Ct. App

The Legislature passed a special law for the benefit on the two hospitals in St. Lucie County, both owned by the same private corporation.  The medical staff sued to overturn the law and won in the lower court.  The hospital appealed and fortunately lost again.  The court stated that the bylaws were a contract in Florida between the hospital and the medical staff.  The court stated that there could be no law under the Florida constitution that could diminish the terms of the contract.  This proposed law would have diminished the power of the medical staff of the hospital and so is illegal.

Physicians v Hermann Memorial

First the physicians and now the physician owned hospital, Houston Town and Country, have sued the largest hospital system in Texas for illegal conduct causing the smaller hospital to fold.  There are apparently emails from Hermann to the insurers that state if any of them do business with the small hospital then will be charged 25% more to utilize the system.  No insurer put the physician owned hospital in their system after the threat.  Hermann is a non profit hospital that also threatened the physicians with economic removal from the hospital.      

Gentilello v Parkland Memorial 

Dr. Gentilello, the former division chair of UT Southwestern Medical Center (Parkland) in Dallas, has sued the hospital for illegal reduction in rank after he did a whistle blowing on the hospital's use of unsupervised residents on trauma patients. The physician is a tenured professor of surgery who found that patient were getting improper care at the Parkland county hospital.  There is currently a restraining order forbidding the hospital from filling the position.  A temporary injunction hearing is in the works.  The doctor is asking for reinstatement to his position, attorney fees and damages.       Top


Louisiana v Pou
In Progress

The New Orleans DA has promised to drop murder charges against two nurses so they may testify before the Grand Jury in the case of murder by the physician of the patients during Katrina.  The problem is they are still at risk since the DA has not been forthcoming in the past and may charge the nurses with lesser crimes such as manslaughter.  Usually the DA may drop charges for testimony if their case is weak.  The other problem is the possibility of the State's Attorney prosecuting the nurses on his own if the New Orleans DA does not.  Anything the nurses say in the Grand Jury can and will be used against them.        Top

Fraud & Abuse

Stanford v GSK

It didn't take long for the first of thousand of law suits against GlazoSmithKline to be filed.  The physician at the Cleveland Clinic will now become even richer testifying against Avandia as he had against Vioxx.  This week I got a email asking if I was taking Avandia and if I had any heart symptoms.  If I did I was supposed to fill out a form and email it back to the attorneys.  What a sleaze.  Avandia has been long known to cause edema due to fluid retention and the PDA so states.  The science relating Avandia to MI is weak at best.

OIG Advisory Opinion 07-05

The OIG opined that the sale of part of the physician's shares in an ASC for FMV in cash to a hospital was potentially illegal. The opinion stated that the hospital would be in a position to steer patients to the ASC.  The OIG also stated that while none of the factors standing alone was enough to take it out of the safe harbor, the combination was enough.  I believe the OIG did not have their head on straight as all sales are for profit and are usually in cash.  The hospital employed physicians were not allowed to refer to the ASC.  Bad decision.  

 Renal Physicians v HHS
DC Circ

 Any bet on who wins this even without knowing the facts.  You're right.  The physician group was found to not have standing in their suit against the government for putting in a Stark safe harbor.  The safe harbor was to allow personal service providers to be reimbursed at FMV or below.  The medical directors may be disallowed from referring patients to the dialysis clinics.  The Court stated that the rule was voluntary and that even if they won the action they are seeking would not be redressed.  This means the dialysis centers would need to reduce compensation to it's medical directors to the safe harbor area.

US v UConn

The University of Connecticut has agreed to pay $475,000 to settle charges that they charged too much for their cancer treatments.  The hospital billed on an hourly basis instead of a per patient basis.  The University blamed not their own ineptness and greed but the Federal regs.       Top


US v Federation of Physicians

The government accused the federation of helping physicians in the Cincinnati area get favorable contracts.  The federation agreed to stop helping and not teach physicians to negotiate with insurers.  The latter sounds illegal.        Top


Grey v Stamford
Conn. Supreme Ct.

The patient had a wrong diagnosis of a breast mass by a radiologist.  Originally he found something suspicious and asked the patient to return.  The next exam was read as normal and she was asked to come back in a year.  The patient had breast cancer and it was not picked up until later.  Her case was dismissed due to the statute of limitations.  The patient stated that it was a continuation of service.  The court denied that argument since the patient was not getting any ongoing therapy from any physician for any breast disease.  The problems was on follow-up breast exams and not the radiographs per se.  

McNamee v Sandore
Ill. App. Ct.

 The patient had a bad baby and sued the hospital stating the pysician was an agent of the hospital.  This settled and then the plaintiff filed suit against the physician as an independent contractor denying there was an agency relationship.  The court bought it even though it is nonsensical.  Whoever said the law had to be logical?

Dewald v HCA
Teen. Ct. App.

The Court stated that the mere perception of agency by the patient was not enough to make one an agent.  The hospital did nothing to enforce an agency relationship enen though the patient did not sign a form that stated no agency existed.     

Boren v Weeks
Tenn. Ct. App.

The intermediate court reversed a lower court ruling against a hospital and agreed that there was no apparent agency.  The hospital had the plaintiff sign several notices that the physician was not an agent of the hospital. 

Montgomery v  McCoy
Ark. Supreme Ct,

The high court upheld a $3.5 million award against Dr. Mark McCoy and Cooper Clinic for negligence resulting in the amputation of a leg. The jury awarded $2.8 million in actual damages, $200,000 for loss of consortium and $500,000 in punitive damages.  The issue was whether negligence carried punitive damages.  The high court ruled that the physician falsified medical records to show the patient needed the surgery.

Kenyon v UConn

 I wonder how much this will cost the citizens of Connecticut?  A nurse has been charged criminally of giving narcotics without a doctor's order and assault on the elderly.  The hospital has been charged by the state for numerous violations and failing to report the incident.  The incident is a nurse giving an 86 year old man with a fractured hip an overdose of narcotics causing death. The nurse then lied and said she had a verbal order for the medicine.  The physicians denied ever giving the order and stated the patient was not hers.

Ermoian v Desert Hospital
Ca Ct. App.

The patient was born with brain abnormalities and mental retardation. These were unpreventable.  The suit was for not telling the mother so she could make an informed decision as to termination of the pregnancy.  The Court ruled for the hospital and physicians on all charges. There was no breach of contract and the problems were not found until after the 20th week so abortion was not an alternative since there was no potential injury to the mother. 

Zurga v Burdette Tomlin Hosp

The patient stated that the  beginning symptoms of a stroke at one time and the on call neurologist did not come with in the 30 minute window to give clot busing drugs.  The patient had a full stroke.  The other side of the coin is that it was already 3 hours after the stroke and that thrombolytic therapy was already too late.  The court ruled that the hospital was not allowed summary judgment since there were issues to be decided.    Top

Peer Review

Hetz v Aurora
ED Wisc

Dr. Hertz was denied privileges at the Aurora Medical Center of Manitowoc County.  He filed suit stating he was discriminated against because he has sleep apnea and a bipolar disease.  The Court denied summary judgment to the hospital stating that the physician had a claim under the ADA as one who was an independent contractor and was applying for the benefit of his own work.  

Scott v Beth Israel
NY Appellate

The physician sued the hospital for termination without cause and no severance pay.  The hospital said there were economic grounds for the termination as the physician was part of a public protest against the hospital and attempted to get some physicians to leave the hospital.  The issue was not raised in the action by the hospital and the court gave the hospital summary judgment on all even though the issues were not raised.  The appellate court rightfully thought this was wrong.        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.