Steven Plitt, Expert Witness Steven Plitt, Expert Witness
Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

Medical Malpractice Archives

YOU SHOULD HAVE KNOWN . . .

In Zavodnick, Zavodnick & Lasky, LLC v. National Liability and Fire Ins. Co., 2019 WL 1003157 (E.D. Pa. 3/1/19) the Pennsylvania court held that when a workers compensation board criticized the attorney's handling of the case, that a reasonable attorney would have known that a malpractice claim might be filed and therefore the professional liability policy's prior knowledge provision precluded coverage of a malpractice claim. 

COURT FINDS THAT A GOVERNMENT SUBPOENA SEEKING DOCUMENTS CONSTITUTED A CLAIM FOR NON-MONETARY RELIEF UNDER A D&O POLICY

The Texas court in Oceans Healthcare, LLC v. Illinois Union Ins. Co., 2019 WL 1437955 (E.D. Tx. 3/30/19) (appealed file), held that the subpoena alleged a wrongful act under the policy because the subpoena sufficiently alleged violations of the false claims act. The subpoena had sought documents "in connection with an investigation into . . . possible false claims act violations . . ." On other grounds the court held that the policy did not provide coverage. In this D&O case, the federal government issued a subpoena to the insured corporation seeking documents in a qui tam action, alleging that the corporation had submitted false and fraudulent payment claims to Medicare/Medicaid. The insured submitted a claim to its D&O insurer, seeking coverage for the expenses that the corporation incurred in responding to the government subpoena. The insurer denied the request for reimbursement, arguing that the government subpoena was not a "claim" inasmuch as the subpoena did not seek relief, but rather, sought information. The court rejected the insurer's argument, finding that the subpoena sought non-monetary relief under the policy. Under the D&O policy, a claim was "a written demand against any insured for monetary damages or non-monetary or injunctive relief." The policy did not define the term "relief."

COMPUTERIZED MEDICAL BILLING REVIEWS COMES UNDER SCRUTINY IN WASHINGTON

Recently, in Folweiler Chiropractic, PS v. American Family Ins. Co., 2018 WL 5729873 (Wash. App. 2018), the Washington Court of Appeals reinstated a class action lawsuit against American Family where the suit accused American Family of unfairly discounting medical payments based upon computerized databases which were used to determine the reasonable cost of medical services. It was alleged that American Family, based upon the computerized databases that were utilized, automatically disallowed medical bill charges that exceeded the 80th percentile amount for the relevant zip code. The suit alleged that this practice violated Washington's Consumer Protection Act (CPA), RCW 19.8.020. The medical provider, Folweiler Chiropractic, filed the putative class action lawsuit, contending that the automatic deductions were a violation of Washington's PIP statute, the Unfair Claims Settlement Practices Regulations, and the CPA. The case was initially dismissed, but the Court of Appeals reversed and reinstated the case.

OHIO COURT FINDS THAT PHYSICIAN'S SEXUAL RELATIONSHIP WITH A PATIENT DID NOT CONSTITUTE MEDICAL MALPRACTICE

In Beattie v. McCoy, 2018-Ohio-2535, 115 N.E.3d 867, the Court held that professional liability policies did not cover medical malpractice actions arising from a physician's sexual relationship with a patient. The policy in question provided coverage for defined "professional services." The policy defined "professional services" as "medical, surgical, dental, imaging, mental or other healthcare professional service or treatments . . . [and the] provision of drugs, healthcare supplies or appliances." Under the facts presented there was no obligation to provide coverage.

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