Doctor’s Insurance Fraud & Malpractice Causes Revocation of License

Claiming No Point to Participate in Hearing Causes Doctor to Lose of License

Physicians, like all professionals, must be licensed by the state. Failure to fulfill the duties imposed on a physician by statute can result in a loss of the right to practice medicine. More importantly, acting criminally, misleading patients, or hurting patients will most often cause a doctor to lose his or her license.

In Kentucky Board of Medical Licensure v. Jon M. Strauss, M.D., NO. 2015-CA-001919-MR, Commonwealth of Kentucky Court of Appeals, (November 8, 2019) Dr. Strauss and his counsel did everything possible to delay the revocation proceedings rather than presenting a defense – perhaps because none existed. In part the delay actions kept him “practicing” medicine for about nine years until the Kentucky Supreme Court and the Kentucky Court of Appeals finally deprived him of the right to practice medicine.

FACTS

Following judicial review of an order entered by Kentucky Board of Medical Licensure (“KBML”) revoking the medical license of Jon M. Strauss, M.D., on December 10, 2015, the Jefferson Circuit Court, Division Nine, remanded the matter to KBML for further proceedings to include a review of the entire administrative record. KBML timely appealed, believing the Jefferson Circuit Court’s decision was contrary to plain statutory language and binding authority.

Challenges by Dr. Strauss to a 2010 KBML order placing him on probation went to the Supreme Court of Kentucky that rendered its Opinion in Kentucky Board of Medical Licensure v. Strauss, 558 S.W.3d 443 (Ky. 2018), reh’g denied (Nov. 1, 2018), cert. denied, 139 S.Ct. 1354, 203 L.Ed.2d 590 (2019) (“Strauss I”), which became final on November 1, 2018.

In August 2011, KBML received a grievance alleging Dr. Strauss demonstrated erratic behavior and engaged in a poor standard of care, failed to properly monitor his patients’ chronic conditions, engaged in questionable prescribing practices, committed insurance fraud, engaged in unethical and unprofessional behaviors, and abandoned patients. After a lengthy investigation, on June 20, 2013, a complaint was issued against Dr. Strauss’ medical license and an emergency order of restriction was entered contemporaneously which prohibited Dr. Strauss from prescribing, dispensing, or professionally utilizing controlled substances during the pendency of the complaint.

A hearing proceeded and Dr. Strauss identified no defense witnesses, exhibits, or evidence upon which he intended to rely. When the matter was called, counsel for Dr. Strauss indicated neither he nor Dr. Strauss would participate because “there is no point to it.” Counsel stated his belief the process was flawed, illegitimate, and a sham. After some discussion, both Dr. Strauss and his counsel left the hearing. The hearing officer subsequently issued a recommended order finding Dr. Strauss in default. KBML, through its hearing panel, issued an order of revocation.

Dr. Strauss sought judicial review and the trial court entered an order concluding the factual basis of the KBML order finding Dr. Strauss in default was supported by substantial evidence. However, the trial court remanded the matter upon finding KBML’s hearing panel abused its discretion when it reviewed only the complaint, recommended order, and exceptions, rather than the entire administrative record as required by KRS1 13B.120(1).

THE APPEAL

The sole issue before the court of appeal was whether state statutes required KBML to review the entire administrative record prior to rendering its final order. The Kentucky Supreme Court has provided clear and definitive authority on this precise question in Strauss I. There, after a lengthy discussion of the issue, the Supreme Court stated: “In sum, the Board is charged with considering the record including the recommended order and exceptions. The extent of the record consideration beyond the recommended order and exceptions is a matter committed to the Board’s sound discretion. Contrary to Strauss’s claim, KRS 13B.120 does not mandate an independent review of the entire record.”

On the strength of Strauss I, the court concluded the trial court erred in concluding KBML was required to review the entire administrative record and the failure to do so constituted an abuse of discretion.

The doctor’s right to practice in Kentucky was finally revoked after nine years of obfuscation.

ZALMA OPINION

A doctor who fails to deal reasonably with his patients and engages in insurance fraud is anathema to the medical profession. That he was able to fight the action of the state to revoke his license for ten years is a ridiculous abuse of the intent of the licensing law and establishes a need for improvement in the system and the actions of the courts. In this case, since there was evidence of criminal conduct – insurance fraud – the purpose of the statutory scheme could have been resolved by the arrest and conviction of the doctor. Counsel for the doctor was right – there was no point in defending the doctor.


© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

 

 

About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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