September 1, 2014 Recent Legal News


Peer Review and Employment



Fraud and Antitrust



Coons v Lew
9th Circ

Coons, an Arizona surgeon, sued to stop the formation of the IPAB and that the individual mandate is illegal in Arizona due to a constitutional provision.  The court quickly took care of the case by saying Obamacare overrules Arizona law and that the IPAB challenge is not yet ripe.

Catholic Diocese of Greensburg v HHS

The Diocese won a permanent injunction against the feds prohibiting them from fining the Diocese for the contraception mandate.  Religion trumps Obamacare.  Other dioceses have won similar cases.  HHS is appealing the decisions.  Another to the Supremes?

Planned Parenthood v Iowa Board of Medicine
Court Iowa

The Iowa medical board won the case stating that physicians can not prescribe pregnancy ending drugs with out a in person physician exam.  No telemedicine for this.  Planned Parenthood plans to appeal the case to the state supreme court.         Top 

Peer Review and Employment

Alzadon v Highlands Hosp
Ky Ct App

Dr. Alzadon was recruited as a general surgeon and signed the standard contract requiring working two years in the area in return for a one year income guarantee.  After several months he had is privileges reduced and was required to take a mini residency.  He agreed but failed to complete the residency.  The hospital then revoked his privileges and reported him to the state licensing board. The board went after his license and the hospital asked him to repay his guarantee since he did not fulfill the two year requirement.  He paid $75,000 but not the rest.  The hospital sued for the remainder and won in lower court plus attorney fees.  The court of appeal agreed.  Now he is out the money owed plus his own attorney fees and possibly his license and a NPDB notification.  Should have finished the residency.

EEOC v Midwest Medical Regional Center
WD Okla.

The EEOC filed charges against the hospital for terminating a nurse for missing work while she was on leave.  She was on disability leave for cancer but was required to call in or be considered missing work.  She was fired after she "missed work" for seven days.  The court ruled summary judgment was not justified and the case should go to trial.

Levitan v Northwest Community Hospital
ND Ill

This Jewish female surgeon complained about a competitor.  The competitor and his associate allegedly then harassed Dr. Levitan.  The MEC on which the competitor's partner sat came after her in a sham peer review.  They recommended her privileges at the hospital be terminated.  She had privileges at other hospitals in the area.  She requested a peer review hearing and the panel blasted the MEC for biased peer review.  The MEC nevertheless terminated her privileges and the board rubber stamped it.  She rightfully sued and the hospital lost HCQIA immunity for probable not having a reasonable cause of action.  She sued for antitrust and lost since she has privileges in multiple hospitals.  She can continue to sue for damages for harassment.  Dumb hospital.  Dumber hospital attorney.  THIS HOSPITAL DOES NOT SEEM TO LIKE PHYSICIANS THAT DO NOT FIT THEIR MOLD.  STAY AWAY.

Outten v Genesis Health Care

A nursing supervisor was terminated from her position for not coming in to work during Hurricane Sandy.  The nurse had been notified that nature is not a reason to miss work.  she had other absences prior.  she stated she was fired because age and disability.  The court disagreed and said during summary judgment she did not prove her case for disability or discrimination. 

Bode v LA Doctors Hospital
CA Ct App

In an interesting case the appellate court said that California's opt out of HCQIA was overridden by Congress and therefore California must abide by the federal law.  The anesthesiologist was accused of drug diversion and sued in state court.  She won over $1 million in past economic damages and more in future damages.  She wanted attorney fees and appealed on that ground.  The hospital also appealed.  Guess what, they both won.  She lost the attorney fees and some money but had to pay the hospital's attorney fees on the appeal.  The hospital lost maybe some money but depending on whether they are exempt from HCQIA they may be off the hook for all monies.          Top


Moore v Torrance Memorial Physician Network

Mr. Matthew Moore is suing his physician and the Network for listing homosexuality under chronic conditions on his medical record.  He is suing for libel and emotional distress.  The idiot physician said that the diagnosis was warrented since their is still debate whether or not homosexuality is a disease.  There is no debate.  It was removed from the DSM many years ago.  The physician put in the record code 302.0 which is ego-dystonic sexual orientation.  The network apologized but one year later the diagnosis was still on the chart.  The code had been removed but not the diagnosis.  It was now a chronic problem and not a diagnosis.  The network blames the continuation of the offending diagnosis on the electronic medical record, which they have control over.  Just write a check.

Buman v Gibson
Tenn Ct App

The patient received treatment for foot ulcers from a PA for several months and eventually lost his leg.  They sued the PA and the supervising physician for not referring the patient to a vascular surgeon promptly.  The physician had reviewed about 30% of the PA charts, 10% more than required under law.  The physician won a summary judgment motion and the appellate court affirmed.  

Shapira v Christiana Care Health Services
Delaware Supreme Court

The patient sued the physician and the hospital for lack of informed consent, malpractice and failure to supervise the physician agent.  The physician and the hospital did not explain the alternatives to the experimental procedure done on the patient and that the physician had a potential conflict of interest.  The jury awarded millions in damages and apportioned 65% to the surgeon and 35% to the hospital.  The appeal was on various technical grounds and did not interfere with the verdict.

Ramirez-Ortiz v Corporacion del Centro Cardiovascular de Puerto Rico

The patient entered the hospital and was cared for by two cardiologists.  The patient died and a suit was filed.  In the summary judgment phase both sides pled and lost the summary judgment.  The issue is whether or not the patient went to the hospital for treatment and was assigned the physicians or whether the patient had a preexisting relationship with the physicians.  If the former the hospital may be liable if there was med mal.  

