May 15, 2015 Recent Legal News






Peer Review and




US v White

Joe White, the former CFO of Shelby Regional Medical Center, was ordered to pay $4.4 million in restitution for lying that he had attested to meaningful use and therefore was responsible for the hospital being paid $17 million it was not entitled to.  

US v Kapowitz

Dr. Barry Kapowitz of Aventura , Florida, had been convicted of making false statements to allow patients at a psychiatric hospital he was the Medical Director receive higher payments.  He was sentenced to 60 months in prison.  He is also to pay $2.9 million in restitution.  

US v Sharma
5th Circuit

Drs. Anun and Kiran Sharma operated clinics that gave out prescriptions for painkillers and shots.  They pled guilty to defrauding Medicare for billing for injections they never gave and for upcoding.  They were given prison and ordered to  repay $43. million.  They appealed after paying $321 million stating the amount did not take into account the legitimate claims.  The 5th Circuit agreed and sent the case back for recalculation.  The feds said $37.6 was legitimate.  The Sharma again appealed.  The 5th Circuit this time agreed with the lower court.  


HMA agreed to pay 15.7 million to settle claims of billing for psychiatric services not medically reasonable or necessary.  There was no admission of liability.

US v Accredo

Accredo Pharmaceutical agreed to pay $45,060,598.87 to the feds and another $14,939,401.13 to a group of states for its part in a kickback scheme with Novartis Pharmaceutical.  Novaritis provided kickbacks with patient referrals and other benefits for Accredo recommending refills of Exjade.  

US v Hospitals in Florida

Nine Florida hospitals, four owned by HCA, four by Baptist and the University of Florida collectively agreed to pay the feds $7.5 million to settle allegations of illegal ambulance rides.  The feds assert that the hospitals used ambulances to ferry able body patients to and from their facilities costing the taxpayers millions of dollars.

US v Hamoudi

Dr. Walld Hamoudi and Geraldine Caroline both of Houston, Texas were indicted for healthcare fraud.  They allegedly participated in a scheme where Harmoudi paid Caroline to send patients to his hospital from the nursing home where she is the owner.  They also allegedly participated in a false partial hospitalization program.  These services were either never provided or were medically unnecessary.  

US v Qin

Dr. Feng Qin and the Matoo and Bhat Medical Associates have pled guilty of fraud and were fined a total of $1,150,000 for false billing.  The Associates are to pay $1 million and Dr. Qin to pay the rest.  Dr. Qin did routine fistulagrams on dialysis patients and interventions without medical necessity.  

US v DeSimone

Drs. Eugene DeSimone of Eastontown, New Jersey and Franz Goyzueta of New York were each sentenced to 37 months in prison for accepting bribes in the New Jersey Biodiagnostic Lab fiasco.  They also both got one year of supervised release.  DeSimone was fined $5000 and forfeit $260,500.  Goyzueta was fined $75,000 and must forfeit $72,000.

US v Molina

Dr. Hector Molina of Irving, Texas, and his employee Blanca Mata have been indicted for health care fraud.  The indictment alleges that Molina billed for services provided by Mata as if Molina provided them.

Virginia Mason Medical Center v Olympus

The Center is suing along with a family the manufacturer of the duodenoscopes for fraud.  They state that they have meticulously followed the instructions issued by Olympus in the cleaning and sterilization of the scopes but still had an outbreak of infections.  Olympus knew about the problem earlier in 2013 but did not disclose the problem in the US until after the LA Times reported the infections at UCLA.

US v Bay Sleep Clinic

The feds have joined a whistleblower suit against the Clinic and Anooshiravan Mostowfipour and Tara Nader, the owners of Qualium Corporation and Amerimed.  The former is the owner of the 16 sleep clinics and the latter is the company that sells the DME.  Teh suit alleges the clinics did the sleep tests at unapproved locations and with unapproved personnel.


CVS has agreed to pay $22 million for allowing employees at two stores in Sanford, Florida to distribute controlled substances illegally.       

US v Westchester Medical Center

The hospital has agreed to pay $19 million to settle charges that it paid kickbacks and billed Medicare illegally.  The helped to open and then retained a financial interest in a cardiology practice to help build its program.       Top 


Los Angeles v Gardens Regional Hospital and Medical Center

The City Attorney filed a claim against the hospital for illegal patient dumping.  Patients have been found wandering on skid row who have been taken from the hospital to the area and let loose.  There has been no discharge planning, just dumping.  The hospital records show the patients were sent home on discharge.  

