Here are 10 major ASC lawsuits Becker's reported on in 2024 that shook the industry:
1. Siouxland Surgery Center, operating as Dunes Surgical Hospital in Dakota Dunes, S.D., alongside ASC giant United Surgical Partners International and USP Siouxland, has agreed to pay approximately $12.76 million to settle allegations of violating the False Claims Act.
The claims stem from actions between 2014 and 2019, when Dunes Surgical Hospital allegedly made substantial financial contributions to a nonprofit associated with a physician group that referred patients to the hospital. Additionally, the settlement addresses claims that the hospital provided another physician group with clinic space, staff, and supplies at little to no cost during the same period.
2. A jury awarded more than $400 million to a New Orleans-based surgical center following a prolonged seven-year legal battle against Blue Cross and Blue Shield of Louisiana. The case centered on St. Charles Surgical Hospital and the Center for Restorative Breast Surgery, which accused BCBS Louisiana of underpaying for thousands of breast reconstruction surgeries.
The jury found BCBS Louisiana liable for fraud, ruling that while the insurer had authorized around 7,800 surgeries between 2015 and 2023, it only paid about 9% of the associated claims. St. Charles Surgical Hospital had ended its contract with BCBS in 2007 due to low reimbursement rates but continued treating BCBS patients for authorized surgeries. The insurer contended that authorization does not guarantee payment, but the $421 million award is among the largest in a state known for significant jury verdicts.
3. In Portland, Ore., a jury awarded over $24.6 million in August to the family of Erric Gilbert, who died during a colonoscopy in 2018. The case highlights the trend of escalating “nuclear verdicts” impacting ASCs. The lawsuit against the Portland Clinic and its medical staff sought $57.7 million, alleging that the ASC failed to provide timely emergency resuscitation when Mr. Gilbert’s vital signs deteriorated. The jury assigned 40% of the responsibility to the clinic's medical team, with the rest attributed to an anesthesiologist who had previously settled out of court.
4. Also in August, an anesthesia provider and its malpractice insurer paid a $4.2 million settlement to the family of Michelle Crisafulli, who passed away after a procedure at RWJBarnabas Health's Gregori Surgery Center. This is another example of the rising mega-verdicts facing ASCs.
Ms. Crisafulli underwent general anesthesia for the removal of an intrauterine device on July 24, 2018. During the operation, her oxygen and blood pressure levels dropped, but anesthesiologist Dr. Peter Scala did not stop the procedure. She died nearly a month later, on August 16, 2018. The settlement amount exceeded insurance coverage, with $2 million paid by MedPro and $2.2 million from Pediatrix.
5. A California Court of Appeal has ruled in favor of an ASC upholding the involuntary buyout of a member's ownership interest after alleged misconduct. The case was centered around West Lake, Calif.-based Specialty Surgical Center of Thousand Oaks, who implemented an operating agreement which included a provision that allowed the removal of members to protect the business from internal threats.
The decision reinforces the ability of ASCs to enforce operating agreements that safeguard against internal risks. This ruling emphasizes the protection provided by California’s business judgment rule, allowing ASCs to maintain governance practices that prioritize the stability of their operations. The outcome sets a precedent for ASCs managing internal disputes and protecting their business interests.
6. In September, ASC chain Inova Surgery Center, an affiliate of Falls Church, Va.-based Inova Health, was charged with violating the Americans with Disabilities Act and the Age Discrimination in Employment Act for firing an employee because of disability and age.
The U.S. Equal Employment Opportunity Commission filed a suit alleging that after a 52-year-old radiologic technician requested an extension of medical leave to recover from carpal tunnel surgery, Inova Surgery Center terminated her and replaced her with two younger coworkers while she was on leave.
7. A medical malpractice suit was filed Nov. 15 against Akira Yamamoto, MD, Lynette Tschabold, PA-C, Scott Morley and several parties under the Palo Alto (Calif.) Medical Foundation, a network of Sutter Health-affiliated physicians. The complaint was filed by James Derbin and stems from a total hip arthroplasty that took place Dec. 7, 2023, at the Palo Alto Medical Foundation ASC. The lawsuit alleges that Dr. Yamamoto's performance "fell below the applicable standard of care," according to the report. The lawsuit alleged that the surgery itself was negligent, as was the care provided by other defendants who failed to meet professional standards.
8. Raynaldo Ortiz, MD, a Dallas-based anesthesiologist, was sentenced to 190 years in prison after being convicted of injecting nerve-blocking agents and other drugs into IV bags at Baylor Scott & White Surgicare North Dallas. In August 2022, Dr. Ortiz tampered with five IV bags, contaminating them with bupivacaine, epinephrine, and lidocaine before placing them in a warming bin for use by medical staff. The tampering led to four patients suffering cardiac emergencies during routine cosmetic procedures
9. In November, a Denton, Texas-based medical center paid $14.2 million to settle alleged violations of Stark law and Medicare regulations related to four ASCs in the Dallas-Fort Worth area, specifically in Dallas, Richardson and Coppell.
Horizon Medical Center, which operates a long-term acute care hospital with several ASCs, self-reported that it failed to include a modifier and location to identify services performed at non-excepted, off-campus outpatient facilities when submitting claims to Medicare.
Horizon disclosed that it had entered into management agreements with third-party companies affiliated with physicians performing surgery at its outpatient facilities. It also leased equipment through operating agreements with companies affiliated with those same physicians.
10. In March, a nurse at Crown Point (Ind.) Surgical Suites outpatient surgery center was charged with stealing hundreds of narcotics from the facility. Jessica Smith, 43,was charged with felony theft, fraud and forgery and misdemeanor interfering with a drug or alcohol screening test.
Ms. Smith was hired at the surgery center in April as a charge nurse, according to the report. Prior to her hiring, six facility nurses had access to the pill cabinet at the facility. Ms. Smith allegedly changed the system so she was the only one with access to the cabinet. In December, a nurse administrator noticed irregularities in the cabinet and discovered 300 hydrocodone and acetaminophen pills, 20 Oxycontin pills, 97 Percocet pills, 100 Tramadol pills and 39 vials of fentanyl were missing, according to the affidavit.