Clark County Medical Society

County Line

Newsletter XXVII         April 2002

Contents

Offshore Asset Protection Planning

Referral Tallies

Member Applicants

New Members

President’s Message - Malpractice Crisis Update

CEO Editorial

Survey of NBME Disciplinary Actions

CME Calendar

Guest Column:  The St. Paul Crisis and Dr. Rotten Apple

Clark County Health District Disease Statistics * - February 2002

Classifieds

 

Offshore Asset Protection Planning

Jeffrey L. Burr and Russell K. Bowler, Jeffrey L. Burr & Associates

            The purpose of asset protection planning, generally speaking, is to protect assets from the reach of future creditors.  Asset Protection planning should not be seen as a way to defraud creditors.  Rather, it should be seen as a way to arrange one's assets to take advantage of legitimate legal means to shield assets from creditors.  Asset protection planning is becoming more popular as the number of lawsuits continues to grow at a frightening rate.

            One of the basic themes of asset protection planning is that form matters.  Thus, for example, investment assets held in a limited partnership or a limited liability company are generally more difficult to reach and therefore less desirable to creditors than investments owned in one's own name.  This is true even though the same individual may control his or her investment assets through an entity such as a limited liability company.

            A good asset protection plan will generally employ various strategies to protect one's assets.  A good plan should have various levels of protection.  If a creditor breaks through one level of the asset protection structure they should not then have a clear path to all of one's assets.  Rather, they should then face the prospect of having to break down even more barriers.

            The various levels of asset protection one employs in their asset protection plan may include the homestead exemption, liability insurance (professional, automobile, an umbrella policy, etc.), owning exempt assets such as certain qualified plans, gift-giving strategies, spendthrift trusts, limited partnerships, limited liability companies and others.  Many appear to consider the offshore trust as the biggest weapon in this asset protection planning arsenal.

            In this article we provide an overview of offshore trusts.  First we will discuss some background information with regard to offshore trusts. We will then discuss some of the initial considerations such as selecting an offshore jurisdiction.  Then we will discuss some of the tax and reporting issues involved with actually taking assets offshore.  We will next discuss some of the current U.S. legal developments in this planning area.  Finally, we will compare the offshore trust to the NOST.

[Ex. Dir. note - a Nevada On-Shore Trust is a descriptive term for Nevada's current Spendthrift Trust, the provisions of which are found in Nevada Revised Statutes 166.  NRS 166 can be found through the Legislative Counsel Bureau's web site:  www.leg.state.nv.us]

            Understanding some of the terminology in this area is important.  A "Settlor" is the person who establishes a trust.  The terms "grantor" or "trustor" also refer to a settlor.  A "Spendthrift trust" is a trust where the assets cannot generally be reached by the beneficiaries' creditors.  A self-settled spendthrift trust is a creditor protected trust where the settlor is a beneficiary.  The laws of most of the states (and most other common law jurisdictions) do not recognize self-settled spendthrift trusts as a way for a settlor to protect his or her assets from creditors.  However, at least four states have enacted legislation to change that law to some degree.  Nevada is one of those states.  Many foreign jurisdictions have also enacted laws that recognize these types of trusts.

            The foundational basis for offshore asset protection planning is twofold.  First, the laws of the foreign jurisdiction are generally more favorable than domestic laws and second, the physical location of the assets makes them more difficult to reach.  Thus, there are legal and practical barriers to reaching assets that are offshore.

            Another basic tenet of asset protection planning is that the optimal situation is where the plan is established and the transfers are made when the owner of the assets is not in trouble with creditors.  The best time for putting a plan into effect is when the waters are clear, so to speak.  Fraudulent transfer laws are less likely to apply to transfers made before the trouble hits.  Also, a court is going to be less impressed with planning that is quick and in the wake of financial troubles. They are more likely to try to find a way to disregard the offshore or other asset protection arrangement if it appears that it was established as a result of current creditor problems. Planning should occur before the storm hits.  In short, the time to plan is now!