Patients v Hospitals
Filed and To Be Filed

The FDA has revealed that there have been 142 cases of duodenoscopes causing possible patient infections since 2010.  This may not be accurate since one report may cover many patients.  This is a problem for not only the hospitals where the procedures were done but also for the manufacturers, Olympus and Pentax.  The FDA continues not to issue a recall since the benefit of ERCP outweighs the potential harm from the infections.  There are also potential problems with the reprocessors, the machines used for sterilizing the scopes          Top


Patients v Partners Healthcare
To Be Filed

Hackers go into the patient files of Partners Healthcare and accessed the medical and personal information including  Social Security Numbers on about 3300 patients.  The idiots at Partners responded to phishing emails and allowed unauthorized access.  This was discovered last November and they have now done their due diligence which should have been done prior.  Another example of the problem with EHR and the use of hospitals as custodians of those electronic files.

US v Cornell Pharmacy

In a show of what could happen to all the little guys the feds have extracted a $125,000 settlement from the single pharmacy.  The single location pharmacy in Denver, Colorado, screwed up the disposal of documents.  A local news outlet found out and fingered them to the feds.  The feds found that the pharmacy had no written policies and procedures as required by HIPAA.    

Patients v UPMC
To Be Filed

 Hospitals continue to screw up.  UPMC did it by not having safeguards in place to prevent theft by employees of it and its subsidies.  An employee of Medical Management, a third party biller for the medical group, stole patient information over a two year period and told the information to others.  The employee was fired and the hospital was sorry for screwing up.  They say they will get better but they won't.   Top


Tri State Advanced Surgery V Health Choice 
ED Ark

The plaintiffs, including two surgeons, state that the physician-hospital organization violated the Sherman Act by sending letters to surgeons demanding that they attest that they would no longer refer patients to the out of network ASC and would sent patients to the in network hospital.  The two surgeons refused and were terminated from the network.  The court said the complaint did not state a relevant market and therefore the suit has been summarily dismissed.        Top


Gallo v Conemaugh Health 
Pa Superior Ct

The patient's estate sued following the patient's death after a toe amputation.  The suit alleged the anesthesiologist was impaired at the time of surgery.  The pre surgery evaluation had no physical exam, cardiac eval or pulmonary eval.  The 89 year old's estate requested the release of the anesthesiologist's personal drug treatment records.  He had a history of alcohol abuse.  The lower court allowed the records to be discovered since the physician had waived the privilege by stating in a court filing he was not under the influence at the time of treatment.  The appellate court reversed stating the physician did not waive by answering and there was no exemption to the privilege in the state law.

Krusac v Covenant Medical Center
Michigan Supreme Court

A patient's estate sued the hospital following a fall and death of a patient after a cardiac cath.  A nurse who was present at the time wrote an incident report and gave it to her supervisor.  The estate wants the report or at least the factual information in the report.  The trial court after an en camera exam ordered the hospital to release the first page with the facts.  The hospital appealed.  The court agreed with the hospital and said incident reports are protected including the facts  as there is no exception in the peer review law.  They say, I think erroneously, that the incident report is collected for or by a peer review committee.  

Patients v Duke University

Eight families have settled a claim against Duke for an undisclosed amount.  This relates to the fraudulent research done by the then Duke researcher Anil Potti.  He made the erroneous clam that he had discovered genetic markers in tumors that would say which therapies would work well in the individual patient.    The settlement covers all participants.

Hall v Flannery
SD Ill

The Court ruled that neither Missouri's nor Illinois' laws would protect the EMR audit trail of who viewed the patient record and when.  The plaintiff wanted the information to determine if the record had been compromised by the hospital, Cardinal Glennon Children's.  The court stated that a peer review committee did not generate the data and it was done in the normal course of business.  The audit trail and the metadata is part of the medical record and discoverable.  

Larkin v Dedham Medical Associates

A jury awarded a woman $35.4 million, yep you read that right,  for having a stroke hours after she gave birth.  According to the plaintiff she had dizzy spells in 2004 after running the Boston Marathon.  She was seen by Dr. Jehane Johnston who they state did not put her name on a special patient list as required for people with brain abnormalities found on MRI.  Four years later Larkin became pregnant and did not have a C-Section that may have prevented the stroke.  She now requires total care.   Wit interest the award amounts to over $41 million.  the Larkins have been paying over $200,000 per year out of pocket for her care.

