November 1, 2003 Recent Legal News

PPO Fees

HMO Problems

Peer Review

Joke Gone Awry

Medical Marijuana


Elder Abuse

Fraud and Abuse



State Pays HMO


PPO Fees

Physician Class Action v HealthLink
Ill. Superior Ct.

In a class action suit by physicians in Illinois against HealthLink, a PPO for charging physicians to participate, a judge ruled for the PPO.  The basis of the suit was that the money charged to the providers were really referral fees, illegal in Illinois.  The judge correctly in my opinion ruled that the fee is voluntary.  What the judge didn't say but I will is that P.T. Barnum was right "There's a sucker born every minute" and the Illinois physicians qualify.        Top

HMO Problems
Physicians v Aetna
Class Action

Judge Moreno in Miami at first delayed and then allowed the final settlement between the physicians and Aetna. The settlement is to be for $470 million.  Out of that amount the physicians who got screwed would get $100 million or about $142 each.  The attorneys would get $50 million.  

Humana has settled with the physicians of the Greater Cincinnati area for $100 million.  This is to paid over three years by a 30% increase in reimbursement rates.  Humana will also pay $6 million in attorney fees and costs.  This is the floor but each physician will still negotiate their own deal with Humana.  Aetna, Anthem and UnitedHealthcare still have not settled.  

The Blues of Arkansas are suing for a declaratory judgment stating that the state's any willing provider act is unenforceable.  The state is pushing back by suing to dissolve the temporary restraining order on the any willing provider law in the face of the earlier US Supreme Court ruling in Kentucky. 

Horizon Blue Cross of New Jersey will pay a fine of $200,000 for late payment to their providers. They still have to pay the claims as well, but do get the float which is considerably more than $200,000.          Top

Peer Review

Poliner v Texas Health Sys.
ND Texas

Finally, a court has ruled that HCQIA is not a wall that hides all wrongs.  Poliner was under peer review for cardiac cath adverse outcomes.  The problems were egregious enough that he was asked to sign an abeyance letter stating he would perform no more cath procedures until the review was completed.  Later, after the review, he was summarily suspended.  In the lawsuit he testified that he was told to sign the letter or be summarily suspended and was given no opportunity to defend himself nor what cases were under review.  He sued the physicians involved; cath lab director, hospital, and the chiefs of cardiology and internal med. The court stated that the abeyance letter had been a summary suspension and the defendants had failed to make a reasonable effort to obtain the relevant facts before imposing the suspension.  The decision will probably be appealed but at a loss of money to the hospital due to the advice of the attorney.  Probably a good time to look for a new one. 

Hassan v Mercy American Hosp
CA Supreme Ct.

Hassan applied for privileges at Roseville Hospital who asked for a letter from his prior hospital, American.  American sent letters from his residency program many years prior.  He was refused admission to the staff of Roseville partly because of the old letters.  The California Supreme Court ruled that Hassan had no cause of action but also stated that there is no absolute immunity and only qualified immunity for sharing of information.  If one willfully lies about another they must pay the consequences.  This is fair but the medical societies don't like it.  They are afraid it will stifle candid discussion.  The case would not do that if no one lies. 

Sahiobel v Providence Healthcare
Ca. Ct. App.

In a major victory for the physicians, the court ruled that the state law requires a full hearing prior to the termination of privileges and not after. The facts of the case are particularly egregious by the hospital board of directors who did their own ad hoc investigation after the medical staff cleared the physician.  The board hired an eastern consulting firm noted for its reliance on hospitals for its income to review the 11 surgical cases.  It was not until the board ad hoc committee had all its ducks in a row that it retroactively failed to reappoint the physician.  The physician sued for an injunction immediately stating he did not get a fair shake under state law.  The trial judge sided with the hospital and the court of appeals overturned the trial judge. The court of appeal states the plain meaning of the word proposed sets the tone for the appeal.  If the physicians have a proposed action against them, they are entitled to a hearing, not after the fact. 

Dixon v Regents of the Univ. of Calif.

In another physician victory a physician has won a right to sue for race discrimination ten years after the fact.  The physician was in the UCLA Family Practice program and was dismissed for poor performance after his first year of residency.  Since that time the University has been stonewalling and not allowing the case to go to trial.  The University had let the internal appeals process go on for three years without a resolution when the physician sued for racial discrimination under FEHA.  The trial court ruled for the University but was overruled by the DCA. The court balanced the right to administrative hearings versus the futility of exercising those rights.  Here the court stated it would be futile to allow the internal process to continue.  The physician who never could get a license because of this and who has been working in a lab can now get his day in court.

Rocky Mtn. News v Univ. Hosp.
DC Colorado

The newspaper sued to publish a peer review report about neurosurgeon Dr. Awad.  The hospital wanted the report which had been sent to paper no published.  The judge said that freedom of speech overrode the rights of the hospital in the peer review process.  The paper is getting authorizations from patients to publish their cases in the paper.  Dr. Awad is for the release of information as long as the part of the report that exonerates him is also made public.  He is currently suing the hospital for discrimination.  His privileges were revoked last December and reinstated one month later.  He is now to be a professor of neurosurgery at Northwestern University.        

