July 1, 2016 Recent Legal News


Peer Review and Employment







US v Calderon

Former State Senator Ronald Calderon of Montebello plead guilty of federal mail fraud for accepting bribes from an owner of a Pacific Hospital of Long Beach  who wanted a law to stay intact.  The California law allowed a hospital to pass on to insurance companies the full cost of medical hardware used in spinal surgeries.  The hospital purchased the hardware at huge inflated prices from a company that the hospital owner controlled.  Calderon received payment by having his son work at the hospital for a summer for $30,000 and also received payments toward his sons college and pay for work is daughter was to do but did not.

US v Dunning

  Jonathan Dunning of Hoover, Alabama, was found guilty by a jury of conspiracy, bank fraud, wire fraud and money laundering for his part in funneling money from the feds to his private use.  The group  he was the CEO of Synergy Entities was supposed to provide services to the underserved.  He pocketed the money himself instead.        Top 

Peer Review and Employment

AndRa v Sonoma West medical Center

Autumn AndRa, the CNO of the hospital was constructively fired and then sued the hospital.  She states she was fired for stating that the hospital EHR was dangerous and harmful to patients.  The EHR is a new one by a software developer Dan Smith.  She claims that Smith donated large sums to the hospital in order to get his software into use.  She states the EHR is riddled with problems and is unsafe.  The hospital of course denies all the allegations.

Irani v Palmetto Helath

A resident sued the health system for a hostile work environment because the program director said the he was Achmed the Terrorist and joked that he might blow up the hospital.  This happened twice and therefore not enough to create a hostile work environment.  The hospital won summary judgment.  There is no mention of what happened to Achmed.

Cooper v Pottstown Hospital 
3rd Circuit

Cooper was fired after the hospital found out he was referring patients to a medical practice that Cooper owned and was in competition with Pottstown.  He said the the hospital violated the Anti-Kickback by hiring him twice to induce referrals.  The courts all found there was not enough evidence to support the allegations.  The contract was an at will contract and said that it was not in exchange for patient referrals.  There was a non compete for thirty miles and Cooper breached it.

Ramsey v Siskiyou Hosp.

The nurse was to give TB skin tests to other employees.  In researching causes of a positive test she accessed an employees results and consulted the lab tech.  The tech reported her for HIPAA violation since she did not order the TB test.  The hospital investigated and then terminated the nurse.  She sued stating she did not violate HIPAA and she was terminated due to age.  She had always received excellent performance reports.  She presented evidence that the hospital had discussed getting rid of older employees due to expensive health insurance.  The court said that she raised enough probability so denied the hospital's motion for summary judgment.  This hospital needs new legal counsel if the counsel was told about this prior to the termination.        Top 


US v 301

In one of the largest national Medicare fraud raids ever the feds arrested about 300 people for false billings of about $900 million.  Besides the arrests the feds also suspended payments to a number of providers.  The fraud ran the gamut of all medical issues and all types of fraud.  The mass arrests included 61 physicians or other healthcare professionals.  The areas involved were south Florida, south Texas, north Texas, Central California, east Michigan, middle Florida, north Illinois, east New York and east Louisiana.  There were also unsealing of search warrants throughout the country.

Universal Health v US(Escobar)
US Supreme Court

The high court again passed the buck and sent the case back for another look to avoid a tie vote.  In this case the parents of a Massachusetts teen with seizures died after treatment at a mental health clinic.  The counselors were not licensed professionals.  The filed a whistleblower fraud case since they were billing Medicaid illegally.  The appeals court allowed the claim to go forward.  The provider community went nuts and the appeal to the Supremes followed.  The high court split the baby by allowing implied false certification in fraud and saying the hospital can not escape liability by using misleading half-truths.  However, the plaintiff must prove the shortcomings were material and significant and that that standard is demanding.  The lower court must decide if the claims are material.  This was a unanimous decision. 

US v Chikvashvili

The federal judge sentenced Rafael Chikvashvili to 10 years in prison as well as over $6 million in restitution for his Alpha Diagnostics, a portable x-ray provider.  His company did not have some x-ray read by a licensed physician.  This led to the deaths of several patients.  He falsely represented to the insurers that professionals read the films.  The techs interpreted the films and echos.  They forged a licensed physician signature on the reports.  

US v Biodiagnostic Laboratory services

The lab that spurred the larges test referral scheme in the US plead guilty of one count of conspiracy to violate the Anti-Kickback Statute.  The corporation which is now defunct must forfeit all assets.  The scheme got 40 guilty pleas, 26 from physicians.  

US v Monaco

Podiatrist Stephen Monaco of Havertown, Pennsylvania was arrested fro defrauding Medicare.  The feds claim he submitted fraudulent claims to Medicare for procedures not provided or not performed.  He is also said to have submitted claims for services not reimbursable.   

