AHLA's Speaking of Health Law

The Lighter Side of Health Law – March 2019

March 28, 2019 AHLA Podcasts
AHLA's Speaking of Health Law
The Lighter Side of Health Law – March 2019
Show Notes Transcript

AHLA's monthly podcast featuring health lawyer and blogger Norm Tabler's informative and entertaining take on recent health law and other legal developments. Sponsored by Coker Group.

To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.

Speaker 1:

Hi, I'm Norm Tablo, host of the A H L A podcast series, the Lighter Side of Health Law, sponsored by Coker Group. I hope you enjoyed this month's edition, an expensive way to Save Money, a Diagnostic Imaging Center in Carmel, Indiana. Incidentally, my hometown has found a truly expensive way to save a buck. You can read about it. In a recent Seventh Circuit opinion, the center was sued for malpractice arising from an alleged failure to detect cancer in one of its patients. Back in 2009, the jury came back with a 15 million verdict. 15 million. Normally in Indiana, there would be less to that than meets the eye because Indiana has long had the nation's lowest med mal cap. For an incident that occurred in 2009, the cap was are you sitting down$250,000? That's right,$250,000. But to qualify for the cap, a provider has to register and pay a registration fee, which is a surcharge of the provider's malpractice premium. This is where the imaging center saved money. It did not register. That meant that the cap did not apply to it. So instead of being on the hook for$250,000, it's liable for the entire$15 million. But hey, it didn't have to pay that registration fee. The case is Webster versus C D I, Indiana Seventh Circuit. When your drug testifies against you, here's something you don't often see. In a drug racketeering trial in Boston, the drug testified against the defendants. That's right. The drug testified not only that, the testimony was in song wrapped. To be precise, five former executives of ISIS therapeutics are charged with racketeering in connection with sales of the highly addictive opioid fentanyl. At the trial, prosecutors played a video of a six foot tall bottle of Fentanyl spray dancing and singing the praises of fentanyl. The song included lines like this. You think you're bad? Well, I'm the baddest I was created in a lab in the land of the cactus. The chorus was a salute to titration, a process to quickly increase dosages. It went, I love titration. Yeah, it's not a problem. I got new patients and I got a lot of'em. The video was produced for the company's 2015 National Sales Conference. If you want to hire the man in the Fentanyl costume for your next party, he's Alec Burakoff, former VP of Marketing, for instance. But Alec won't be available for a while because he's pleaded guilty to racketeering. One more reason. People don't like lawyers. One reason people don't like lawyers is that lawyers see and and argue over differences that non-lawyers can't see and don't care about distinctions without a difference they call him. Here's a double example. The Kentucky Supreme Court addressed the issue of whether a hospital had taken a professional review activity or a professional review action. Did you hear the difference? Professional review activity or professional review action. When the hospital restricted Dr. Ben Reed's privileges, he sued the hospital, invoked the healthcare quality improvement Acts immunity for

Speaker 2:

A a professional review activity. The court agreed and granted the hospital's motion for judgment on the pleadings. When Ben appealed, the Court of appeals reversed ruling that the hospital had taken a professional review action, not a professional review activity. Guess which side of the activity versus action debate? The Kentucky Supreme Court chose neither one. It ruled that both courts were wrong. They had treated the hospital's motion for judgment on the pleadings, like a motion for summary judgment by considering matters outside the pleadings, which you can do for a motion for summary judgment, but not a motion for judgment on the pleadings. So the case had to go back to the trial court to start all over with everyone deciding whether they're dealing with a motion for judgment on the pleadings or motion for summary judgment in deciding whether it was a professional review activity or a professional review action. Maybe the non-lawyers are right about us. The case is Kentucky One Health versus Reed Kentucky Supreme Court. The 42 million late fee. I don't know about you, but I pay attention to late fees. Even my local library's late fee helps prod me to return the audiobooks on time. But apparently the people at Providence, Alaska Med Center, p a EMC aren't like me. They just racked up a late fee of 42 million. That's right, a 42 million late fee. It was June, 2015 when the DOJ subpoenaed p a EMC in connection with a whistleblower action. It was February, 2017 when p a EMC paid 42 million to settle the case. Two months later, in April, 2017, p a EMC notified National Union it's liability insurer that Oh yeah. There's this claim we learned about back in June, 2015 and you owe us 42 million. The National Union policy had an annual term running from March to March with a new policy issued each year. It was a claims made and reported policy as distinguished from a claims made it covered only claims made and reported within the policy gear. Plus 90 days National Union declined coverage pointing out that p a EMC learned of the claim during the 2015 2016 policy year. That policy didn't cover any claim that was not reported during the policy term plus 90 days. So PA EMC's notice was about one year overdue when PA EMC sued the court sided with National Union rejecting PA EMC's argument that all the annual policies should be treated as one long multi-year policy. I can't for the life of me understand waiting two years to notify an insurance company of a multi-million dollar claim. But then again, I worry about library late fees. The case is p a EMC versus National Union Insurance, central District California Xeroxes and Rubber Stamps. Did you know that Xerox was in the rubber stamping business? That's what the state of Texas alleged in its lawsuit against the company. And although Xerox insisted didn't do any rubber stamping, it still

Speaker 3:

Paid Texas 236 million to make the suit go away. Texas hired a company later acquired by Xerox to evaluate applications for dental procedures funded by Medicaid. The company was supposed to hire dental professionals to review applications to determine whether they were medically necessary, but Texas says the company merely rubber stamped the applications with some employees approving several hundred a day. As a result, purely cosmetic applications got approved along with the medically necessary. Texas and Xerox signed a 236 million settlement agreement with Xerox not admitting liability, but the litigation is not over for either side. Texas has sued the Dennis and Orthodontists who allegedly submitted claims they knew were not medically necessary. Meanwhile, Denniss and orthodontists have sued Xerox on the theory that it was Xerox's negligence that made them look bad and caused Texas to sue them. Maybe the Texas bar should give Xerox a gold plated rubber stamp for all the business that's providing them a fireman's day off. Did you ever wonder what firemen do on their days off? Most firemen work in 24 hour shifts on average 10 a month. That gives them about 20 days off each month. We know from a court case how one New Jersey fireman spent his days off. According to court documents, fireman Michael Scher spent his time recruiting public employees to provide their insurance information so that he could write prescriptions for compounded medications on pre-printed prescription forms and send them all to a single pharmacy. Why public employees? Because their health plans paid the most. Why compounded medications? Because they're the most expensive. Why would doctors sign the prescription forms without even seeing the so-called patients? Because Michael bribed them. Why that one pharmacy? Because it paid Michael a percentage of its receipts for the prescriptions on his own. Michael generated over$7 million in payments to the pharmacy. All told the conspiracy generated a cool 50 million. Michael's kickbacks came to over$1.7 million. Not bad for 16 months of part-time work. Sadly for Michael, he got caught and became the 16th conspirator to plead guilty. He faces 10 years in jail. The case is US versus Sher and the US District Court for New Jersey. Well, that's it for this month's edition of the Lighter Side of Health Law. I hope you enjoyed it. Check your A H L A Weekly and Connections magazine for the next edition.