Colorado Healthlaw Blog

On December 27, 2011, the United States Supreme Court refused to hear Amgen's petition to review a lower court's decision rejecting its argument - intended to weaken the False Claims Act - by engrafting onto the FCA a requirement that there must be a federal regulation specifically prohibiting the payment of a particular claim before the FCA could apply. The drug company had argued that payment of claims should be left to the control of regulatory agencies and not the courts, an oft-cited argument by corporations accused of health care fraud. Amgen claimed that a split in the federal circuit courts on the issue of "implied certification" made this case one that the Court should accept.

Implied certification is a legal theory developed as a result of FCA defendants' position that, unless there is an express certification that a particular claim conforms with a particular law or regulation, there can be no 'false' claim, especially if CMS (or its fiscal intermediatry) goes ahead and pays the claim.

Fortunately, the Court, which takes only a small number of the petitions filed each year, has declined to hear this case. Although this case will now go back to the federal district court for trial or settlement, the arguments made here by Amgen will doubtless continue to be made in many other False Claims Act cases throughout the country.

A recent analysis of surgical error data from the National Practitioner's Data Bank (NPDB) confirms that most malpractice claims against surgeons involve "real errors" and "preventable errors."  Medscape reports that the analysis of surgical malpractice claims was undertaken by Dr. Ryan Orosco of the University of California at San Diego and colleagues and presented in October at the American College of Surgeons 97th Annual Clinical Congress.  Other major findings of the analysis were that malpractice payments varied widely from state to state and - as expected - the greater the degree of damage and disability the higher the payment.

Of the 58,518 claims reviewed, an incredible 15.2% resulted in the death of the patient, and 8.3% resulted in a "major permanent injury," such as paralysis, brain damage or the need for life-long care.  Another 18.2% sustained a "significant permanent injury."

Dr. Scott Regenbogen of the University of Michigan, who moderated the the session, said that contrary to the claims of many surgeons that malpractice claims do not accurately reflect the safety of surgical care, the analysis confirms what has been suggested in other large evaluations of malpractice claims that "most malpractice claims represent real errors and preventable errors." 

The median surgical malpractice payment was $132,915 and the 95th percentile claim payment was $983,263.  States with the highest payments were Illinois, Connecticut, Deleware and Wisconsin.  States with the lowest payments were Michigan, Kansas, South Carolina and Texas.  "Improper performance" of the surgical procedure was the most common allegation of malpractice (41.8%).  Other allegations included retained foreign bodies (6%), wrong body part surgeries (3.2%), unnecessary procedures (3%), improper technique (2.4%), lack of informed consent (2.3%) and failure to recognize a surgical complication in a timely fashion (2%).

Visit our Surgical Errors page for more information on surgical malpractice cases.

Health Care Fraud

The latest in the health care fraud and abuse saga - a bold attempt to legalize  kickbacks. Drug maker Amgen is attempting to get the United States Supreme Court to rule that certain kickbacks in the drug industry are entirely legal. Amgen has petitioned the Court to hear a case where it is accused of providing physicians with free supplies (overfill) of its injectable drug, Aranesp. The physicians bill Medicare and Medicaid for the drugs even though they were provided free of charge by Amgen, so the sample drugs provide a financial incentive to prescribe Aranesp, which seems to be precisely the reason that Congress passed the AntiKickback Statute. Amgen, however, is appealing on "technical" grounds, asserting that claims are not fraudulent if the payor (CMS, or the fiscal intermediary acting on its behalf) goes ahead and pays them anyway, or, alternatively, that the payments don't violate AKS unless a specific federal regulation expressly prohibits the payment. Amgen is counting on a conservative Supreme Court that is loath to 'burden' the business world with unnecessary regulation. However, the AKS is not merely regulatory, it creates a criminal offense, and is intended to keep drug companies from influencing a health care provider's choice of treatment plans. It remains to be seen if the Court will accept this appeal. (The Supreme Court only accepts a very small percentage of certiorari petitions.) But stay tuned - Amgen has come equipped with the usual top flight legal talent experienced in defending allegations of health care fraud. For more on this subject, see our current article in Health Care Fraud news.

Justice reared its ugly head in Colorado this week when the Supreme Court reinstated a $10M verdict in favor of a truck driver who suffered severe injuries when she slipped on grease while making a delivery to a Walmart in Greeley.  Walmart's conduct in the case was depressing but not unexpected.  It denied the existence of the grease spill, implying that the plaintiff had made it up.  Walmart's lawyer even told the jury in opening statement that there was no grease spill.  Unfortunately for Walmart, while its lawyer was denying the existence of the grease, someone was emailing to plaintiff's counsel a city of Greeley investigative report of the grease spill and its subsequent cleanup.  Next day, plaintiff's attorney called a Walmart representative to the witness stand and questioned her in a way that caused Walmart's crack legal team to suspect that he had a document that might establish the existence of the grease.  Once Walmart's lawyers saw the report, they changed their position regarding the grease, admitted it was there, but continued to deny responsibility.  Big mistake.  The jury's verdict of $10M was one of the biggest, if not the biggest, slip and fall verdict in Colorado history.

Well, Walmart didn't like the verdict and asked the judge to overturn it, claiming that plaintiff's counsel should have given Walmart's lawyers the investigative report immediately instead of waiting until after the Walmart representative had taken the stand and denied the existence of the grease spill.  Somewhat surprisingly, the trial judge agreed and ordered a new trial.  Plaintiff's attorneys took a Rule 21 petition to the Supreme Court, which is a way to get the Supreme Court to review a trial judge's ruling right away instead of going through the usual appeal process.  The Supreme Court reinstated the jury's verdict, holding that because the investigative report was a public document equally available to both sides, plaintiff's counsel did not have a duty to disclose the document to Walmart's lawyers. 

This case may have far reaching effects.  Colorado has broad discovery provisions requiring each side to turn over all relevant documents in their possession.  The Supreme Court has carved out a major exception to the disclosure requirements for documents that are in the public domain and equally accessible to both sides.  Walmart is probably working on a strategy of calling all of its documents public.