US v O'Brien III

Dr. William O'Brien III of Philadelphia was found guilty by a jury of causing a death via illegal distribution of a controlled substance and running a pill mill.  He was acquitted of four counts of distribution of a controlled substance.  He faces a 20 year to life sentence.  He conspired with the Pagans Motorcycle Club where he prescribed and they distributed the narcotics. He was also found guilty of conspiracy to engage in money laundering and bankruptcy fraud.  He hid his $20,000 per week take from the illegal activities by funneling the money to his ex-wife with which he was still living and working.  She had pled guilty.   

US v Martinez

A jury found four people guilty of health care fraud.  They were Kenneth Magidson, Giam Nguey, DO, Benjamin Martinez, MD and Donovan Simmons, MD, all of the Dallas area.  They did fraudulent billing for testing in various locations in the area.  Cappers rounded up patients and got them to the clinics all of which were owned by Zavan Pogasyan of Glendale, California.  The patients testified to being paid $100 each to go to the clinics.  Many others pled guilty prior to the trial. 


 CVS has agreed to pay the feds $3.5 million to settle allegations that it's Massachusetts and New Hampshire pharmacists filled hundreds of forged opiod prescriptions.  The company said they would improve training.

US v Renown Health

Nevada's Renown Health agreed to pay $9.5 million for alleged over charges.  This was a whistleblower suit for Renown charging for inpatients when it should have been outpatient.  The whistleblower is the former clinical director of clinical documentation and director of clinical compliance.  She tried to rectify the problems internally before quitting and filing suit.  Maybe Renown should have listened.    

US v McDonald

Dr. Sean McDonald of Paducah, Kentucky, pled guilty of fraudulent possession of controlled substances and wire fraud.  He defrauded Lourdes Hospital and Western Baptist Hospital by having them bill for controlled substances he absconded with.

US v Espindola

Dr. Juan Espindola has become the 27th physician found guilty of accepting bribes from the notorious Biodiagnostic Lab of new Jersey.  He took $1500 on a month for a year for referring blood samples to the lab.  

US v Marshall Medical Center

The El Dorado county California hospital has agreed to pay the feds $5.5 million to settle allegations that they falsely billed for hematology services that require the presence of a physician when none was  present.  They also have been accused of billing for double dose chemo but only giving single dose.  The whistleblower was fired from her position as an oncology nurse after telling the administration about the problem.  She will receive 26% of the $5.5 million or $1,430,000.   Yet another dumb hospital administration that does not listen. 

US v Qamar

 Dr. Asad Qumar of Ocala, Florida, will pay the feds $2 million and give up claims to an additional $5.3 million is suspended Medicare funds.  He and the Institute of Cardiovascular Excellence have been accused of billing for medically unnecessary procedures accepting kickbacks by waiving all co-pays from patients.  The physician is also banned from all federal programs for three years.  Most of the procedures were undocumented peripheral vascular.  By waiving the co-pays he became the highest paid Medicare cardiologist in the country in 2012 and 2013.  This was another whistleblower suit and they will receive and split $1,327,721.        Top 


FTC v Advocate Health Care
N Ill DC

The court handed the FTC another defeat.  This one was their attempt to dismantle the merger of Advocate Health Care and NorthShore University HealthSystem.  The case will be appealed to the 7th Circuit.  The actual ruling was not disclosed due to business trade secrets. 

Mercy Health v Aetna

 Mercy has sued Aetna in federal court in St. Louis stating that Aetna has violated a payment agreement.  They say that Aetna sine 2014 has either underpaid or failed to pay for services to newborns in neonatal units at Mercy Hospital St. Louis.  To date that is $3.3 million in outstanding claims underpaid and an additional $833,000 for payments not made.

Los Angeles v Pacifica Hospital of the Valley

The hospital agreed to pay $1 million to settle allegations of patient dumping.  This is the second one of these for the hospital in two years.  The hospital had admitted a patient for 30 days and then sent her by taxi to a nursing facility.  The patient did not check into the nursing home.  She was found wandering the streets. 

Female v Eisenhower Hospital

 An unnamed female has filed suit against Eisenhower Hospital in Palm Dessert, California, and Gil Lopez, a nurse's aide.  The cause is sexual assault.  She states she was under the influence of morphine and was sexually assaulted by Lopez.  She originally called the police from her hospital bed to report the assault.  She then said the sex was consensual.  She was readmitted several months later to the hospital and found Lopez was still working there and filed suit.  

Allstate Insurance v Vizcay
11th Circuit

Florida has a law that requires the medical director of a clinic to review the billings of the clinic.  Allstate sued Dr. Sara Vizcay and the four clinics she owns and the three in which she was the medical director for submitting claims for services never rendered or for amounts greater that the actual value.  The suit was for negligent misrepresentation.  A jury found for Allstate and the three clinics that Vizcay was medical director appealed.  The court found for Allstate on appeal and said although there is no standard for the review the jury was given enough evidence to show that Vizcay id not come close to satisfying it.


Pickett v Olympia Med. Center
Ca Ct App

The patient had an neck injury and had cervical spinal surgery at eh hospital.  The surgeon used a non approved product which the FDA had issued warnings about.  The patient post operatively had severe nerve paid which required secondary surgery.  He sued and the trial court ruled for the hospital.  The appellate court reversed.  The intermediate court ruled the hospital did not tell the patient about the FDA warnings.  The case now continues.

