Justia Professional Malpractice & Ethics Opinion Summaries

Articles Posted in US Court of Appeals for the Sixth Circuit
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Ace, a licensed physician, and Lesa Chaney owned and operated Ace Clinique in Hazard, Kentucky. An anonymous caller told the Kentucky Cabinet for Health and Family Services that Ace pre-signed prescriptions. An investigation revealed that Ace was absent on the day that several prescriptions signed by Ace and dated that day were filled. Clinique employees admitted to using and showed agents pre-signed prescription blanks. Agents obtained warrants to search Clinique and the Chaneys’ home and airplane hangar for evidence of violations of 21 U.S.C. 841(a)(1), knowing or intentional distribution of controlled substances, and 18 U.S.C. 1956(h), conspiracies to commit money laundering. Evidence seized from the hangar and evidence seized from Clinique that dated to before March 2006 were suppressed. The court rejected arguments that the warrants’ enumeration of “patient files” was overly broad and insufficiently particular. During trial, an alternate juror reported some “concerns about how serious[ly] the jury was taking their duty.” The court did not tell counsel about those concerns. After the verdict, the same alternate juror—who did not participate in deliberations—contacted defense counsel; the court conducted an in camera interview, then denied a motion for a new trial. To calculate the sentencing guidelines range, the PSR recommended that every drug Ace prescribed during the relevant time period and every Medicaid billing should be used to calculate drug quantity and loss amount. The court found that 60 percent of the drugs and billings were fraudulent, varied downward from the guidelines-recommended life sentences, and sentenced Ace to 180 months and Lesa to 80 months in custody. The Sixth Circuit affirmed, rejecting challenges to the constitutionality of the warrant that allowed the search of the clinic; the sufficiency of the evidence; and the calculation of the guidelines range and a claim of jury misconduct. View "United States v. Chaney" on Justia Law

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The Debtors filed their bankruptcy petition in 2008. Grusin provided them legal advice before the filing and at the beginning of the bankruptcy case. Fullen filed the petition and represented them in the chapter 7 case. In 2011, the bankruptcy court granted the Trustee summary judgment in an adversary proceeding seeking to deny the Debtors’ discharge and disqualified both lawyers from further representation of the Debtors in that case. The Debtors hired new counsel, who obtained relief from the summary judgment order. Following a trial, in 2015, the bankruptcy court again denied the Debtors’ discharge. The Bankruptcy Appellate Panel affirmed. In 2012, the bankruptcy court granted CJV derivative standing to pursue a malpractice action on behalf of the estate against Grusin and Fullen. Malpractice complaints were filed in the bankruptcy court and in Tennessee state court. In 2014, CJV filed another adversary proceeding, seeking declaratory relief that the malpractice claims constituted property of Debtors’ estate. The Bankruptcy Appellate Panel affirmed the bankruptcy court in holding that the malpractice action for denial of debtors’ discharges based on errors and omissions contained in a bankruptcy petition, as well as pre and post-petition legal advice, was not property of the debtors’ bankruptcy estate. There was no pre-petition injury; the Debtors were injured by that negligence when their discharges in bankruptcy were denied. View "In re Blasingame" on Justia Law

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Dr. Paulus, a cardiologist at Ashland, Kentucky’s KDMC, was first in the nation in billing Medicare for angiograms. His annual salary was around $2.5 million, under KDMC’s per-procedure compensation package. In 2008, HHS received an anonymous complaint that Paulus was defrauding Medicare and Medicaid by performing medically unnecessary procedures, 42 U.S.C. 1320c-5(a)(1), 1395y(a)(1), placing stents into arteries that were not blocked, with the encouragement of KDMC. An anti-fraud contractor selected 19 angiograms for an audit and concluded that in seven cases, the blockage was insufficient to warrant a stent. Medicare denied reimbursement for those procedures and continued investigating. A private insurer did its own review and concluded that at least half the stents ordered by Paulus were not medically necessary. The Kentucky Board of Medical Licensure subpoenaed records and concluded that Paulus had diagnosed patients with severe stenosis where none was apparent from the angiograms. Paulus had retired; he voluntarily surrendered his medical license. A jury convicted Paulus on 10 false-statement counts and on the healthcare fraud count. It acquitted him on five false-statement counts. The court set aside the guilty verdicts and granted Paulus a new trial. The Sixth Circuit reversed. The degree of stenosis is a fact capable of proof. A doctor who deliberately inflates the blockage he sees on an angiogram has told a lie; if he does so to bill a more expensive procedure, then he has also committed fraud. View "United States v. Paulus" on Justia Law

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In 2010, Dr. Menendez treated 15-year-old Garber for a fever, constipation, and back pain. Garber became a paraplegic. The state court dismissed Garber’s initial lawsuit because he failed to file an affidavit from an expert witness in support of his claim. In his second lawsuit, Garber tried to serve Menendez at his Ohio office, but (unbeknownst to him) Menendez had retired to Florida. Garber voluntarily dismissed the lawsuit. Garber sued Menendez a third time in May 2017 and properly served him. Ohio provides a one-year statute of limitations for medical malpractice claims, Ohio Rev. Code 2305.113, which began running on August 5, 2013, when Garber turned 18. Garber argued that Ohio tolls the statute of limitations when the defendant “departs from the state.” The Sixth Circuit reversed the dismissal of the suit. The court rejected an argument that the statute’s differential treatment of residents and non-residents violates the dormant Commerce Clause by disincentivizing individuals from leaving Ohio and offering their services (or retirement spending) in other states. The Ohio tolling provision does not discriminate against out-of-state commerce any more than many other policy benefits reserved for residents of a given state, including the existence of an estate tax for Ohioans but not for Floridians. View "Garber v. Menendez" on Justia Law

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Harold Persaud, M.D., a cardiologist in private practice, was charged with one count of health-care fraud, 18 U.S.C. 1347, 14 counts of making false statements relating to health-care matters, 18 U.S.C. 1035, and one count of money laundering, 18 U.S.C. 1957. The grand jury also returned a forfeiture finding, requiring Persaud to forfeit all property linked to the charges, including $343,634.671 seized from bank accounts associated with Persaud and his wife. At trial, the government presented 34 witnesses, including 11 physicians, eight patients, and four nurses. The defense relied on five witnesses, including an expert cardiologist, two referring physicians, and a coding expert. The jury convicted Persaud on all charges, except for one false-statement count. The jury concluded that the $343,634.67 seized from the Persauds’ bank accounts was forfeitable; the $250,188.42 seized from Persaud’s wife’s account was related to his money-laundering conviction; and Persaud’s scheme generated gross proceeds of $2,100,000. The district court sentenced Persaud to 20 years of imprisonment, a $1,500 special assessment, and restitution of $5,486,857.03, which consists of money damages to be paid to Persaud’s patients, their private insurers, and the government. The Sixth Circuit affirmed. The jury was entitled to accept the view of the government’s experts over those of Persaud’s experts. View "United States v. Persaud" on Justia Law