Thursday, February 26, 2009

Physician Charged With Misdemeanor: Case Study

One of the best teaching tools in law and business is to look at actual case studies. In representing professionals, they may learn more from someone else’s mistakes about what can go wrong when there is not a forward looking and comprehensive strategy. This particular example is an actual case. It illustrates how one or two wrong moves can snowball into a series of problems. The point is to learn from this and even though a client’s case may be very different, some of the same basic principles apply.

Dr. X came to our office. He was a board certified OB-GYN. He came to us with a series of problems that needed to be unwound and solved after making two years of uninformed decisions. His biggest problem was that the hospital wanted to revoke his privileges which would destroy his practice. Here is his story.

The Misdemeanor Vandalism Case

Dr. X got into an altercation over a parking space at an amusement parking lot while he was with his family. After he left his car and went into the park, the other person called the local police and accused Dr. X of vandalizing his car. Dr. X was subsequently charged with the misdemeanor charge of vandalism. Dr. X denied the vandalism and wanted to fight it. Dr. X was very busy and the charges were pending in Orange County far from his office and home. Dr. X hired a criminal attorney from the phone book. This attorney was young and had little experience representing professionals who could be have serious consequences from a misdemeanor conviction.

After failing to have the case dismissed, the case was set for trial. Dr. X did not want to miss several days or a week of work going to court and being in trial so he told the attorney to settle the case. The attorney told Dr. X it was a good deal, there would be no jail time, a small fine and that the case would be expunged after the summary probation was completed. The attorney never tried to settle with the complainant or reach a civil compromise. Instead, Dr. X plead “no contest” to a misdemeanor which has the same force and effect as a guilty plea. Dr. X thought that was the end of it.

The Medical Board Gets Involved

Dr. X did not report the misdemeanor conviction to the Medical Board. He did not think that he had to do so. The court reported the conviction. One day, a Medical Board investigator appeared at Dr. X’s office. Dr. X spoke to the investigator without having an attorney present. The investigator asked about the vandalism incident. The investigator did not believe Dr. X’s version of events and took the "no contest" plea as an admission. The investigator decided that Dr. X was not being honest. The investigator referred the case to the Attorney General’s Office who filed an Accusation against him accusing him of unprofessional conduct including allegations that he lied to the investigator about the criminal case. Dr. X hired an attorney who his insurance carrier chose and with whom he did not have any pre-existing relationship. The insurance company’s attorney told Dr. X to simply accept probation as part of the settlement before the Medical Board and that it would not have any effect on his hospital privileges.

They Forgot About Dr. X's Expired New York License

Dr. X did his residency in New York and had a license there that he had never surrendered. The attorney who represented Dr. X before the Medical Board did not analyze what effect, if any, having a New York license would have or what would happen to that New York license. It was never discussed with Dr. X. If the issue had been analyzed, Dr. X could have surrendered his New York license early on before there was an Accusation filed in California. This obviously was not done.

Once California put Dr. X on probation, New York issued a notice to Dr. X indicating that because his California license was on probation, New York was going to put his New York license on probation. The problem is that because Dr. X was not practicing in New York he could not comply with probation. Dr. X decided, without the advice of counsel, that because he was not going to practice in New York he would agree to have New York suspend his medical license.

How Does This Affect Dr. X's Medi-Cal Provider Number?

Dr. X’s patients were almost entirely private pay. After New York suspended Dr. X’s New York license, Dr. X received a letter from Medi-Cal. Medi-Cal informed him that because another state had suspended his license, they were going to automatically suspend his Medi-Cal provider number. Dr. X discussed this issue with his office manager. Dr. X did not hire an attorney or even call one for a 15-minute quick consultation. Dr. X and his office manager decided that since they did not see Medi-Cal patients, it was not worth appealing or spending the time on this issue.

What Happens Now To Dr. X's Hospital Privileges?

After Medi-Cal suspended Dr. X’s provider number, Dr. X received a letter from the hospital. The letter stated that because he had been suspended by a federally funded health care program, its bylaws required that his privileges be suspended. The hospital was very supportive of Dr. X, considered him an excellent practitioner and did not want to take any action against him.

