November 1, 2002 Legal News




On Call


Fraud & Abuse





Peer Review

Exclusive Contracts



London v Kaiser

Kaiser Sacramento needs to pay $2.25 million for not following through on blood sugar tests on a newborn.  This led to permanent blindness and seizures.  The newborn was large at over 10 pounds and therefore his blood was tested for glucose which came back low.  the parents were not told of the consequences of the low blood sugar.     

Greenwell v John Muir Hospital
CA Superior Ct.

In somewhat of an unusual case an OB was found not liable and the hospital was found totally liable for an injury during the birthing process.  The premier newborn malpractice attorney in California won $59 million for the now three year old.  In California this equates to a current cost of $7.85 million.  Since the patient is a minor the Court will supervise the investment of the money.  The facts were the mother developed high blood pressure in the hospital and the nurses did not call the OB and did not believe she had hypertension even after the OB ordered the medication for treatment.  There was also problems with nurse supervision and training in reading fetal monitoring strips.  The child has cerebral palsy but is cognitively normal. The judgment was $49 million for future medical care, $6.4 million for loss of future earnings, $100,000 for pain and suffering (California has a $250,000 cap on this), and $200,000 to each parent for emotional distress.  The hospital has asked for a new trial.        

Hayes v Courtney
Mo. Superior Ct.

This is the first case against Courtney who admitted to diluting chemotherapy drugs.  The jury awarded $2.2 Billion in this case.  The plaintiff will not see any of the money since all Courtney's assets had been seized by the government. 

Strange v University of Maryland
Superior Ct.

  A jury awarded $10 million to the family of a 19 year old that died.  He had thrombotic thrombocytopenic purpura or TPP.  He died about six weeks later of the disease that can be cured if the proper treatment is given.  The jury was out only 30 minutes before reaching the verdict.  The amount to be paid will be reduced to the statutory limits for pain and suffering.

Carey v Kawaja
MD Superior Ct.

A jury awarded Carey $8 million for ignoring a benign tumor in her nose that turned malignant and spread.  Kawaja did not refer the patient until the tumor began to grow out of her nose.  She has needed multiple surgeries and has lost part of her face and one eye to date.  Carey will get about $1-$2 million of the judgment due to the state's malpractice cap.     

Payne v Portland Tissue Bank
Superior Ct. Oregon

 Payne received a tendon transplant and then was found to be positive for Hepatitis C.  He is now suing all parties in the chain of the tendon used in a knee reconstruction for failure to test the tendon adequately for Hepatitis.  His wife is also suing since she is in danger of contracting the disease. 

Roach v Mail Handlers Plan
9th Circ

 Roach, a firefighter, covered under the Federal Employees Health Benefits Plan which requires a authorization for any hospital stay over 24 hours.  She called for direction as to where to go after injuring her ankle.  The nurse told her to put ice on it and see her physician if it wasn't better in several weeks.  When she visited the doctor two months later she found she had an displaced fracture that required surgery.  She sued the Plan for malpractice and had the case moved to Federal Court where it was dismissed.  The 9th Circuit overruled stating the state court malpractice claim was not preempted by federal law since it was a malpractice and not denial of benefits claim.

Hoehn v United States

 Wiscott, a cancer patient at Walter Reed, was given a chemotherapy treatment and then allowed to drive home.  She blacked out and ran into another car severely injuring Hoehm.  Hoehn sued Walter Reed, United States, for malpractice for allowing Wiscott to drive herself.  Believe it or not the court ruled for Walter Reed.  They stated that there is no duty to unidentified third parties and that a medicated individual is not a class of person to whom the tendency to act injuriously is normal.  

Upland Anesthesia v Doctor's Co.
CA Ct. App.

The court ruled that a malpractice insurer is not liable for the defense of a defendant who performed an intentional tort.  Upland had been sued for intentionally withholding anesthesia from indigent women.  The contract specifically excluded coverage for intentional actions even if such activities are related to rendering or failing to render professional services.        Top


Kersten v Dental Bd of California
Ca Ct. App.