Lloyd v Quorum 
Kan Ct. App.

Dr. Lloyd was accused of disruptive behavior for using obscene language on nurses.  The hospital could not substantiate the allegations and Dr. Lloyd sued the hospital and CEO for defamation and tortious interference with business.  The court tossed the case and this was upheld on appeal.  Dr. Lloyd's suit was based on the procedures used was improper and did not follow the state peer review statutes.  The court said that bylaws were not intended to preclude any other form of appropriate inquiry into hospital concerns.  The CEO was empowered to investigate by his duty to the Board and therefore no malice was intended.  There was no contractual breakage so the tortious action was also tossed.  

Tenet v Taitel
Fla. Dist. Ct.

The Florida District Court held that a blank hospital form used to evaluate nursing competence in sedation was privileged.  Since the forms were used in the quality and peer review process they are privileged under the Florida statute.         Top

Joke Gone Awry

State v Huckleby, Garcia
NM Magistrate

Huckleby and Garcia were two nurse's aides in a nursing home.  Huckleby decided on a playing a joke on a resident and obtained urine from one home resident and fed it to another.  The resident found out and complained.  The magistrate sentenced Huckleby to 180 days in jail but 175 suspended and $500 fine of which $300 was suspended if Huckleby completed 100 hours of community service.  She was then given an additional 100 hours of community service and ordered to write a letter of apology.  Garcia was found guilty for not reporting the incident.  She was sentenced to 180 days of jail and those suspended, a $500 fine but $300 lopped off if she did 100 hours of community service.  She also was ordered to do another  50 hours of community service and write a letter of apology.  There was found never to be any harmful intent and no injury or the practical joke.        Top

Medical Marijuana

Raich v Ashcroft
9th Circ

Two women, Raich and Monson, sued John Ashcroft for the right to smoke grow or obtain marijuana without fear of federal prosecution.  The women are using the Prop 215 argument plus the lack of interstate commerce to invalidate the Congressional laws.  The Court heard the arguments and will rule later.  The women will lose.  

 Conant v Walters
US Supreme Ct.

The US Supreme Court refused to hear the Governments appeal of a 9th Circuit opinion that allowed physicians free speech in discussing the pros cons and alternatives of medical marijuana with their patients. The physician can be punished if they help the patient obtain the drug. 

In Oregon, a state with a medical marijuana  law, the feds have seized plants for medicinal purposes.  The grower was not arrested since they know no jury would convict without appeals.  

   Fry V DEA
9th Circ.

Dr. Fry is suing the DEA to get her federal certificate to prescribe drugs back.  This was removed last year for prescribing medical marijuana.  With the Supreme Court and 9th Circuit rulings, she should get her license returned.   

Office of the California Attorney General

California's Attorney General has issued an opinion on October 21, 2003 that the Medical Marijuana Law permits the use of concentrated cannabis and hashish.         Top


Barlow v VA Hospital

Barlow had abdominal aortic aneurysm surgery and was left with a towel in his abdomen.  Several days post-op he had a high fever and upon reoperation the towel was found.  Barlow sued and the government offered $100,000.  The judge awarded $455,000.  The government attorneys had no comment. 

Smith v Shuckman, MD

The patient went to the ED with a sore throat.  She had a flexible bronchoscopy performed and upon extubation vomited a large amount of blood and died.  The report stated that she was bleeding form a right tonsillar artery but no such bleeding was noted at autopsy.  Shuckman also attempted a trach but was unsuccessful.  The patient had had this previously and was just given fluids and observed.  The verdict was for $1.2 million.  

Spain v Pitt County Hosp.
NC Superior Ct.

Spain, a seven year old was burned by a lamp at the hospital.  The girl was under the lamp while having her lip sutured for about 15 minutes and received significant burns.  The hospital agreed to liability and the jury awarded $2.3 million.  

Wood v Barnes Hospital

Wood died as a result of mismatched blood given during successful heart surgery.  He was given two units of A positive blood instead of O positive blood.  Hospital officials acknowledged the mistake and told Mrs. Woods she would not be billed for the surgery.  Mr. Wood was 66 years old so the hospital would have been paid by Medicare under the DRG system plus the under $1000 co-pay by either the patient or the secondary insurer.

Miller v HCA
Texas Supreme Ct.

Miller had a newborn with multiple congenital problems.  The Millers were asked to consent to treatment for their child and refused.  The child was treated anyway and ended with severe brain injury.  The Millers sued and initially won $50 million.  This was overturned by the Ct. of Appeal and affirmed by the Supreme Court.  The rationale was the emergent condition of the newborn did not need the consent of the parents.          

Hakim v William Backus Hosp.
Filed USDC Conn.

