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APPELLATE COURT HEARS CHALLENGE TO ATTORNEY GENERAL SPITZER’S JURISDICTION TO PROSECUTE INSURANCE FRAUD

In a lawsuit brought in defense of several physicians and professional medical corporations targeted for criminal prosecution, Kern Augustine has raised a unique challenge to Attorney General Elliot Spitzer's jurisdiction to prosecute insurance fraud. During a spirited argument before the Appellate Division of the New York State Supreme Court earlier this month, Douglas M. Nadjari, director of Kern Augustine’s white-collar criminal defense practice group, argued that the Executive Order upon which the indictments are premised, grants jurisdiction to investigate such maters civilly and that the indictments obtained by the Attorney General constitute an unconstitutional “arrogation of power” that warrants dismissal. The decision is likely to have wide-reaching effect and may determine the fate of dozens of similar indictments brought against physicians and medical managers. A decision is expected in four to six weeks. In the interim, the Attorney General will continue to aggressively investigate No-Fault insurance fraud cases. If you are contacted by law enforcement officials or insurance investigators, feel free to contact Kern Augustine for guidance.

NEW YORK LEGISLATURE CONSIDERS EXPANSION OF MALPRACTICE LIABILITY

A bill recently introduced in the New York State Senate would remove the present bar on jury awards for non-economic damages in wrongful death actions and expand present liability laws to permit the award of money damages for emotional damages to the surviving relatives. In a separate bill, lawmakers have proposed eliminating the current statutory limitation on contingent fees awarded to trial lawyers in malpractice cases. Liability experts fear that, if passed, these bills would lead to a dramatic increase in the number of malpractice cases filed each year and a further increase in malpractice premiums.

NATIONAL HEALTH INFORMATION NETWORK CALLED FOR BY BUSH ADMINISTRATION

In an effort to reduce the incidence of human error attendant to the delivery of health care services, a group of health and information technology organizations recently presented the Bush administration with its recommendations for a national health information network. The group suggested that all medical records created by physicians’ offices should be maintained in an electronic format that would permit access to them by hospitals, laboratories, specialists, insurers and researchers. However, the report specifically advocated against creating a central database of patient records or the issuance of individual "health ID cards.” It was further recommended that the federal government provide some initial financing and promulgate basic technical standards.

REGISTRATION TO RECEIVE FORGE PROOF PRESCRIPTIONS BEGINS

Effective April 19, 2006, physicians in New York State will be required to utilize new “forge proof” prescription forms. Physicians must register to receive the new prescription pads and may do so by calling the New York State Department of Health at (866) 811-7957.

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