New York - Volume XII, Number 11 - November, 2003


KERN AUGUSTINE CHALLENGES THE INSURANCE INDUSTRY�S ROLE IN SUFFOLK COUNTY DISTRICT ATTORNEY�S INSURANCE FRAUD PROSECUTIONS

Appearing on behalf of several physicians already indicted in Suffolk County upon charges of insurance fraud and other related crimes, Kern Augustine has taken the unusual step of filing a Freedom of Information Act request in an effort to further investigate any possible financial links between the insurance industry and the District Attorney�s ongoing investigation. The firm�s investigation has revealed that an insurance industry funded entity, the National Insurance Crime Bureau (�NICB�), is the driving force behind the investigation and that NICB has provided personnel as well as logistical and technical support to the office of the District Attorney. Kern Augustine�s �FOIA� demand seeks disclosure of all information relating to what may be an unprecedented alliance between the insurance industry and law enforcement. Kern Augustine has also brought motions to dismiss the various indictments, asserting that the link between the crimes charged and Suffolk County is too weak to support the theory of jurisdiction posited by the prosecution. If successful, the motions may result in the outright dismissal of these and dozens of other cases. Check STATLAW for further developments.

UNITED STATES SUPREME COURT TO DETERMINE WHETHER MANAGED CARE COMPANIES MAY BE SUED FOR MALPRACTICE

In a case of potentially great significance for providers, their patients and managed-care companies alike, the United States Supreme Court has agreed to decide whether HMOs may be sued for damages for refusing to cover necessary medical treatment. The court agreed to hear appeals brought by two managed-care companies that do business in Texas, where state law provides for compensatory and punitive damages against HMOs for coverage decisions that are found to amount to malpractice. The court must determine whether such lawsuits conflict with the Employee Retirement Income Security Act of 1974 (�ERISA�) and are, therefore, barred by federal law.

COURT STRIKES DOWN POLICY AUTHORIZING DISCLOSURE OF DISMISSED CHARGES OF PHYSICIAN MISCONDUCT

In a stinging rebuke to the New York State Commissioner of Health, the Appellate Division of the New York State Supreme Court in Manhattan has held that the State Board of Professional Medical Conduct (�BPMC�) is prohibited from publishing on its website, information pertaining to allegations of misconduct that had actually been dismissed by a Hearing Committee of the Board. The physician involved had been charged with a variety of serious allegations of misconduct. Following an evidentiary hearing, all of the serious charges were dismissed and the Hearing Committee sustained a single allegation pertaining to record keeping. BPMC, relying on the notion that "[a]ll disciplinary orders are public upon final disposition�, published both the proven and unproven allegation on its website. The Court held that BPMC had �utterly failed to explain why any reasonable person would credit dismissed allegations� and ordered that all references to dismissed charges be removed from the website.

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