June 1, 2002 Legal News


Fraud and Abuse




Product Liability

Exclusive Contract

Peer Review

Hospital Liens

Assisted Suicide

Medicaid Can Be Sued


Standley v Memorial Hermann 
Texas Superior Ct.

The family of the patient is suing the local hospital and the system that owns it for wrongful death.  They and their expert claim that the patient received the wrong IV solution.  She should have received a isotonic solution but received a hypotonic solution instead.  This caused a lower sodium which if untreated may lead to death.  The expert believes that patients should ask their physicians regarding the pros and cons of the IV solutions.

Pereira v Largan, et. al.
Fla. Superior Ct.

On the first day of the trial, the defendant physician testified that the bovie used to coagulate blood vessels went haywire.  It malfunctioned and caused a fire leading to severe burns and disfigurement of the patient.  The patient claims that the use of alcohol to clean the skin was not given enough time to evaporate prior to the bovie use.  The alcohol pooled under the towels and caused a third degree burn.       

Sulzer Settlement

About 120 people have opted out of the $1 Billion settlement.  They are taking a chance that Sulzer will have money left over after the settlement and will not be bankrupt.  If any are awarded major damages there probably will be no money for any others.  They should look at the current state of the asbestos suits.  This has put a hold on Sulzer's plans as they try to persuade a group of plaintiffs that need surgery to join the class action.  they are not worried about the other opt outs that do not require surgery.  Most of the plaintiffs are in the Oakland since one busy Orthopod there used alot of the product.

Towse v Thompson

This case discussed earlier in the year was where a physician discharged a narcotic overdose patient from the ED several hours after admission.  The patient died.  In her deposition, the physicians admitted her error and should have kept the patient in the hospital until the drugs were out of the system, at least 24  hours.  The hospital settled the suit but is now suing the physician's employer because she stated she was wrong and the cause of the death.  Thompson continues to work in the ED.  I hope the JCAHO reads this article about telling the truth to patients and how their policy conflicts with reality.   

McCormack v Children's Hospital, Boston
Suit Filed

  The parents of the 13 month old who became severely brain damaged and died due to a screw-up in communications.  She had hydrocephalous and needed an urgent re-drainage procedure.  There was miscommunication between the house staff and the attending neurosurgeon which caused a delay in the surgery overnight. The State has already chastised the physicians and the hospital for the care.  This case will never see a courtroom and will be settled for seven figures.  The hospital has a maximum liability of $20,000 under state law, so was not named.  

Jennings v Palomar Med. Ctr.
Trial Ct.

 A man with a intestinal bladder fistula had a surgical correction.  Following the surgery he continued to have abdominal pain and infection.  An x-ray done 17 days later found a 14 inch retractor still inside the abdomen.  The judge ruled that the plaintiff had not proven causation between the infection and the retractor and also ruled the maximum that could be awarded under the California tort reform was $250,000 for pain and suffering.  He was awarded the $250,000.    

Good Samaritan Case
New Jersey Supreme Court

A mother of a child who died at age three sued the Good Samaritan Hospital and several doctors for complications from an emergency C-Section.  All settled except one doctor who was found 3% liable and appealed stating she was a Good Samaritan.  New Jersey law is silent on whether emergency room  personnel can be protected by the Good Samaritan laws.  The Supreme Court said no.  The laws were only to protect those Good Samaritans on the street, not where there is a fully staffed emergency department. This may pose a problem in New Jersey of having ED physicians come to Codes in other areas of the hospital and be protected under the Good Samaritan laws.      Top

Fraud and Abuse

US v Pfizer (Warner Lambert)

An investigation into the practices of Warner Lambert, now owned by Pfizer, reveals that pharmaceutical representatives were allowed in the examining rooms with patients, allowed to examine patient charts and were allowed to recommend treatments.  This shadowing program was for Neurontin, a anti-epilepsy drug.  The company tracked how much of the drug was prescribed by which physician and those with the highest amounts were hired as consultants and speakers by the company.  The company is also accused of writing first drafts for medical journal publications for physicians.  This is the basis of a whistleblower suit now joined by the government in both civil and criminal charges.  The physicians were paid $350 for each day they allowed the representative to shadow them and involved about 100 physicians in the northeast states.  The actions occurred in the mid 1990s, prior to the acquisition of Warner by Pfizer. Most of the Neurontin prescriptions are written for off label use which is legal.

