November 15, 2003 Recent Legal News
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Davila v Aetna
US Supreme Ct.
The US Supreme Court has agreed to hear a combined two cases form Texas whether managed care insurers may be sued under state law for malpractice for their refusal to pay for medical care recommended by a physician. The other side is whether this is an administrative decision which is preempted by ERISA. The 5th Circuit has ruled that the two cases were not preempted by ERISA. The first one is Aetna not paying for Vioxx after it was prescribed by a physician. The patient suffered GI bleeding after taking the approved lesser expensive pills for several weeks. The other one was a one day approval post hysterectomy. The patient had complications after being discharged.
Administaff, Inc. v Aetna
Jury Texas
Administaff, a personnel management company, sued Aetna after the insurance company threatened them with immediate termination if they did not agree to both retroactive and future premium increases. The jury thought this might be heavy handed and awarded Administaff $15.5 million.
In a rare win for the HMO industry, four HMOs, Anthem, Cigna, Oxford and PHS, have had the case against them by the Connecticut Attorney General dismissed by the judge. The Attorney General will appeal. The charge was that the HMOs improperly delayed claims and payments to providers. Judge Moreno dismissed the cases since the state lacked standing to sue. This is the second time the Attorney General has had the suit overturned. Top
In Re Calhoun
CA Ct. App.
Two sexually violent predators under the California Sexually Violent Predators Act, W&I Code 6600 et seq were in prison and were forcibly medicated with psychotropic drugs. The convicts sued. The Court ruled that even with a lack of an emergency medical personnel may forcibly medicate those under the Act if the treatment is in the best interest of the patient. Here, the medication was to treat their mental disorder and mitigate potential dangers to others and themselves. Under the SVP Act the convicts must have been originally tried and convicted of certain crimes and at the end of their sentence must go through a second trial to keep them in state hospitals for two year terms for medications. Top
People v Harp
Ca. Ct. App.
The California Court of Appeal ruled that a person convicted of drug cultivation for non-personal use is not entitled to the protection of Proposition 36. Proposition 36 allows those who are convicted of a nonviolent drug possession offense for personal use are entitled to go for drug treatment rather than jail. Top
US v PeaceHealth
Oregon Fed. Jury
The Oregon jury ruled against PeaceHealth for their illegally monopolizing healthcare in Lane County, Oregon and illegally interfering with the business of McKenzie Willamette Hospital. The insurer will try to et the verdict set aside or appeal since it would cost them legal fees of $4million plus $16.2 million in damages.
Spitzer v St. Francis Hosp
SDNY
The New York Attorney General filed suit against two hospitals for rate fixing and division of areas served. The hospitals signed a Consent Decree. Top
US v Schushy
Indicted
Richard Schrusy, the former CEO of HealthSouth, has been indicted on 85 counts associated with an accounting fraud of $2.5 billion. The charges range from conspiracy to commit fraud; mail, wire and securities fraud; making false statements (perjury) and money laundering. Should make for an interesting trial. Mr. Scrushy is free on $10 million bond. To date fourteen former HealthSouth employees , including all five former CFOs have pled guilty to fraud. If found guilty his fine could be $36 million, chump change for a person who received $267 million in salary, bonuses, options and perquisites. He also could get 650 years in jail, an unlikely event. He is the first CEO charged for falsely signing a corporate statement under the new Sarbanes-Oxley Act.
People v Abdol Pirnia
CA Ct. App.
