Recent court cases spark risk management concern
March 1, 1998 5 minutes read
Recent court cases spark risk management concern
Fraud isn’t all you need to worry about
Several recent court cases should give risk managers cause for concern. The cases cover a wide range of issues and bring home the fact that all the recent fraud publicity has made whistle-blowing a profitable sideline for hospital employees. Plus, courts are assessing huge judgments, apparently sensing public sentiment for putting egregious defrauders on the spit.
Consider these recent cases:
• An ophthalmologist in Arcadia, CA, has paid the United States more than $375,000 to resolve allegations that he defrauded Medicare through false billings for his services, according to assistant U.S. attorney Faith Devine, JD. In one of the largest settlements involving an individual doctor in a Medicare fraud case, Badurdin Kurwa, MD, paid the government more than 10 times the amount he billed Medicare. In addition, the doctor agreed to submit to a five-year compliance program with the U.S. Department of Health and Human Services. The settlement does not include any admission of wrongdoing by Kurwa.
The doctor was investigated after his former practice administrator, Sandra Hearn, filed a qui tam lawsuit in October 1996.1 The qui tam lawsuit allows the former employee to receive a substantial portion of the damages recovered for the fraud she reported, between 15% and 25%. The exact amount has not been decided, but Hearn could receive up to $93,750.
In addition to paying $375,000 to the government, Kurwa must pay Hearn’s legal fees involved in filing the qui tam lawsuit. That brings the doctor’s total settlement costs to more than $400,000, Devine says. She tells Healthcare Risk Management that the settlement amount is unusual in light of the fact that it involves a single practitioner rather than a hospital or other large organization.
"This is one of the largest settlements we know of involving an individual, and that is certainly a significant amount to be paid by one person," she says. "We consider this to be a major settlement."
In her lawsuit, Hearn alleged that the ophthalmologist had been submitting false claims to the Medicare program since 1991 involving a procedure that helps detect a degenerative eye disease. The procedure requires a special type of scope to look at the eye, and according to his practice administrator, Kurwa never owned one of those scopes. Hearn also alleged that the doctor altered patient charts to conceal the false billings once he was faced with an audit.
• To avoid a possible jury award of $62 million, Kaiser Permanente’s North Texas HMO in Dallas recently agreed to pay $5.35 million to the family of a man who died after doctors there failed to diagnose his heart disease. The case had been closely watched because the plaintiffs contended the man died as a result of the HMO’s overly aggressive attempts to cut costs. It also was one of the first cases filed under a new Texas law that allows patients to sue managed health care firms for medical malpractice.
Defendant lost in mock trial
The settlement came after an unusual "test trial" ordered by state district judge John Marshall, JD, to push both sides closer to a settlement. A jury heard arguments in the case and rendered its verdict, but parties were not obligated to abide by it. If they did not agree to settle, the real trial was to begin the following week.
But when the HMO’s representatives saw how the test jury responded, they quickly agreed to the settlement. The test jury sided with the plaintiff’s family and said it would have awarded $62 million. There was no guarantee that a second jury in the real trial would yield the same result, so the plaintiff still had motivation to settle. For the HMO, however, the risk of such a huge award justified a fairly large settlement.
The case involved Ronald Henderson, who was 56 when he died in a clinic examining room at a Kaiser Permanente facility. His family alleged that he had visited the HMO facilities repeatedly with complaints of chest pain, but his heart disease was never diagnosed. The lawsuit hinged on strong allegations that the HMO physicians were reluctant to perform necessary tests and procedures because of the HMO’s intense efforts to cut costs.
Kaiser Permanente denied that allegation and said Henderson died because he was an overweight smoker who would not follow doctors’ orders. A company spokesman confirmed the settlement but declined to comment further.
• Yale-New Haven (CT) Hospital must pay a physician $12.2 million, the largest personal injury award in Connecticut history, for failing to train her adequately in the proper way to avoid the needlestick injury that led to her HIV infection. A jury ordered the payment after the doctor, whose identity was kept secret during the trial, contended that she was not properly trained in safety techniques during her residency at the Yale hospital. She stuck herself with a needle while inserting an arterial line into a dying AIDS patient in 1988, when she was only seven weeks into her first-year internship. She is now 35 and has not developed symptoms of HIV disease.
She testified that she had inserted an arterial line successfully only once before, yet she was instructed to do the procedure on her own. The doctor also contends that she was taught to keep the needle near the catheter after inserting it, which is not considered safe practice, and that she was not taught how to stop blood from spurting through the catheter. When blood spurted onto her coat, she attempted to stop it by putting her thumb on the end of the catheter instead of applying pressure at the insertion point. Because she had placed the used needle nearby, she stuck herself while trying to stop the blood spurting.
The jury did hold the doctor partly responsible for her injury. The total award was $15.8 million, but that was reduced by 22.5%, the degree to which the jury said the doctor was responsible for her injury. The jury deliberated for three hours and made only one request. They needed a calculator, which was generously provided by the doctor’s mother.
Yale will appeal the decision, says William Doyle, JD, the university’s attorney. He tells HRM the jury’s decision was based more on sympathy for the doctor than on the facts. Yale-New Haven’s residency program has an outstanding reputation, and the injured doctor’s training met all the standards of 1988, Doyle says.
The doctor’s attorney, Michael P. Koskoff, JD, says the jury verdict should be a warning to all residency programs that overwork residents and provide little supervision. That idea was endorsed by Bertrand M. Bell, MD, a professor at the Albert Einstein School of Medicine in New York, who headed a New York state commission in the late 1980s that led to stricter laws for medical resident training. In a public statement, Bell called the ruling a "landmark" decision that might improve the state of resident training at U.S. medical schools.
Reference
1. United States ex. rel Hearn v. Badrudin Kurwa et al., CV-96-7720.WDK.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content