US v Medical Center Emer. Services 

The physician group will pay $1.6 million to settle false claim charges for improper Medicare claims.  The claims were filed by the billing service, Emergency Physicians Billing Service.  The whistleblower will collect $280,000 in this case.  There have been other cases involving this whistleblower and the billing company.  What this shows is the physician is responsible for the actions of it's agents, the billing companies.    

US v Shaul Debbi, MD

The feds were looking for Dr. Debbi under an arrest warrant after a story in the NY Times described eye surgery performed by Dr. Debbi as possibly unnecessary. The physician has turned himself in to the authorities.  Dr. Debbi in 1999 and 2000 treated many adult home patients.  He did about 50 procedures on patients many of which had never complained of visual symptoms.  

US v Fresenius Medical Care NA

Fresenius has agreed to pay $1.6 million for violations of the False Claims Act. They participated in a clinical trial of Epogen and billed the government for the free medication.  This is another of the whistleblower suits and the bounty was over $280,000. 

Florida v Wolland, MD
Case Filed

Florida has filed a fraud case against Shelley Wolland of Davis, Florida.  The physician has been charged with 115 counts of fraud stemming from her shuttered Sunshine Medical Inc. practice.  She had filed over 2000 claims to Medicaid for services not performed and drugs never given to patients.

US v Seigal, MD 

Dr. Arthur Seigal, a neurologist in Bridgeport, Conn. pled guilty to mail fraud.  He was sentenced to 18 months in prison and is being charged $1800 per month for his room and board and an additional $244 a month for his three years of supervision upon release.  He also must repay $450,000 and a fine of $40,000.  

US v Stuckey, MD

Dr. Valerie Stuckey of Fort Collins Colorado, has been sentenced to 60 days in jail and 8 years of probation for upcoding claims to Medicare and Medicaid.  She also has to pay $26,000 in restitution.

California v Total Remedy and Prescription
CA Bd. Pharmacy

The California Board of Pharmacy has fined a pharmacy $88.7 million for filling prescriptions on line.  The pharmacy filled directly to consumers without a physician examination.  The law requires a "good faith examination by a California licensed physician prior to filling a prescription.  The Board imposed the maximum $25,000 fine for each alleged violation.  This now needs to be approved by the California Medical Board.  The violations were the result of prescriptions written by non California licensed out of state physicians and did not have access to their medical records.

US v Wilcox Memorial Hosp.

Wilcox Hospital on Kauai has been fined $1.5 million for upcoding pneumonia and other diagnosis.  This is another whistleblower suit from a physician in Pennsylvania who has accused over 100 hospitals with fraud.  The US Attorney praised the hospital for their cooperation and that is the reason the fine is so low. 

US v Northwestern Human Services

The nonprofit corporation Northwestern agreed to pay $7.8 million to settle civil charges centered around their "partial hospitalization" program.  The were charging for treatments for people who who too disturbed to get any benefit from the sessions, billed for unnecessary recreational programs, had improperly staffed programs and submitted false records.  There are also two mail fraud criminal charges awaiting them.  Earlier a psychiatrist, Donald Burnstein pled guilty to mail fraud.  This is another of a long line of whistleblower cases.  The whistleblower here got $737,000 so far and may yet get more.   

US v Nelson, MD
Criminal Sentencing

Dr. Ricky Joe Nelson of Okalahoma City was convicted of of prescribing drugs over the internet without examining patients. The doctor was sentenced to 51 months in a federal prison and forfeited $660,000.  Of that money $175,000 is in a frozen account and the remainder will come from the sale of his assets.  His license will also probably be revoked. Top


Wichita Surgical Specialists v Heart Surgeons
Injunction Hearing

Four heart surgeons left the Wichita Surgical Specialists to start their own practice.  Wichita Surgical attempts to enforce a non-compete clause by an injunction.  Three of the heart surgeons were allowed to set up their own shop until a trial scheduled for this fall.  The fourth had a buyout liquidated damage clause and this must be his method of breaking the covenant. This is a payback of 20% of his first years salary.  The judge stated that the three knew what they were doing but keeping the heart surgeons in the community is a matter of public safety.  Wichita Surgical is hoping to hire three other cardiac surgeons and pursue the suit.  Maybe they think these guys grow on trees and can just be plucked when needed.  Since this whole mess was over an outside investment, maybe the group should relook at their policies to prevent this again in the future.     