A psychiatrist who was fired from the William Backus Hospital has filed suit against the hospital stating its emergency room has contributed to suicides by providing inadequate care to mentally ill patients.  The allegations were substantiated by two independent sources who state the patients have been discharged prior to stabilization as required under EMTALA.  The hospital denies the charges but this is the second time they have been sued for the same thing.  The first one was dismissed by the judge and is currently under appeal.  Dr. Hakim was fired after reporting the problem to the hospital's president and to the senior vice president for patient care.  If you don't believe this can be true, please see the Pittsburgh Post Gazette series of this week.        Top 

Elder Abuse 

Furlong v St. John's Med Ctr. Oxnard Calif.

Furlong had an advanced directive stating she did not want to be kept on life support.  The directive was on file at the Catholic Healthcare West hospital.  She was kept alive for ten days following a cardiac arrest by artificial means.  During this 10 days the patient was cognizant of her surroundings and verbally incapacitated.  The judge had earlier dismissed an elder care complaint which requires a higher standard of proof than negligence.  The hospital and physicians deserve to be sued for at least negligence for not following an advance directive.        Top

Fraud and Abuse

The Feds have announced they have collected in 2002 over $1.8 billion from health fraud actions.  About $1.4 billion was returned to the Medicare Trust Fund and $59 million to the Medicaid program. The remainder went for expenses.  Although it sounds like fraud must be running wild, it should be pointed out that $875 million was from one action.  Seventy five per cent of the prosecutions or settlements in 2002 were health care related.

US v Nazanyan
Additional Charges

Ms. Nazanyan, the associated administrator for Tenet Alvarado Hospital, has been hit with additional charges.  The new ones are obstruction of justice and tampering with witness testimony.  If convicted on all charges it's 10 years in the pokey.  

US v St. Louis University

St. Louis University has agreed to pay $1.8 million for fraudulently billing for surgery and anesthesia services.  The anesthesiologist who originally filed the whistle blower suit is entitled to 25% of the payment.  The physician is now in private practice.  He has a wrongful termination suit against St. Louis University for retaliation.

US v Couser, MD

 Dr. Couser of the University of Washington has been sentenced to five years probation, $100,000 fine and 1000 hours of community service.  He lied on a patient's chart that he had been present for a dialysis when he had not.  This and other falsities led to $100,000 of false claims to Medicare.

US v Elliot, DO

A Florida federal grand jury has indicted Paul Elliot, DO for 23 counts of Medicare fraud.  He is accused of receiving $320,000 of fraudulent funds fro the program.  He also was accused of having forged records.  If convicted he will face 10 years in jail for the fraud, 20 years for obstruction of justice and 25 fines of $250,000 each.         Top


Kayem v Stewart
Tenn. Ct. App.

A physician sued his former employer stating the restrictive covenant was void for public policy and scope reasons.  The covenant was for fifty miles and he was practicing within that radius.  He also attempted to use a state statute that stated that "employing entities" shall not restrict a physician's right to practice medicine.  His attorney forgot to read further that the statute was only for hospitals.  The court found reasonable time and scope of the covenant and it was upheld. 

Toledo Heart Surgeons v The Toledo Hospital
Ohio Ct. App.

Dr. Mousset was told his contract with the hospital was not to be renewed.  He sued for a restraining order and won.  The hospital countersued for defamation and disparagement for statements made on his website, the newspapers, letters to patients and physicians regarding the hospital.  The court tossed those hospital assertions as protected opinions.  The hospital had to pay costs for the appeal.  

Zeigler v Anesthesia Ass. of Lancaster
3rd Circ.

The third circ. has followed other circuits in stating physicians are not employees of a professional corporation for the purpose of a sexual discrimination case.           Top


Arani v Trihealth Inc.
6th Circ.

Arani, an internist at the hospital, sued the hospital for antitrust violations after he was not allowed to interpret cardiac tests.  The ability to interpret these tests were based on a point system.  The more a physician participated in the hospital politics, the more points they accumulated.  This method benefited invasive cardiologists who did procedures at a separate hospital in the system. The court ruled for the hospital since Arani did not meet his burden showing how the point system produced anticompetitive effects and the relevant market and therefore the market power of the hospital was limited to the eastern suburbs of Cincinnati.          Top

State Pays HMO

Kaiser v Colorado

Colorado has paid Kaiser $10 million that they underpaid for care to Medicaid patients.  The state actually underpaid by $14 million but settled for the lesser amount. The five other HMOs have sued the state for $150 million due to the underpayments.  The state will probably lose the other cases as well.        Top


Texas v Grotti

Dr. Grotti has been charged with murder of a patient in an ICU due to her allegedly placing her hand over the patients ET tube suffocating the patient.  Dr. Grotti had her license revoked in Texas after she was found to have done nothing wrong by the hospital peer review panel and two administrative law judges but was hung out to dry in the media.  The state did no review of the facts in the case when they revoked the license.  She did admit to blocking the airway one hour after she pronounced the patient dead in order to stop the agonal respirations.          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.