Mackay v Sarroca
Ill App Ct

The patient presented to the ED with a 6 mm stone.  The patient was seen by the ED physician who called Dr. Sarroca, a urologist.  Dr. Sarroca prescribed a medication to help pass the stone and order a follow-up appointment in two days.  Several days later the patient went into septic shock with organ failure and renal failure.  Sarroca claimed the case was not timely and he had no duty of care.  The claim was timely filed said the appellate court since the patient did not know about the urologist until a deposition of the ED physician.  The court went on to address the duty of care.  They said the ordering of medication and his on call status gave him a duty of care and therefore liability.  The case was remanded for trial.  

Nayyar v Oakwood Healthcare

Bimia Nayyar received $21 million after dying 6o days on life support 60 days after wrong site surgery.  She was supposed to get a jaw surgery but got brain surgery instead.  The patient in 2012 went to surgery but had the wrong patient's x-rays and got five burr holes and a removal of part of her skull along with some "Poking around in her brain".  The hospital did not admit the error nor did it report the error as required by law.  The hospital wanted the award capped at $400,000 since "no harm was done to the patient".  The plaintiff's attorney is pushing for a criminal charge as well since he claims the hospital falsified the patient's medical records.    

Soldiers v KBR
9th Circuit

The 9th Circuit finally made a good decision.  They find that the lower court's award of money to soldiers from Oregon for injuries while in Iraq invalid for lack of jurisdiction.  The case needs to be transferred to another jurisdiction.      Top

Peer Review and Employment

The following cases continue to show some physicians not only should be terminated from the hospital but do not have the common sense not to waste money suing.

McKee v St. Paul Eye Clinic
Minn Ct App

Dr. McKee sued the clinic after his termination for disruptive conduct secondary to angry outbursts at colleagues and patients.  He erroneously thought the majority shareholders owed him, a minority shareholder, a fiduciary duty to not fire him without a through investigation.  In fact, he was an at will employee who could be fired without cause.  The Clinic showed cause as well.  The trial and appellate court agreed with the Clinic in all aspects.  In poker parlance, You have to know when to hold em and when to fold em.  

Geisinger Clinic v Radziewicz
Penn Superior Ct.

Tehre was a contract between the physician and the clinic stating he was not to practice within a 15 mile radius for two years if he left the Clinic.  He left the Clinic and was employed by another.  He worked for 18 months for the other clinic outside the 15 mile radius and was then transferred to within the radius.  Geisinger then sued to enforce the contract by injunction.  The trial court ruled for the physician The Superior Court ruled for the Clinic stating the contract was valid and the Clinic was likely to prevail at trail.

Ashkenazi v Broward Hospital District
11th Circuit

The surgeon had his privileges revoked and he was reported to the Florida Medical Board.  He was a independent contractor who provided ED services to several hospitals within the district.  He then sued for age discrimination in the federal courts.  They were largely dismissed since he was an independent contractor.  He appealed stating there was an issue of material fact as to whether he was employed or not.  The court quickly dispensed with this fallacy.  Never should have been litigated in the first place.

Ass'n for Disabled Ams. v Reinfeld Anderson Family, Ltd
SD Fla

Although not an employment case per se, I have elected to place it here.  A former patient who was wheelchair bound sued the physician under the ADA.  He stated the office was not ADA accessible seeking a permanent injunction to make his office ADA compliant. After he filed suit the patient was terminated from the practice of the physician for a conflict of interest.  The patient then amended his suit for retaliation under the ADA.   The court ruled against the motion to dismiss since there was a patient physician relationship at the time of the filing.  The patient also properly pled retaliation.  Discovery will be fothcoming.

Whitney v Franklin General Hosp
ND Iowa

Whitney was a medical record receptionist at the hospital.  She was terminated and sued for sexual harassment, retaliation and discrimination.  She states that between 2006 and 2009 she was sexually harassed by a medical director who was fired for sexual harassment of eight other females in 2012.  She  had taken many FMLA leaves during that time but never reported sexual harassment.  After her most recent leave she requested and received a reduced schedule due to anxiety.  She was eventually terminated.  The court granted summary judgment for the hospital on the sexual harassment but not on the other issues.  She had presented enough evidence to create a dispute over fact regarding her retaliation for FMLA discrimination.