Eastern Carolina Int. Med v Faidas
NC Ct. App

The Court found that since a non-compete clause did not forbid the practice of medicine it would be not against public policy.  Also a liquidated damage claim was reasonable since it was precise and not a penalty.

Silo v Catholic Healthcare West
CA. Supreme Court

Silo, a file clerk at CHW, was fired for forcing his born again beliefs on others.  He claimed religious discrimination by the Catholic hospital chain.  The trial court awarded Silo minimal damages plus  attorneys fees.  The Court of Appeals affirmed the trial court but the Supreme Court overruled both in a 7-0 vote.  The Supreme Court stated that the hospital could control religious speech in the workplace, even one that is part of a religious organization.  The balance is religious discrimination versus the public policy of allowing religious organizations the ability to hire people that will not interfere with their religious mission. 

Diaz v Riverside Neighborhood Hlth. Ctr.
Fed. Dist. Ct.

In the counter to the above case, a federal jury has awarded a fired nurse $47,000.  She refused to give out the legal "morning after" pill due to religious reasons.  The born again Christian was awarded back pay and emotional damages since her freedom of  speech and freedom of religion were denied.  However, the Center wants the judge to put aside the jury verdict since the nurse was still on probationary status.  She was fired after telling co-workers she would not give the pill and that they were performing abortions.

Loughner v Univ. Pittsburgh
Fed Ct.

A former University of Pittsburgh recruiter has won a $281,000 judgment from the organization for wrongful termination. She also sued for punitive damages but that was settled.  The problem was racial discrimination by the University and not allowing the recruiter to hire black and disabled applicants.    

Piteau v Horanieh
Conn. Superior Ct.

Be careful out there! When is an independent contractor a hospital employee?  When the patient reasonably believes that is the case, under apparent agency.  The patient had surgery and the procedure exceeded the scope of the consent.  The patient sued the physician and the hospital.  The hospital was denied summary judgment since the consent form was the hospitals and presented by hospital personnel, the clothing had the hospital logo, the hospital director sends letters stating the hospital works closely with the patient's physicians in evaluating care and there was nothing in writing anywhere that stated the physicians were not hospital employees.  To trial, says the court.    

Wallace v Methodist Hosp.
US Supreme Ct.

The Supreme Court would not hear a challenge to the lower court ruling in the 5th Circuit.  In that case a nurse sued after termination.  she claimed the hospital terminated her due to taking time off for three pregnancies.  The hospital proved that she was fired for falsification of medical records.  The jury found for the nurse but the trial judge overruled the jury and the 5th Circuit agreed with the judge.       

Koller v Pontiac Osteopathic Hosp.
Mich. Ct. App.

 A nurse claimed constructive termination after complaining multiple times of physician's abusive patient treatment.  She had stated she would go to the authorities about the problem but never did.  The court ruled that the nurse did not make her case since too much time had elapsed between the possible abusive acts and the constructive discharge.

McPherson v HCA HealthONE, LLC
D. Colo

In a interesting sexual harassment suit a nurse sued the hospital for multiple problems with an independent practitioner harassing her.  She claimed he fondled her and grabbed her buttocks.  The court ruled that since there was no employer-employee relationship between them, the hospital could not be liable for quid pro quo relationships.  The court also through out the hostile work environment claim since the harassment only occurred twice and after the hospital became aware of the allegations they did an immediate investigation and requiring the physician to write a letter of apology.  The court also stated that no discipline was needed for them to find the hospital took all reasonable steps. Top


Burrows v Redbud Cmty. Hosp
9th Circ

In the infamous case where a Redbud physician hired by an emergency medicine group sent a dehydrated infant by private car to a hospital 25 miles away.  The infant died en route.  The trial proved that there was a duty between the parties, that there was a breech of the standard of care and an injury.  The real issue was causation and the jury said "no liability".  The court reversed the jury and stated there should be a new trial relating only to causation and damages.  The physician was originally indicted on criminal charges as well but that was politically motivated.     

