What are the potential penalties for fraud?
The Medical Practices Act empowers the Board of Medical Examiners to investigate “fraud, deception, false pretense” or other “dishonesty” and punish such acts by fines, temporary suspension or permanent revocation of license as well as other penalties.[5] Roughly 60 to 80 doctors lose their license each year for misconduct including fraud. Heavy fines and costs are
also imposed by the Board of Medical Examiners.[6]
Can a patient sue a doctor for fraud based on a post-surgical discussion?
On June 25, 2007 the Supreme Court of New Jersey decided Liguori v. Elmann, et al.
Therein a cardiac surgeon performed a successful quadruple bypass on a 71 year old woman. She later suffered a collapsed lung. The attending surgeon, in the midst of another bypass, sent an assistant surgeon to insert a chest tube. The assistant inserted the tube but unknowingly lacerated the heart. The attending’s partner later explored the patient in the operating room, repairing a small hole in the left ventricle. The partner told the attending that the chest tube was the cause of the hole he repaired. The patient was unconscious but stable. The attending testified he told the patient’s family these facts. He noted the event and its cause, but not the notification, in the chart. The family claimed they were not told of the collapsed lung or chest tube insertion but only that a “small bleeder” had occurred and was repaired. The family claimed that if they had been told “the truth” they would have transferred their mother from this “unsafe environment” and would have had a better chance of preventing her death two months later from complications including a deep, infected bedsore and sepsis which occurred after the chest tube injury.
The patient’s family sued the assistant surgeon for negligence in his insertion of the chest tube, claiming it ultimately caused the patient’s death. They also sued the attending cardiac surgeon for fraud based on his alleged misrepresentation to the family regarding the cause and extent of injury to their mother, alleging this contributed to her death. The trial judge dismissed the fraud claim but permitted plaintiffs to sue the attending for lack of informed consent to the continuation of care by the defendants based on plaintiffs’ contention that information material to their choice of health care provider was not given them by the attending. The jury found unanimously in favor of the attending cardiac surgeon on the informed consent claim and also in favor of the assistant surgeon on the negligence claim. Plaintiffs appealed but the jury’s verdict was sustained by the Appellate Division and by the Supreme Court of New Jersey.[7]
The Court declined to create a common law “fraud or deceit based cause of action” against physicians for an alleged post-surgical misrepresentation. However, the basis for this decision was the absence of any harm to the patient from the alleged fraud of the attending which was “separate and distinct” from the harm resulting from the allegedly negligent chest tube insertion by the assistant. Other states, including New York, permit claims against physicians for post-surgical fraud where injuries resulting from the fraud are “separate and distinct” from the harm resulting from negligence.[8] The New Jersey Supreme Court did not say how it would decide a case in which there were injuries from the alleged fraud which were “separate and distinct” from the injuries attributed to the alleged negligence. Therefore patients’ attorneys will be actively seeking such a case to bring before the Court in the hope of expanding physician liability.
What would be the consequences of a lawsuit claiming fraud?
Fraud is an “intentional” act, unlike negligence. Insurance companies do not cover physicians for “intentional acts” as public policy prohibits insuring anyone for intentional misconduct. This means the entire cost of defending a fraud case, which can be tens of thousands of dollars, would have to be paid by the individual doctor out of his or her personal assets, even if the doctor wins. Any judgment or settlement in favor of the patient would also have to be paid by the doctor out of personal assets. In fact the jury would review the doctor’s personal assets to assist them in determining appropriate financial “punitive damages” if the jury found the doctor knowingly lied about a material fact with the intent that the patient rely upon it, and that the patient suffered harm as a result of that reliance.
Currently, patients can seek punitive damages for “fraudulent concealment of evidence” where a doctor alters or destroys a patient’s medical record and the patient is hampered in their efforts to prove a malpractice claim as a result.[9] If a doctor performs “ghost surgery” in place of the authorized physician, the patient may obtain both compensatory damages for any injury and punitive damages for “battery”, which is the intentional, unauthorized touching of another person.[10] Judgments and settlements in favor of patients in civil suits must be reported to the Board as a matter of public policy.[11] A fraud claim by a patient in a civil suit could also trigger investigations by both the health care facility and the Board of Medical Examiners, with loss of privileges and license a distinct possibility. Hence, consequences of fraud claims can be severe.
[5] N.J.S.A. 45:1-21 (b).
[7] Liguori v. Elmann, et. al., A-52-06 (2007).
[8] Spinosa v. Weinstein, 571 N.Y.S. 2d. 747
(App. Div. 1991).
[9] Rosenblitt v. Zimmerman, 166 N.J. 391 (2001).
[10] Perna v. Pirozzi, 92 N.J. 446 (1983).
[11] Steinberg v. Grasso, A-2508- 05T1 (App. Div.
2007).