At this point, the hospital referred Dr. X to our office. We filed an appeal from Medi-Cal’s suspension on the ground that the New York suspension was based solely upon the California Medical Board’s imposition of probation – which in itself was not a ground for Medi-Cal to suspend Dr. X’s provider number. In addition, we obtained a stay from the hospital and wrote a detailed letter explaining how these circumstances arose. We further worked with the hospital while they sought to revise the bylaws in order to keep Dr. X on staff. Ultimately, we reached a settlement with Medi-Cal and obtained his reinstatement since on occasion Dr. X might see a Medi-Cal beneficiary in the emergency room when he was on call.

Lessons To Learn

1. There is no such thing as a small criminal case for licensed professionals. Even if a criminal case seems small and completely unrelated to the practice of medicine or your profession, you need to understand that there is a form of double jeopardy when it comes to the licensing boards. “Moral turpitude” is a broad term and it is important to treat even misdemeanor cases aggressively and avoid a conviction at all costs. The cost of an excellent legal defense is small in comparison to the potential lost income over the years.

2. In criminal cases, the license "tail" often wags the dog. Even experienced criminal defense attorneys are not knowledgeable about the collateral consequences that can occur to a professional’s license. A great plea bargain in a criminal case can still be a “bad” deal for a professional if there are elements of fraud in the count. For example in Dr. X’s case, an early attempt to pay a civil settlement and obtain a civil compromise might have resulted in the dismissal of the case. Even if Dr. X did not vandalize the other party’s car, it would have been in his best interest to obtain a certain result that could not have any adverse impact on his license.

3. Analyze all licenses, contracts and privileges and potential effects of a criminal conviction on them. In analyzing the licensed professional’s exposure, the attorney needs a list of all licenses in all states. The licensed professional and the attorney need to work out the goals, prioritize them and consider every possible consequence. It is important to be able to make the best decision at the moment but also look ahead and anticipate what can flow from decisions made in the criminal case.

4. Consider involving the Board at an early stage. This is often an excellent approach in order to have “damage control” and show that the licensed professional is honest and forthcoming. If Dr. X's attorney had contacted the Board, reported the arrest, and sent a letter of representation, an investigator would not have made a surprise visit to Dr. X. Dr. X was not prepared for the interview, he came off as defensive and made a poor first impression. Often a misdemeanor conviction will not result in probation but it needs to be negotiated to the extent possible and seeking the coordination and cooperation of all involved (alleged victim, prosecuting agency, etc.) makes it easier. Often, the licensed professional fails to self-report and this does not lead to a favorable impression.

5. Your provider numbers are important. Anytime a governmental health care program is taking administrative action like a suspension against a licensed provider, it is important. Most hospitals have emergency rooms and take Medicare and Medi-Cal. In addition, Medi-Cal is the insurer of last resort and what appears to be a private patient in a hospital can turn into a Medi-Cal patient if the insurance is cancelled or lapsed.

6. Hire a specialist. Who would hire a surgeon that operates on 3 different body parts? This area of law requires an attorney who specializes. Resist the temptation to use your real estate or family law attorney to handle the licensing board. If you have a relationship with an attorney you trust, let that attorney bring in the specialist attorney to assist him or her. With business and regulatory work becoming increasingly complex it is not unusual to use a team approach. Specialists in these areas also have relationships with the governmental agencies and know best the tactics that work with them. Be prepared to pay for quality and watch out for someone who charges a low flat fee since it may be that they do not plan on doing much work. A lengthy professional board hearing with expert witnesses can be costly. We have worked on cases, however, where the client stood to lose millions of dollars over their lifetime if they lost the licenses and the investment of legal fees which saved or minimized the damage to their licenses was an important and excellent investment.

7. Be prevention-minded. If an issue arises regarding your business or license – even it seems small – call a lawyer. Particularly where there is a judgment call and it involves the government or a disgruntled client, patient or employee. Having objective and expert advice is important. The cost of a consultation will save significant amounts at the end of the day. Clients’ legal bills are significantly higher when they call too late or after the fact. Good lawyers who value their clients – such as our firm – would much rather prevent problems than clean them up. Professionals who know when to make a quick call to their lawyer are the best type of client and they keep their legal fees down in the long run. We seek long-term relationships with clients where we work on keeping them compliant with law, rules and regulations and simultaneously prevent litigation and other costly legal issues. This is simply sound risk management.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles. They focus their practice on the representation of professionals, particularly health care professionals and providers, including individual physicians, corporate providers and group practices in criminal, civil and administrative cases.


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