June 15, 2010 Recent Legal News
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US v Idaho Orthopedic Society
Settlement
Five physicians and the Society settled with the government over an allegation that they conspired to exact higher prices from workers compensation patients. The settlement admits no wrongdoing but prohibits the defendants from making agreements with competitors on fees and contract terms. The Christian Science Monitor covered the story and stated that Eric Holder told Congress that if physicians refuse to accept government price controls that is price fixing. The Idaho Orthopods did do a group boycott in order to raise prices which is illegal. They also threatened to boycott Blue Cross also for higher prices and again this is illegal. This is the first time the Justice Department and not the FTC has done the settlement. The difference is the FTC is only civil but the Justice is civil or criminal. It has many more tools at its disposal than the FTC.
Mercy Hospital v Aultman Health
Foundation
Ohio Jury Decision
A jury has awarded Mercy Hospital in Canton $6.1 million for Aultman's interference with hospital contracts. The jury found that Aultman engaged in a pattern of corrupt activity by paying insurance brokers. Brokers could ear up to $200 per patient on top of their regular commission. Aultman was using it's non profit funds to fund it's for profit arm that would pay the brokers. Aultman had countersued for libel and other claims and these were rebuffed. Top
US v Warnick
Settlement
Dr. Jamie Warnick, a Decatur, Illinois, Pediatrician pled guilty of theft and turned in her medical license. She obtained free vaccines from the CDC and gave them to children with insurance, which is illegal. She is to be sentenced to three years probation with six months in house confinement, and a repay of $63,500 to the Illinois Department of Public Health.
US v Fu
Sentenced
Dr. Xinming Fu of Santa Ana, California, pled guilty and was sentenced to 30 months in prison and to pay $390,000 in restitution. He is the sixth physician and 17th person guilty of a major fraud and kickbacks accused in 2004 of doing respiratory treatments when not indicated and where not indicated. This closes this long case.
US v Intercare Health Systems
(City of Angels)
Judgment
The feds got a $10 million judgment against the owner of Intercare Health Systems which used to be City of Angels Medical Center for using recruiters who would go to homeless shelters and send people via ambulance to the hospital for treatments not needed. Earlier this year the feds got indictments against the former owners of the Center, Robert Bourseau and Rudra Sabaratnam, who both entered into a consent decree for the same $10 million. Top
Physician Hospitals of America v
US
Filed
The group of physician owned hospitals have sued the government in federal court to overturn Obamacare's ban on Medicare and Medicaid payments to future physician owned hospitals. The suit names two large community hospital associations made a deal to accept lower payments if the Congress would cut off physician owned hospitals.
Golden Gate Restaurant Assn. v San
Francisco
US Supreme Court
The Association sued the City to stop the law that required the restaurants to provide health insurance for their employees. The liberal 9th Circuit ruled in favor of the City and overturned the original verdict. The also denied a rehearing en banc. The Assn. appealed to the Supreme Court. The Assn. believes that ERISA states that the law is unconstitutional. Obama has now petitioned the Supreme Court with a 26 page memo as to why they should not consider the case. They believe Obamacare makes the matter moot. However, it is more likely that the Court may use this case to look at Obamacare and the administration does not want this to occur. Top
Harris v Bradley Memorial Hospital
Connecticut Supreme Ct.
Maybe the tide is turning. After last weeks partial victory by a physician in New York, this case reinstates a physician's suit for damages for peer review. Dr. Harris was summarily suspended from the hospital and sued in trial court. The court ruled for the hospital on a JNOV. This was overturned and the court bifurcated the case. The court ruled for the hospital giving them immunity under HCQIA for the pre-summary suspension activities but ruling for the physician for the post-summary suspension activities. Dr. Harris in 2001 lost on all aspects of the hospital peer review and then sued for damages, injunction putting him back on staff, and damages for tortious interference with contractual relationships and a violation of the Connecticut Unfair Trade Practices Act. The Court stated that the bylaws had been violated since all actions had been by an economic competitor. The competitor lead the investigation, picked all the cases for review as well as imposing a summary suspension after months of review therefore taking out any imminent problem. This made the hospital disqualified for HCQIA immunity.
Richman v Rideout Memorial Hosp
Ca Ct App
The hospital recruited the cardiac surgeon to start a cardiac program at the hospital. They let him go because he pled no contest to a charge of being under the influence of a controlled substance. The surgeon sued the hospital for breach of contract and other matters. He won with the jury but lost to the judge who did grant another trial. On appeal the new trial will be limited to breach of contract. His other accusations were dismissed for a variety of reasons.
Tate v University Med Ctr.
Southern Nevada
9th Circ
Dr. Tate was a surgeon on the staff of the hospital. He had an altercation with a patient's family and was taken off the call roster for the hospital trauma. He sued but the suit was deemed moot since in the interim he was also removed from the staff. This made the removal from the panel of no importance. Dr. Tate has sued on his being removed from the staff but the case has not been heard.
Ramamurthy v JFK Med Ctr
NJ Superior Ct App.
Dr. Ramamurthy had his privileges revoked for not doing a follow-up with a patient pay patient who eventually died. The physician stated he did not get a fair hearing since the hospital deviated from its bylaws. The court said the deviations were minor compared to the total fundamental fairness. Since the physician was allowed to have a lawyer present at the fair hearing, this negated the hospital's errors. How they come up with this stuff is amazing.
Bode v Los Angeles Metro. Med Ctr.
Ca Ct App
In the original trial Bode sued the hospital for suspending her privileges. She won and was awarded attorney fees for the hospital doing a frivolous suit in suspending her. The appellate court overturned the lower court on the attorney fees stating that the original action was not frivolous. However, there may have been malice and this needs to be tried. If there was malice she would be entitled to only the fees for the original trial and not the defense within the hospital.
KD v US
D Del
This district court has ruled that peer review material is privileged under Federal Common Law. This is the first court to so rule. The Court looked at HCQIA and the later Patient Safety and Quality Improvement Act (PSQIA). Top
Patients v Cincinnati Children's
Hospital
To Be Filed
A laptop computer has been stolen again. This one had the information on over 65,000 patients on it. It was password protected but not encrypted. This happened the end of March, 2010. The hospital is offering a one year membership in a theft identity service. Top
Coleman v Children's Home
Healthcare World
To Be Filed
Alicia Coleman was a preemie but died after 15 surgeries at the age of 19 months due to an error at the facility. A medication was inadvertently injected into her jugular catheter. She had seizures and respiratory arrest. She was then transferred to a hospital where she died. Top
California Nurses Assn v
California
Ca Ct App
California had put in a rule that school employees who are not nurses could give insulin shots to diabetic children in school. The union challenged the rule and won in court. This was despite all other medical professionals being on the other side. There needs to be legislation to overturn this ruling. 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.