Kersten required the office dental staff to sign contracts that they were independent contractors.  He then no longer withheld taxes.  He spent 27 months in jail and then reopened his practice.  The Dentistry Board initiated actions against him and he was sentenced by an ALJ to 45 days actual suspension and revoked but stayed his license.  The Board adopted the ALJs conclusions.  The rationale was that the running of an office was an essential part of the practice of dentistry and therefore fell under the Department's jurisdiction.         Top 

Peer Review

Singh v Blue Cross/Shield of Mass
1st Circ.

Singh was not allowed to participate in a new product line due to past practice patterns.  He appealed and had two independent reviews of his practice that showed him to be under the standard of care.  The Blues wanted to remove him from all panels but a due process hearing said it was not warranted.  Singh then sued but lost due to the protection of peer review panels by HCQIA as well as on the merits.  The court stated that since the review panel believed Singh was potentially harmful to patients they could keep him off the panels.  The Court also stated that the is a nexus between unnecessary testing and quality of care.        Top


Ulrich v San Francisco
9th Circ

Dr. Ulrich was constructively removed from Lagunda Honda Hospital for complaining about the conditions at the city run hospital. He had resigned in protest to the cuts at the hospital and then was not allowed to reapply and then was investigated for quality of care. The lack of the ability to get his job back triggered a report to the NPDB for his resignation under investigation.   He sued the city for not giving him his job back and the 9th Circuit agreed that he was only doing his free speech.  The court stated the lower court should allow Ulrich's case to go forward.

Smith v Columbia, HCA
Olympia, Washington Superior Ct.

Dr. Smith, a radiologist at a HCA hospital since 1997 when his group sold to HCA.  The contract had a non-compete clause and Smith is now attempting to open a practice in the county that is restricted.  The problem is the length of the non-compete clause.  Smith states it was only for five years and HCA states it lasts as long as HCA owns the practice, which may be indefinitely.  The judge will decide. 

Schultz v Christ Hospital

In one year Schultz went from the most outstanding employee to being fired for taking family leave to care for his parents.  He won $10.75 million in damages against the parent company, Advocate Health and $450,000 from each of two supervisors.  He may still win back pay. 

Oncology & Hematology Assoc v Community Hospital
Indiana Superior Ct.

A breach of contract suit was filed by the physicians for discontinuing a five year contract after two years. They wanted to work with two other oncology groups instead of the exclusive contract it had with Oncology Assoc.  Since they were told they were going to lose the contract the doctors build offices and radiation facilities outside the hospital.  the hospital now wants an equity stake as part of the restrictive covenant. Strange bed-fellows.  


Planned Parenthood of Iowa v Buena Vista County
Iowa Supreme Court

The Court has been asked to dismiss the suit by the County DA due to fiscal constraints.  The DA had subpoenaed all medical information on women going to Planned Parenthood at a certain time due to the possibility that one of them may have abandoned a dead baby.  

In re Grand Jury Investigation 
Superior Ct. New York  

A DA issued a subpoena to multiple hospitals looking for an assailant.  The subpoena asked each hospital to give up the records of any male Caucasian who was seen for a stab wound on a particular date.  The court quashed the subpoena since it required a medical determination and medical skill to comply.  This is against the physician-patient relationship and privilege.         Top

On Call

Weaver v Carilion Health
VA Superior Ct.

Two neurosurgeons, Weaver and Vascik, are suing the health system to be relieved of their on-call duty.  They want their privileges reduced to only spine cases which would free them from the ED duty of general neurosurgery.  Carilion has refused since it would leave it with only one neurosurgeon to take call.  The hospital has obviously never heard of the rule that all specialties need to be covered 24/7.  They could make arrangements for patient transfer but this may cost them money.        Top


A Federal judge has dismissed the lawsuit against Purdue Pharma for the death due to overdose of the drug.  The plaintiff stated they did not have enough of a case to go forward.  Many more cases are pending.        Top

Fraud & Abuse

US v Seven Hospitals

In the continuing case of a whistleblower cardiac salesperson, seven more hospitals have settled fraud charges with the government for billing Medicare for using experimental medical devices.  The hospitals are Beth Israel Deaconess and New England Deaconess for $3.2 million, LDS Hospital Utah $850,000, General Hospital Passaic NJ $760,000, Hackensack University Medical Center $314,000, Daniel Freeman in Los Angeles $250,000, Good Samaritan in Santa Clara CA for $115,000.  This now makes 29 hospitals that have settled in a group of 100 hospitals.  To date the government has collected $40 million.  Three new hospitals have been sued.  