Mullen v Chester Community Hospital

If there was a contest for the dumbest hospital or hospital attorney this may win.  A nurse with Lupus felt faint .  She was ut in a bed and given IV fluids without a physician order.  She says she did not have an opportunity to deny the treatment and that it was afoul of the hospital's own protocol.  The hospital investigated and found against her and then terminated her.  The day she asked for information to file a suit against the hospital they reported her to the state nursing board.  The court ruled against the hospital i summary judgment.  Think the retaliation may hold?

McCard v HCA
Tenn Ct App

The surgeon had his privileges terminated for having more spinal hardware removed than his peers.  He sued for the usual and then refused to participate in the peer review hearing where he was found guilty.  The trial court ruled aganst the surgeon on all counts.  The court of appeal agreed with the dismissal of the breach of contract stuff.  They then said the hospital was entitled to summary judgment on the other claims but for a different reason than the trial court.  In the end the surgeon still lost on all claims on summary judgment.

Valfer v Evanston Nortwest Healthcare
Ill App Ct

The physician lost his privileges and sued for breach of contract.  The court found that 50% of is cases lacked surgical indication. The hospital defended by invoking HCQIA.  The surgeon said there was no immunity since there was willful and wanton acts.  The court of appeal said the physician failed to prove the charge of willful and wanton and therefore loses.

Mansour v Stat4e Medical Board
Ohio Ct App

Back after a one month hiatus the court of appeal the court of appeal finally agreed with the physician that the board was wrong.  The Board attempted to not let the physician get his own answers to questions which he an absolute right to  They did not act with good probative evidence.  The physician got his license back.

Murphy v Oregon Board Medicine
Or Ct App

In another return case and another win for a physician the courts against found the board did not act reasonably when the physician lost his license for having one or two drinks while on call.  He was never told that this would be an offense that would cost him his license.  He got his license back.

Fitzgibbons v Integrated Health
Ca Ct App

Occasionally the physician wins.  In this case Dr. Michael Fitzgibbons won a $5.7 million judgment against the idiot hospital CEO that planted a gun in his car to attempt to discredit him.  The jury had made the award but the judge tossed it saying the hospital could not be liable for the action of Western Medical Hospital CEO who planted the gun.  This was to silence critics of the purchase of the hospital by Integrated.  The Court of Appeal disagreed saying the evidence showed that the chief did it while acting in the scope of his employment.         Top 


Connecticut v United Health

I did not realize this case was still active.  About a decade ago multiple medical societies filed suit against the insurers for their fraudulent use of the method of paying physicians.  The insurance companies settled and paid millions to the societies.  Apparently Connecticut did not settle and neither did New York, North Carolina and Tennessee.  This settlement states that United will pay $9 million to correct its faulty web site.  Money will be paid to Connecticut, New York and Tennessee Medical Societies to set up Advisory Councils to resolve problems with the insurer.      

Andre v Anthem Blue Cross

 Shima Andre sued the insurer after she received a denial letter for treatment with Havoni, the hepatitis pill.  The insurer said even though she has hepatitis C she does not have severe enough liver damage to warrant the expensive drug.  She says the it is not right to wait until one gets sicker before getting cured.  Anthem did not respond.  The insurer is accused of breach of contract, emotional distress and unfair business practices.    Top


This is the section where I report cases that do not fit into other areas.

US v Doe
No Penalty

An unnamed US Navy Nurse refused to force feed prisoners at Guantanamo Bay was facing administrative discharge.  He has since been let loose and re-assigned. He has been in the Navy for 18 years.   

Burbella v Misericordia University

Jennifer Burbella was a nursing student at the university.  She flunked a test twice she contends due to the University not allowing her extra time to take her exams.  She states she had anxiety, depression and stress.  I am glad she is not a nurse caring for me.   

California v Crowe

Dr. Ellen Crowe and her husband and practice manager Paul McQuillin of Venice, California, were arrested in connection with the death of a patient.  He is accused of injecting the patient with morphine and she died two days later.  He has no medical training and she was out of town when the injection occurred.  The morphine was prescribed by a different physician.     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.