Bryant v Adventist Health
9th Circ

The 9th Circ. stated a decision that reiterates that hospitals can not be liable under EMTALA for misdiagnosis or negligence. They also stated that stabilization requirement usually ends when the patient is admitted, unless the admission was a ruse to get around the requirement.    Top


Class Action v American Medical Security
Fla. Circ. Ct.

The insurance company raised rated on individuals after they had health related claims.  They raised then to almost $5000 per month.  The company does this tiered rating in 32 states.  The judge stated in group insurance that a class must have their premiums raised not the individual.  The kicker is American is hiding behind a Wisconsin non-profit company, Taxpayers Network, Inc.  Non profit companies can avoid state regulation if they are mainly out of state and their primary purpose isn't insurance.  The penalty phase of the trial will be this summer and American Medical will appeal after that phase.        Top 

Product Liability

Krutz v American Home Products 

Krutz settled his law suit against American Home Products for $10 million.  He took Cordarone for a heart rhythm problem and lost nearly all sight due to the drug.  The major problem for the company was lack of warning.  The warning went out to American physicians nine years after the company warned Canadian physicians.  The company waited until the first case in the US won damages before sending out a warning.  That case was in Oregon and the patient was awarded $20 million in punitive damages.          Top

Exclusive Contract

Shah v Richland Mem. Hosp
SC Ct. Appeal

A trial court stated that the hospital was within it's rights to exclude a physician from x-ray readings and refused to issue a permanent injunction.  The Court of Appeals stated the trial court procedurally erred in not allowing the physician to amend the complaint and on the mootness of the breech of contract.    

Weber v Allegheny General Hospital

Weber and his merry band of 37 anesthesiologists and 65 nurse anesthetists are now looking for a job.  The group had the audacity to confront the hospital by not accepting all the insurance plans the hospital did.  The group decided not to participate in one plan that paid poorly.  The hospital believed that they want all their people to accept all plans and so gave an exclusive contract to a competing group.  Weber had sued Allegheny for interference with business and conspiracy when he tried to get the health plan to pay more money and the hospital attempted to recruit the group's employees for the new group.            Top

Peer Review

Munch v Charlotte Hungerford Hosp
Conn Superior Ct.

In an unusual case, a urologist who tried to do the right thing took it in the ear.  He voluntarily surrendered his ureteroscopy privileges when he found his colleagues were having better results.  This does not mean his results required peer review.  Seven months later he re-thought his decision and reapplied for uteroscopy privileges.  These were denied and he was offered formal peer review protections and then was reported to the NPDB after he did not avail himself of the peer review.  He sued for defamation due to the report and lost since there is immunity for the report.  I don't understand where his attorney was in this process.      Top

 Hospital Liens

California has two diametrically opposed Court of Appeal decisions regarding hospital liens.  In Swanson v St. Johns regional decided on March 5, 2002, the court in an unpublished opinion ruled that under the Hospital Lien Act a hospital could levy a lien on the award of damages to recover the difference between the contract amount and the true charges.  The lien would be against the third party and not the patient.  In McMeans v Scripps decided three weeks later by a different Court of Appeal, in a published verdict ruled that if the hospital collected the amount owed under a contract, they could collect nothing else.  This court also stated the patient and not the tortfeaser is the one who owes the lien, if due.  Following McMeans, the Swanson court allowed its case to be published.  This means the California Supreme Court will need to decide the split.        Top

Assisted Suicide

The Department of Justice is appealing a federal judge's ruling telling Ashcroft to mind his own business.  Oregon has passed twice an assisted suicide law, that has many built in safeguards.  Ashcroft decreed that the law was against the federal law of prescribing narcotics for pain relief, etc. Oregon sued Ashcroft and won in the District Court.  Now the Ninth Circuit will decide and then to the Supreme Court for the second time.        Top

Medicaid Can Be Sued

The federal courts on two occasions have ruled that Medicaid recipients may sue for benefits promised under federal law. The difference in the patient victory in the 6th Circuit is they sued the individual state officials.  The Court stated that immunity does not hold for these individuals.  The Court stated that if the states did not want to follow the federal rules, they did not have to get federal funding and done its own thing.        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.