Morales v Rady Children Hospital San Diego

The minor with no insurance was seen in the ER of the hospital by a NP and sent home.  She returned with meningococcal meningitis. The hospital is being sued for EMTALA and med mal.  The court allowed the EMTALA claim based on inappropriate screening but not disparate treatment.  The court also allowed the negligence case to go forward.

Medlin v Young
Jury Verdict

Not being vigilant has cost the physician and the surgery center close to $2 million.  The physician, Dr. Timothy Young, then of North Carolina Eye, Ear Nose and Throat, asked for VisionBlue to stain a cataract he was given methylene blue instead.  Methylene blue is very toxic to the eye and the patient is now blind in the operated eye.  The jury awarded $1.5 million for the negligence of the nurses and physician but with interest the award will now by close to $2 million. 

Jefferson v Missouri Baptist Medical Center
MO Ct App

Jefferson sued a radiologist and the hospital for vicarious liability for misreading an x-ray.  The hospital moved for summary judgment due to the meaning of employee.  They said the definition is the common law one which is the right to control the work of the employee.  The case against the hospital is dropped.        Top


Sidney Hillman Health Center of Rochester v Abbott Labs
ND Ill

The judge tossed the case of the union suing Abbott for marketing Depakote for conditions that were unapproved and making the union pay for it.  The judge rightly said that the case was not timely filed since the event happened in too long ago (1998) to overcome the statute of limitations.  

Customers v Anthem Blue Cross

In yet another case against the insurer for the Obamacare narrow network of providers.  There has been other suits for the same thing as well as a state investigation into the matter.  This is 33 customers suing the insurer.  The customers state that the insurer misled them regarding the networks.  Because of the narrow networks the plaintiffs had out of pocket medical bills.

Oregon v Oracle

Oregon has filed a suit for over $200 million for the failed startup of the Oregon Obamacare exchange.  Oracle was the primary developer of the site.  This is in response to a prior suit by Oracle against Oregon for $23 million for continuing to use their product while not paying for it.  

Aetna v Huntington Surgical Center

Aetna sued the surgical center for unlawful billing and patient referral.  The center is owned by the physicians who are accused of putting patients in the outpatient center which is outside the Aetna in-network.  They promise the patients that go to their facility co-pays will be waived.  The defendants failed to get this dropped in the summary judgment phase.  They did get the plea of unjust enrichment dropped.        Top

Fraud and Antitrust

US v Calaustro

Dr. Edna Calaustro was sentenced to 24 months in prison for health care fraud.  She got recruits for Dignity Medical Supply and Debs Medical Distributor.  She and her co-conspirators now have all been convicted and sentenced.  She was also told to submit restitution of $1.757 million and to forfeit a like amount.  

US (Parikh) v Citizens Medical Center
SD Texas

The hospital is in deep doodoo.  Three cardiologists have sued the hospital for illegal kickbacks to other cardiologists by decreased rent and increased salaries if they sent one cardiac surgeon their cases.  The physicians sued not only the hospital but also the manager of the cardiology and the surgeon.  All significant hospital and the other defendants pleas to dismiss were denied.

St. Alphonsus Diversified Care v MRI Associates
Idaho Supreme Court

The high court affirmed the $54 million jury verdict against the hospital in favor of MRI for breach of contract.  The sneaky hospital signed a contract with MRI which had a clause that if there was a dissociation the hospital would not compete for one year.  There was and they did.  Now they pay for their foolishness.  

US v New York Heart Center

The center also known as Cardiovascular Specialists, P.C. entered into contracts with the cardiologists where their pay was tied to their referrals to the nuclear scans.  This is overtly against the Stark law and now they are paying the feds a fine of $1,336,636.  How dumb can you be?

US v Carondelet Health Network

In a huge qui tam suit the Arizona organization will pay a fine of $35 MILLION.  They billed for inpatient rehab in their two Tucson hospitals on patients who did not qualify for inpatient.  Big payday for the whistleblower.

US v Persaud

Dr. Harold Persaud a cardiologist of Westlake, Ohio, was indicted for health care fraud.  He is accused of doing unnecessary testing and referring inappropriate patients for cardiac surgery.  He then billed Medicare for these services to the tune of $7.2 million from Medicare and $1.5 million from private insurers.

US v Imran

Dr. Zahid Imram, a psychiatrist in Baton Rouge, has been sentenced to 86 months in prison for falsifying records and fraudulently billing Medicare for Partial Hospitalization.

Nurses v Momence Meadows Nursing Center
7th Circuit

Two whistleblower nurses sued the nursing home for fraud.  The nature of the fraud was sub-standard care.  The court stated that sub-standard care is not enough for the worthless care standard.   The Court stated that "the performance of services must be so deficient that for all practical matters it is the equivalent of no services at all".

US v Okoye

Dr. Charles Okoye of Carson, California, pled guilty of health care fraud for writing prescriptions for unneeded power wheelchairs.  He got illegal kickbacks for these prescriptions from Adelco Medical of Gardenia.  As part of his guilty plea he allowed the Medical Board of California to remove his license.        Top


Patients v St. Elizabeth Medical Center
To Be Filed

Another wonderful EMR problem. An idiot physician put patient information on his private computer and on a thumb drive.  They were both stolen from his home and of course the information was not encrypted.  There are now 600 more poor souls with their health information out in the world.  Thank you Obama.

Patients v Cedars Sinai
To Be Filed

Now comes another 500 people with compromised information thanks to another stolen laptop computer.  These are also looking at potential identity theft.         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.