Roger Williams Hospital in Providence RI has paid $400,000 to settle a case by the government for altering diagnosis to increase revenue. 

Ohio has been told by the FTC that their proposal to allow doctors to join forces for negotiation is price fixing.  The physicians were obviously in favor of the bill and the insurers against.

US v Al Schalchi

Dr. Hareth Al Schalchi and his father Dr. Nahah Al Schalchi were accused of fraud of seeing patients when they were not available.  They settled the case by the father paying $563,000 and the son kicked out of Medicare for ten years.



Conlan v Bonta
CA CT App.

The Court of Appeal overturned a lower court in a case involving the reimbursement of Medicaid money that  the patient paid out of pocket while waiting for Medicaid to take effect.  In this case the providers did not return money to the patient since they were not reimbursed by Medicaid for the services rendered.  In one case the provider refused to bill Medicaid for the money.  California has no regulatory scheme for the patient to request and obtain money from Medicaid paid to the provider.  This ruling orders the state to put in rules and regs to allow the patient to ask for and receive money directly from Medicaid when the provider does not return the money.  The provider does not have to return money for services not paid by Medicaid nor do they need to appeal any adverse decisions on behalf of the patient.        Top  


Ross v Raging Wire Telecom, Inc.
CA Superior Ct.

Ross, a patient prescribed Marijuana und Proposition 215 for a back injury, was fired for failing a mandatory drug screen on hiring.  Ross had given the prescription to the testers prior to taking the test.  After the test came back positive Ross was let go only due to the test results.  The question for the court will be does a company have the right to fire a person using legally prescribed marijuana?  It will be interesting. 

Confant v Walters
9th Circ

In a case where multiple physicians were the plaintiffs, the 9th Circuit agreed that the giving of information about the use of marijuana is protected speech and the physicians can not be gagged.  The government had threatened to strip any physician of their DEA license but this overturns that doctrine.  The vote was 3-0.  The government may yet challenge the verdict.        Top


St. Anthony Hosp. v DHS
10th Circ.

A trauma patient was taken to Shawnee Hospital and transfer attempted due the inability of Shawnee to take care of a life threatening problem.  St. Anthony refused the transfer. A PRO hearing was held for an EMTALA violation and Shawnee but not St. Anthony were invited to attend.  Afterwards, St. Anthony was hit with a $50,000 fine.  They appealed and even though they were not a participant in the PRO hearing, St. Anthony made no showing that the hearing would have made any difference to the fine.

Mazurkiewiewicz v Doylestown Hospital

In what I believe is an erroneous ruling, the court ruled that the patient, an inpatient, who was discharged after six days was entitled to sue for EMTALA and malpractice since he required surgery at another hospital the day of discharge. The court allowed the EMTALA claim even though the cause of the patient's problem was not diagnosed.  There was an emergency medical condition and the patient was discharged without stabilization.  This should be overturned by the Circuit Court since their determination of a medical emergency condition was based on what happened later, not when in the hospital.          Top

Exclusive Contracts

Brock v St. Joseph Hospital 
Tampa Fla. Superior Ct.

Three cardiac surgeons have sued Tampa Hospital for lack of due process.  They had their cardiac surgery privileges taken away due to an exclusive contract with another physician.  They continue to hold vascular and chest privileges at the hospital. This arrangement is common in the practice of cardiac surgery throughout the country.        Top


Alabama v Southern Health
Superior Ct.

Alabama's Insurance Commissioner has accused the executives, board members and outside auditors for Southern Health defrauded and embezzled the public for 1 1/2 year prior to the HMO going out of business.  The company left over $10 million in unpaid claims but paid for Las Vegas junkets and many other perks.  The State believes the misappropriation led directly to the closure of the business.        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.