Jury finds HMO carriers negligent for supervision of doctor, awards $524 million

Text Size

Share this page on any of these social networking sites:
Share this page on any of these social networking sites: LinkedIn

 

Advertise with Trial

Stand out from the crowd! Advertise in Trial  to reach a national audience of major decision-makers who are looking for products and services to improve their legal practices.

Learn more »

Top Story

May 2, 2013

Jury finds HMO carriers negligent for supervision of doctor, awards $524 million 

Alyssa E. Lambert

A jury sided with two plaintiffs who contracted hepatitis C from contaminated anesthetic propofol vials used during colonoscopies. Two UnitedHealth Group, Inc., subsidiaries were held liable for failing to properly monitor a gastroenterologist they hired for their HMO network.

A jury awarded $524 million, including $500 million in punitive damages, to two plaintiffs who contracted hepatitis C from contaminated anesthetic propofol vials used during colonoscopies at a Nevada clinic in 2007, making it the largest U.S. verdict this year, according to Bloomberg. Two UnitedHealth Group, Inc., subsidiaries were held liable for failing to properly monitor gastroenterologist Dipak Desai, whom they hired for their HMO network, and the clinic he owned and operated. (Meyer v. Health Plan of Nevada, Inc., No. 09A583799 (Nev., Clark Co. Dist. Apr. 9, 2013).)

Helen Meyer and Bonnie Brunson both contracted hepatitis C when they underwent colonoscopies at one of Desai’s Las Vegas-area endoscopy facilities. He and his staff allegedly reused propofol vials and syringes and failed to sterilize equipment between patients. The jury found that Health Plan of Nevada and Sierra Health Services were negligent in failing to properly monitor Desai’s performance, awarding $24 million in compensatory damages—$12 million to Brunson, $3 million to her husband for loss of consortium, and $9 million to Meyer. A week later, the jury ordered the carriers to pay $270 million and $230 million in punitive damages.

Meyer and Brunson brought lawsuits in Nevada state court in 2009 and 2010, which were later consolidated, alleging that the two insurance carriers violated a Nevada law that requires HMOs to file annual reports showing their officials reviewed the quality of health services provided to their members. At trial, the plaintiffs argued that UnitedHealth officials knew Desai had a reputation for sloppy practices and failed to check the quality of his work, with witnesses testifying that the doctor would see as many as 20 patients in a three-hour period. The infected patients argued that despite these practices and complaints of failures to diagnose cancer and Crohn’s disease in several patients, as well as hygiene problems at the clinic, the insurance carriers awarded Desai a contract to handle colonoscopies and later renewed the contract.

This was the first trial against UnitedHealth divisions over the 2007 outbreak in which Nevada officials were forced to notify more than 50,000 patients that they may have contacted hepatitis C or another bloodborne disease. Most of the cases against Teva Parenteral Medicines, Inc., the maker of propofol, and Baxter Healthcare Corp., the drug’s distributor, were resolved either through trial or settlement. Three juries handed down more than $750 million in punitive damages against Teva for its decision to sell the anesthetic in oversized vials that invited reuse, as previously reported in the Products Liability Law Reporter. Teva also paid more than $250 million to settle more than 80 lawsuits over propofol sales.

Las Vegas attorney Patti Wise, who represented some of the plaintiffs suing Teva, said that the large punitive damages awards in all these cases indicate the level of harm the plaintiffs suffered. “In each trial, overwhelming evidence was presented to show that each responsible defendant—drug companies and HMOs—had prior knowledge/foreseeability of the unsafe practices of the physicians or their ability to misuse single-dose vials of propofol,” she said. “None of the defendants took any steps to prevent the unsafe practices that resulted in the spread of hepatitis C throughout the Las Vegas community. Instead, they placed profit over patient safety.”

Some news reports indicate the Meyer verdict may have been surprising, but suing HMO carriers for negligence is not a novelty in medical malpractice cases. When health insurance companies employ their own managed care doctors through HMOs, liability is always possible—and that was the case here, said Coral Gables, Fla., attorney Ervin Gonzalez.

“I think they [HMO carriers] are going to be a lot more careful and provide better quality control and better supervision, and in some cases have less managed care doctors and facilities to limit the potential for liability,” he said.

Gonzalez, who has represented plaintiffs in lawsuits against U.S. Department of Veterans Affairs hospitals after they contracted bloodborne diseases through dirty colonoscopy equipment, said that the $500 million punitive damages award has sent a message to insurance carriers and other defendants in similar cases. “It’s going to increase the settlement value of these cases,” he said. “Down the road, I hope it will result in better patient care and stricter quality control. Being reckless and grossly disregarding the interests of patients will not be tolerated by society.”

The defendants plan to appeal.


The American Association for Justice
777 6th Street, NW, Ste 200 • Washington, DC  20001 • 800.424.2725 or 202.965.3500

© 2014 AAJ