May 1, 2012 Recent Legal News




Peer Review and Employment



US v Pirouzkar
Guilty and Sentenced

Dr. Behrouz Pirouzkar, an ophthalmologist in Washington, pled guilty to Medicaid fraud for billing for services never received.  He was sentenced to community service and payment of $52,109.   He was convicted on First Degree Attempted False Identity charges and Medicaid False Statements.

Wisconsin v Thomas

Six individuals in Wisconsin were owners of medical supply houses and were convicted of billing for medical devices never received.  All pled guilty and a seventh had pled guilty the month prior.  Sentencing is scheduled for June.

Arkansas v Johnson and Johnson, Inc

A jury found J & J guilty of misleading physicians about the risks of Risperdal.  Each of the 238,000 violations carried a $5000 fine making the total $1.1 Billion.  The company has asked for a new trial or will appeal.  It eventually will be settled for much less than the total. 

US v Walgreen's Drugs

Walgreen wanted people to switch their prescriptions to their pharmacies.  They induced people with $25 gift cards.  This is against the federal laws.  The drug store will pay a fine of $7.9 million.  It is always mindboggling that industries that should know the law, don't.    

US v McKesson

McKesson Corporation agreed to pay the feds $190 million to settle allegations that they inflated prescription drug prices.  They apparently marked up the average wholesale price of the drugs by 25% over the true average wholesale prices.      Top


Patients v Memorial Healthcare System
To Be Filed

The five Memorial hospitals in Florida had almost 10,000 patient identities stolen and possibly misused to get false IRS rebates.  The identities were stolen by employees of the hospital.  The system is giving free credit monitoring but they will pay more if any identities were used.  They would be directly responsible for all losses and possibly all costs and fees as well.

US v Phoenix Cardiac Surgery, PC

The physician group used the internet to schedule appointments and surgery  that was publicly accessible.  Stupid!  They had to pay $100,000 and now do all the HIPAA things they should have done earlier.   

Patients v Emory University Hospital
To Be Filed

The hospital has lost the computer discs with the medical information on 315,000 patients.  As usual the discs were not stored according to protocol.  The hospital does not know if they were stolen or misplaced.  Again, the beauty of electronics for bureaucrats and not patient care.

Patients v St. Joseph Hospital of Stockton
To Be Filed

For something new and rare, paper medical records stored offsite by the hospital were stolen in a warehouse break in.  The thieves knew what they were doing as the records had the patient's identifying information including social security numbers. At least one person quickly had an attempted credit card opening.  About 700 patient records were stolen.  The first discovery was on February 2 and another box of files was found missing in mid March.         Top


Eden Hospital v San Leandro Hospital
California Supreme Court

The California high court refused to hear the case and let the lower court ruling that Sutter Health could purchase San Leando Hospital and turn it into a nursing home.  This would close the ED and make patients drive slightly father to Eden Hospital for care.        Top

Peer Review and Employment

Hebron v Shinseki
D Ariz

Dr. Hebron was a staff radiologist at a VA hospital.  He had a high misread percentage on CT scans.  After retraining the percentage dropped from 31% to 13%.  He had a reduction in pay and a reduction in CT privileges.  He sued under the ADA for age discrimination.  He showed that he was treated differently than one 6.5 years younger and this was enough to allow the case to go forward.  

Osuagwu v Gila Regional Med Ctr.

Dr. Osuagwu was contracted with the hospital to do OB/GYN.  He had his laproscopic privileges summarily suspended when there was no immediate risk to patients.  His charts including those outside of the ones originally reviewed were peer reviewed and all his privileges were permanently suspended without explanation.  The physician then had a "fair" hearing where the CMO was the prosecutor, hearing officer and accuser.  The committee recommended restoration of most of the privileges with some retraining in laproscopic procedures. The MEC continued the original removal of the GYN privileges plus the OB privileges.  The Board went along with this and to nobodies surprise the physician sued for damages and injunctive relief.  The court did not allow HCQIA protection for the hospital or any physician that took place in the illegal process since it screwed up so badly in all four of the HCQIA processes.  It allowed the defamation charge against the hospital for the NPDB report that was false.  Where was the attorney for the medical staff here?  He or she needs to be fired as does the CMO.  The case will now go to trial and the hospital will lose not only a significant amount of money but all credibility in the community.  The best thing that the hospital should do now is reinstate the physician with full privileges except for some laprocopic ones and remove the report from the data bank.  They should also pay his attorney fees and his damages to date.   

Medei v St. Joseph Medical Center

The defamation suit against the hospital was dismissed by the court.  Dr. Medei resigned from the staff of the hospital after there were questions raised regarding his use of cardiac stents.  The hospital then sent letters to 600 of his patients stating they may have had stents put in for no reason.  Dr. Medei then could not get another position and had his medical license revoked.  He sued and that case is still pending.  

Bocobo v Radiology Consultants of S. Jersey
3rd Circuit    

There are times I do not understand the mentality of my fellow physicians and the attorneys that agree to defend them when there is so obviously no case.  Dr. Bocobo was an employee of a radiology group.  The group had a contract with the hospital that stated if a physician was not employed by the group they would lose their hospital privileges.  Dr. Bocobo apparently had a reputation for inaccessibility as well as poor interpersonal skills.  He was not rehired by the group when a new contract was formed with the hospital system.  He sued for antitrust, breach of contract and going against public policy for his losing privileges.  He, of course, lost all the above.  He had gotten a new job within two weeks of losing his old one which immediately negated the antitrust cause.  His other complaints he had agreed to in his original contract. I always wonder why an attorney would take a case like this.  I hope it is not just for the money. 

Psychologists v Great Falls Clinic
Montana Supreme Court

The State Supreme Court ruled that the contract signed by the psychologists and that used the term the practice of medicine in the context of noncompete agreements clearly meant psychologists as well as physicians.        Top


Mid Town Surgical v BCBS
SD Texas

In a motion for summary judgment the physicians sued the insurer for $12 million for services rendered but not paid for.  The physicians were not contracted to the insurer but had permission for the procedures performed.  They sued on ten counts.  The court allowed eight to go forward including all the big ones.  This could be a huge verdict if interest and penalties are added along with attorney fees and costs.        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.