The defendant, a medical doctor, had his medical license suspended and later removed. While the license was suspended, he could not practice medicine. In fact, while the license was suspended he operated on eight patients, one of which was Danielle, a 17 year old female. She was billed about $4ooo for a bilateral breast augmentation which was performed in the physician's office. Postoperatively she developed a would separation and the physician refused to do anything except have here spread the powder of Keflix capsules in the wound. She then went to Kaiser and was seen be a plastic surgeon who removed both prosthesis and treated her with IV antibiotics. The patient reported the physician to the medical board and he was prosecuted by the local DA for mayhem. During the trial he represented himself. Following his conviction he appealed that what he had done was not mayhem and ineffective assistance of counsel. The court of appeals found that his actions did rise to the required long term disfigurement necessary for the charge of mayhem. His other question was dismissed since he did raise and argue points and did cross examine the People's expert. Top
Thompson v Young, MD
Settlement
Thompson, a nurse, sued the University of Kentucky neurosurgeon, for not acting quickly enough when she developed optic nerve swelling following pituitary gland surgery. The terms of the settlement were not revealed.
Malcolm
v Mt. Vernon Hospital
NY App. Ct.
A patient sued the hospital and his physicians after having a stroke. The cause was not giving anticoagulants to prevent the stroke. The hospital stated they should be dropped since the physicians are independent contractors. The Court disagreed. The hospital did not meet its burden of proving the patient could not have reasonably believed the physicians were acting for the hospital. Top
Pachowitz
v Ledoux
WI Ct. App
In a pre-HIPAA case a patient sued an won a judgment against an EMT. The EMT responded to a 911 call for the patient. She found the patient and transported the patient to the hospital. later she told a friend about the encounter and that it was a possible drug overdose. The EMT told the friend because she knew the friend and the victim knew each other and thought that the friend could help. The friend went to the hospital to visit and told the victim about the conversation with the EMT and the hospital staff. The plaintiff then filed suit against the volunteer EMT and the volunteer fire department. The court agreed with the plaintiff. The court ruled that telling just one person can be enough to invade one's privacy. The patient won damages and her attorney fees. Remember, good intentions do not justify blabbing about a patient to those with no need to know.
Campos
v Payne
NY Civ. Ct.
The patient was in an auto accident and requested his medical records from the hospital. The hospital refused without proper authorization. The patient then went to court to obtain a judicial subpoena duces tecum. The court refused citing state privacy laws and HIPAA. The reason was a technicality of the wrong type face and did not have the patient's authorization. Top
A Response
Dear
Dr. Tobias,
I find your web site ( http://www.medicalaw.net/)
interesting but a little over the top at times:
In an interesting twist, the whistle blower who started
the federal investigation has become greedy. Dr. Patrick Campbell, an
internist at the hospital, is now suing to stop the settlement. He and his
attorney believe the settlement should have been about $500 million.
Remember whistle blowers and their attorneys get a significant amount of the
money obtained by the feds. The feds have stated they have gotten back all
the money paid plus a penalty and the settlement was fair. The doctor and
his attorney may have to look to a lower style of living in their retirement.
The motion on asking for an
evidentiary hearing was denied, based on lack of legal standing to ask for a
hearing. My lawsuit is currently on
appeal to the 9th Circuit. At this point it’s not at all clear my
attorney or I will be compensated at all. Corapi/Zerga filed a federal and state
qui tam lawsuit three days before I did, and even though we believe they do not
meet the legal definition of a qualified relator, that may be sufficient to
extinguish my claim under the first-to-file rule. Essentially, that’s the
issue for the 9th Circuit to decide.
BTW, Corapi/Zerga actually
have filed three separate actions: a federal/state qui tam lawsuit, a similar
state court lawsuit alleging fraud against private insurance companies (Corapi
was covered by private insurance when he saw Dr. Moon), and a personal injury
lawsuit based on his treatment by Dr. Moon. Corapi had noninvasive cardiac
tests, which apparently were normal, but nevertheless underwent a coronary
angiogram by Dr. Moon, and then was told by Dr. Moon and others that he needed
urgent coronary bypass surgery. Fortunately for him, he left the hospital before
this happened. It’s likely that he
will receive awards in at least the latter two suits. So who’s truly greedy
here?