Reyes v Overlake Hospital Medical Center

August de los Reyes, a former Microsoft designer, has ankylosing spondylitis which means he has brittle bones in his spine.  He fell and the next day went to the hospital with abdominal and back pain.  He told the physicians he had the disease and he thought he may have a back fracture.  He had a scan which they said showed no fracture.  In reality it did show a hairline fracture which was not seen.  Later when he returned in severe pain and with tingling waist and legs he had a lumbar and thoracic MRI.  While being positioned for the exam he became unconscious and paralyzed.  He was then transferred to another hospital.  He sued and as part of the settlement he received $20 million and is working with the leaders of the hospital to put processes in place to prevent this from happening again. 

Hardin v DaVita Healthcare

 The suit states that DaVita used a dialysis solution called GranuFlo and it cause heart problems.  The problem with the case is that the attorneys that filed it are the same ones that have filed many of these same cases with no results.

Frankfort Regional Medical Center v Shepherd
Kentucky Supreme Court

 The state high court ruled against the hospital.  The case is a bad baby case and the issue is whether the case manager notes were protected or not.  The manager interviewed all involved immediately post baby death.  the hospital and physicians were sued.  The hospital settled and the physicians wanted the notes.  The hospital said they were protected under the attorney client privilege.  The hospital said the notes were done at the direction of the hospital attorney and the physicians said it was part of the standard root cause analysis.  The high court said the notes were not privileged because the interviews were not obtained for the primary or predominant purpose of obtaining legal advise.  The interviewees were also under the impression that it was done for root cause and not for litigation purposes.

Temple University Hospital v US

The hospital was sued for the negligence of a hired physician and settled.  the hospital then sued the feds as the employer of the physician for indemnity and contribution.  The hospital and the feds signed a physician sharing agreement and the employer received federal funding.  The court ruled for the hospital under common law and allowed the case to continue.  The feds may not continue their relationships with the hospital.            Top 


Whole Women's Health v Texas
US Supreme Court

The high court struck down the Texas rule that physicians doing abortions need hospital privileges and the clinics need to be up to the standards of surgical centers.  In the usual liberal conservative break they said the rule places an undue burden on the rights of women to get abortions.  Per usual they did not follow law but political persuasion.  The three conservative justices would have returned the case to the lower court to tailor a more limited remedy that would have kept part of the rules on the books.  The court then refused to hear similar decisions blocking abortion restriction is Wisconsin and Mississippi.  

Stormans Inc v Wiesman
US Supreme Court

The Supremes have turned down a challenge to Washington state's law the pharmacies dispense emergency contraceptives to women.  It takes four justices to decide to take a case and there are only three conservatives.  The law required that all pharmacies stock the meds and have at least one pharmacist on hand to dispense the pills.  Alioto stated that this decision is a bad sign of how religious liberty claims will be treated in the years ahead.


In a case that will go to the Supremes much later, the case revolves around illegal immigrants usually from Central America who are place in social service arenas.  Many of these are run by the Catholic Church.  The social organizations will not provide access to contraception as it is against their religion but they are being paid by federal funds.  DHS wants to send the immigrants to agencies near relatives but in some cases those will not perform or pay for abortions or other contraception.  All agencies are supposed to provide, according to the suit, medical care including family planning services and emergency health care services.  DHS wants to retain the Catholic organizations but may not be able to.  

Santa Clara University v California Dept. of Managed Care
Dept. Health & Human Services

The Catholic university challenged the state's rule that health insurance plans include coverage for elective abortions.  To no one's surprise the feds went with the state.  The feds said the rule did not violate the Weldon amendment.  This did not apply since the insurers were willing to provide abortion services to others.

Land of Lincoln v US

The startup insurer of Obamacare has sued the feds for again not doing what it is supposed to.  They continue to get sued over the risk corridors and eventually will have to pay major money.  Land of Lincoln is owed $72 million.   

ACLU v New Mexico
New Mexico Supreme Court

The state high court ruled unanimously that terminal ill patients do not have a right to  physician assisted suicide in the state.  They overruled the district court ruling that physicians could not be prosecuted under the state's assisted suicide law.  the law makes helping with suicide a fourth degree felony.     Top 


Patients v ???
To Be Filed

Unknown companies have had their 9,300,000 medical records hacked and 650,000 are available on the deep web.  The hacker was "thedarklord" and is selling a copy of each of the three data bases for about $100,000 to $395,000.  The sale would actually be in bitcoin.  There is one consisting of 48,000 records in Farmington, Missouri.  There is another of about 210,000 patients from central/midwest (Blue Cross).  There is a third of 397,000 from Georgia (Blue Cross Blue Shield).

Patients v Massachusetts General Hospital
To Be filed

About 4300 patients of the hospital had their information compromised after an unauthorized person accessed the information from a third party, Patterson Dental Supply.          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.