            Giving Up Some Control.  In order to obtain offshore protection a settlor must generally give up some control over the assets that will be transferred to the offshore trust.  However, the trust document and any other agreement are put in place to establish a contractual framework of how the assets are to be controlled and administered by a third party, the trustee.  A trust company will generally have to be employed.  This company should be selected carefully as it will have control over assets.

            The importance of giving up control has been highlighted in some US Bankruptcy Court cases where the court allowed the assets in offshore trusts to be included in the bankrupt's estate because the courts found that the debtor kept control over the assets.

            Selecting a Country.  The jurisdiction should be carefully selected, as it should be one where the political and economic climates are friendly to the settlor.  Also, the laws of the jurisdiction should be very settlor friendly vis a vis a judgment creditor.  Judgment creditors should cringe when they find out that their debtor has assets in trust governed by that particular jurisdiction.  There are many jurisdictions to choose from.  One should look for the jurisdictions that they are comfortable with and that provides the greatest legal protection.

            In an effort to attract capital, many of these "offshore" countries have enacted pro-debtor legislation.  For example, some of them will not recognize a foreign judgment.  Thus, the case against a debtor will have to be re-litigated in that country.  Some disallow contingency fees making it less desirable for a creditor to bring a lawsuit there, as the creditor would likely have to pay their attorney on an hourly fee basis.  To make it even more difficult, the laws of some of these jurisdictions set a higher standard of proof.  In the United States a suit to set aside a fraudulent transfer must generally be proved by a preponderance of evidence (i.e., a more likely than not standard); however, in some of these offshore jurisdictions this type of case must be proved beyond a reasonable doubt.  This is much higher burden that the judgment creditor would have to satisfy.  Also, some of these jurisdictions have a relatively short statute of limitations.  Each jurisdiction, however, does require a waiting period before the transfer is protected (typically at least one year).

            Tax Considerations.  Generally, our federal government imposes a tax on assets that are transferred to a foreign trust.  The amount subject to tax is the difference between the adjusted basis and the fair market value of the assets transferred.  However, most people who set up these offshore trusts retain some certain controls over the assets and/or benefits from the assets owned by the trust.  As a result, the trust is a grantor trust under our federal income tax laws.  A grantor trust is one where the federal income tax laws treat the grantor (or settlor) as the owner of the trust's assets.  Thus, the settlor is taxed on the income of those assets and it is reported on the settlor's U.S. individual tax return.

            In selecting an offshore trust jurisdiction one should consider whether its laws are tax friendly.  Some jurisdictions, for example, make such trusts exempt from their tax laws (income and transfers taxes) if none of the settlor(s) and beneficiary(ies) are residents of those countries.

            Other Asset Transfer and Reporting Considerations.  Assets do not have to be physically located in the offshore trust jurisdiction.  A Cook Islands or Belize based trust could own a Swiss bank account, for example.  A popular technique is to transfer investment assets into a limited partnership or limited liability company.  As discussed above, this is an asset protection measure itself.  The ownership interests in these entities can be transferred to the offshore trust.  The settlor can still manage the entity (by retaining a one percent general partnership interest in a limited partnership or by being a manager of a limited liability company) and thereby retain control those assets.  There appears to be more protection, however, if the assets are actually located offshore.

            A gift tax return is required upon certain transfers to offshore (and domestic) trusts even though no gift tax is due.  The return is required for disclosure purposes where a transferor is claiming to retain certain powers.  The IRS wants to make sure that a completed transfer has not occurred.  Also, depending on whether the trust is a foreign or domestic trust under the income tax regulations, certain annual reporting forms may be required.  These forms general cover the transfer of assets to and from a foreign trust.  A discussion of the reporting requirements of foreign and domestic trusts is beyond the scope of this article.  It is important to discuss these matters with the professionals who assist you in setting up an offshore trust.  Finally, certain annual reports must be filed with regard to certain foreign bank accounts.

            Recent Developments: Litigation Involving Offshore Trusts.  There have been a couple of cases that have made some think that offshore planning is not as viable as it used to be.  In at least one of these cases the judge held the settlors of a trust in contempt of court (with the threat of jail time) for not returning the assets they had transferred to an offshore trust.  The facts of this case were egregious as the settlors transferred assets (that were allegedly obtained in an illegal Ponzi scheme) to an offshore trust to evade creditors.  The trust appeared to give the settlors too much power over the trust assets and had  provisions that appears the settlers could have failed to invoke.  Once invoked, these provisions did not allow the trustee to return the assets to the United States.