Many people, not just us,
believe that the settlement was far too quick and for far too little. Just a few
facts for you to consider: According
to financial reports made to the State of California, RMC had net patient
revenues a little over $1 billion for the six years covered by the
settlement. For the 12 months ending 6/30/2002, RMC was the top revenue producer
in the entire Tenet Healthcare system. Most of that was Medicare and most of
that was cardiac procedures. There are currently almost 1200 individual patient
plaintiffs filing lawsuits alleging unnecessary cardiac procedures at RMC.
Tenet’s stock went up the day the settlement was announced. The
attorney representing RMC in the settlement negotiations was Charles J. Stevens,
who is the former U.S. Attorney in the mid-90s for the Eastern District in
California, and thus was the former boss of the chief negotiator for the
government, Assistant U.S. Attorney Michael Hirst. The settlement was announced one
business day after a preliminary ruling against my lawsuit was issued by the
U.S. District Court, without any prior notice to us. Since the USAO will simply
not reveal how they arrived at the $54 million figure, we will just have to take
their word for their statements regarding the adequacy of the settlement. Under
current law, unless there is a qualified relator that is a party to a FCA case,
the DOJ can and do settle for whatever they deem appropriate, without any
outside scrutiny. Senator Grassley, among others, has gone on record stating
this is a problem that needs to be fixed. We believe this settlement has the
appearance of a quick back-room deal that was far too favorable to Tenet/RMC.
Why? We were trying to find out the answer to these questions.
The highly personal and unwarranted attacks on me by Michael Hirst, which
occurred only after we filed the motion asking for a hearing on the
settlement, obviously indicate that we struck a nerve there.
Also, Corapi was one of two
patients that the FBI became aware of in the summer of 2002, leading to the
opening of the investigation. The other is Bob Simpson, who is one of the
attorneys now representing hundreds of individual patient plaintiffs alleging
improper care at RMC. I have been trying to do something about the Moon/RV
situation at RMC since 1996. These efforts were highly frustrating and involved
considerable personal/professional risk, and were made without any compensation
whatsoever. The first attorney I approached, in March 1999, charged me $1000 for
the advice: “Do not blow any whistle—period.”
And he stated in his letter that he approached the local D.A.’s office.
That local D.A. was McGregor Scott, who is now the U.S. Attorney in the Eastern
District in California, and Michael Hirst’s boss.
Even after I went to the FBI, and essentially told them everything
I had found out up until then, I could not get attorneys to represent me in a
qui tam lawsuit. One of these firms were on the phone to me the day the raid was
announced in the papers. You may not even care enough to read this, but to give
you a little more insight into my role in the RMC scandal, I am enclosing a copy
of a declaration I made that was recently filed in court.
This whole saga thus far has
been a painful but fascinating education in the health care, legal, and law
enforcement “systems.” If I knew
then what I know now, I would have done things differently and perhaps better.
But I was for the most part acting on my own, with little help from the medical
or legal professions.
Sincerely,
Patrick Campbell, M.D.
I love being over the top. Thank you. AT
Fla. v Tampa General Hosp.
Settlement
Tampa General Hospital has agreed to pay Florida $4 million for fraudulent Medicaid charges. This was for routine clinic visits which had been non-payable since 1998. The $4 million is broken down in $2.9 return of fraudulent billings and $1.1 million in fines for the fraud. Previously, Jackson Memorial in Miami paid the state $7.34 for the same fraudulent billings. Top
California
Med. Assn. v California
Filed
The California Medical Association and some individual providers have sued the State to stop the funding cuts that go into effect at the beginning of the year. The State under the leadership of the Democrats is in dire financial straits. In order to help get out the Democratic controlled Legislature and the lame duck Governor cut payments to providers by 5% next year and another 5% the following year. This will lead to many providers dropping out of the program and leaving the people to go to the ED where the care is more expensive. The suit state the cut violates the Social Security Act. Top
Mahmud v Bon Secours Charity
Health Sys.
SDNY
The physician sued the hospital for restraint of trade, ethnic discrimination and slander for not reappointing her to the medical staff. She lost since she failed to file a complaint with NY Public Health Council in order for the Council to investigate the hospital's actions. Let's hope she wasn't billed for the attorney's error.
Rdzanek v Hosp. Serv.
Dist.
ED La.
The physician had her medical privileges reduced and sued the hospital and all the usual suspects for violating her due process rights. She subpoenaed the peer review files of all the other cardiologists on staff. The hospital moved to quash. The lower court found for the physician. The court of appeal argued since this was filed in federal and not state court. There is no federal peer review privilege for peer review records.
Gianetti v Norwalk Hosp.
Conn. Supreme Ct.
A physician was denied reappointment to the staff and sued for damages and injunctive relief. He won nominal damages and no injunction. He appealed and the Appeals Court stated he was the same as a "lost volume dealer" and should have been awarded the lost profits for the year his privileges were lost. The Supreme Court reversed the notion that the physician was a "lost volume dealer" as a matter of law. The Supreme Court ordered a new trial to determine whether or not the physician was really a "lost volume dealer" and that the time limitation goes not for one year but until the hospital gave the physician his fair hearing.
Lo v Provena Covenant Med. Ctr.
Ill. Ct. App.
The Illinois Medical Society is asking the Illinois
Supreme Court to review and overturn the Illinois Appellate Court decision
in this case. Lo was summarily suspended from the staff at Provena in
Champaign, Illinois, by the Board of Directors without the input of the
Medical Staff. The hospital found its cardiovascular surgical
mortality was higher than the national average, so they brought in a outside
reviewer. The outside reviewer found grave concerns. The
hospital requested and Dr. Lo agreed to an outside review of his work, which
was found favorable. The hospital then gave Dr. Lo three choices
including doing all cardiac surgery under the direct supervision af another
cardiac surgeon. Dr. Lo agreed but stated in a letter that it was an
involuntary imposition and asked for a fair hearing. The hospital
refused stating there was no corrective action. Later Dr. Lo was going
to do a cardiac procedure without the required supervision and the medical
staff president along with the executive committee of the board suspended
him. The doctor was never given a fair hearing on the summary
suspension either. The court's rationale for the decision was that the
Board has the ultimate authority. It completely disregarded the
medical staff bylaws and by so doing would allow lay control over the
practice of medicine, an illegal act in Illinois. Top
Ass. in Orthopedics v St.
Vincent The medical
group of Black Orthopods accidentally found out the group of White Orthopods at
the hospital were being paid to see indigent patients when they were not.
They then found that the hospital had been sending more Worker
Compensation patients to the other group in spite of a promise to
distribute the patients equally. The judge threw out the billing issues
stating the Black group stopped billing. The case continued on the issue
of discrimination in the Workers Comp. In 2001 the white group had 63 referrals
and the black group had one. Between June 1999 and February 2003 the white
group had 419 compared to the black group's 90. The hospital stated the
difference was due to business and not race. The black group admitted to
not billing the hospital for its on call but states that its bills were returned
and they were told the hospital could no longer pay for on call services.
One of the black doctors was also summarily removed from the call roster for
doing a surgical procedure at another hospital. According to the facts in
the Cleveland Plain Dealer, the hospital should pay the orthopedic
group close to $1 million. Top Chomer,
MD v Logansport Mem. Hosp. Dr. Chomer,
an emergency room physician employed by Logan Emergency Physicians and working
at the hospital, states he told Medicaid patients that their use of the ED for
minor complaints was inappropriate. He was told by his employer not to do
that since it cost the hospital and the ED physicians money. He also sent
a letter to the Family and Social Services Administration. Soon after the
letter was sent he was fired. He is suing his former employer and the
hospital under the whistleblower statute. The hospital attempted to have
the case tossed on summary judgment but failed and the case is now headed for
trial. Dr. Chomer is now working in
Florida. 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.
USDC
To Be Tried