            As a result, much has been written about the issue of a settlor being held in civil contempt.  The conventional wisdom appears to be that a properly drafted trust and a properly structured plan should avoid the civil contempt issue.  The key issue appears to be what powers the settlor(s) retain and what ability they have under the trust agreement to bring the assets back to the United States.  This emphasizes the importance of having a properly structured trust agreement.

            Comparison to NOST.  For those who are uneasy with going offshore or want a less costly alternative there is another option.  A few states, including Nevada, have enacted laws that repeal the rule against self-settled spendthrift trusts.  Thus, a settlor can be a beneficiary of his or her own trust and have the assets protected from creditors.  This is what we call the Nevada Onshore Trust ("NOST").  With one exception, Nevada's law allows creditors only a two-year window after the transfer of the assets to the NOST to bring a suit to obtain those assets.  We recommend the use of a limited liability company ("LLC") in connection with the NOST.  The LLC will own investment assets and the NOST will hold substantially all of the ownership interests in the LLC.  This allows the settlor to retain control over the assets by being a manager of the LLC and it will provide some creditor protection before the statute of limitations closes.

            Conclusion.  This article is intended to give some basic information on the use of an offshore trust in asset protection planning.  A good asset protection plan includes many barriers.  The offshore trust is a powerful asset protection planning tool and can be an enormous barrier; however, the tradeoffs for such protection are complexity, high cost, and having to actually transfer control of assets to a foreign trustee.  There are other alternatives to going offshore including the NOST.

Jeffrey L. Burr and Associates is a law firm specializing in Estate Planning and Asset Protection.

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Referral Tallies

The following referrals were provided to CCMS members in the first quarter of 2002 (through March 15)

Specialty                                  Referrals

Addiction Medicine                 2

Allergy                                     3

Anesthesiology                        3

Cardiology                               4

Cardiovascular Surgery            0

Colon & Rectal Surgery           1

Dermatology                            7

Diagnostic Radiology              0

Endocrinology                         7

Family Practice                        20

Gastroenterology                     9

General Surgery                       2

Geriatrics                                 5

Gynecologic Oncology            0

Hematology                             1

Infectious Medicine                 3

Internal Medicine                    23

Nephrology                              1

Neurology                                12

Neurosurgery                           0

Ob-Gyn                                   16

Oncology                                 2

Ophthalmology                       9

Oral/Maxillofacial Surg.          0

Orthopaedic Surgery               13

Otolaryngology                        4

Pain Management                    2

Pathology                                0

Pediatrics                                 3

Ped. Endocrinology                 0

Ped. Neurology                        0

Ped. Surgery                            0

Physical Med/Rehab               0

Plastic Surgery                         11

Preventative Medicine             0

Psychiatry                                18

Pulmonology                           1

Radiology                                1

Rheumatology                         4

Urology                                    1

Vascular Surgery                      0

Totals                                      188

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Member Applicants

If you have any pertinent information about the following membership candidates, please contact:

Clark County Medical Society

2590 E. Russell Rd.

Las Vegas, NV 89120

 

Donald Roberts, MD - Ob-Gyn

Hamidreza Sanatinia, MD - Internal Medicine

Naresh Singh, MD - Pulmonology

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New Members

Congratulations and Welcome to the Clark County Medical Society - New Members for February 2002

Jorg Dunckelmeyer, MD, Anesthesiology, 2450 W. Charleston Blvd., Las Vegas, NV 89102

Raef Hajj-Ali, MD, Cardiology, 4275 Burnham Ave., Ste. 370, Las Vegas, NV 89121

Walter Kidwell, MD, Anesthesiology, 4500 W. Oakey Blvd., Las Vegas, NV 89102

Louis La Mancusa, MD, Neurology, 2301 McDaniel St., Ste. 260, Las Vegas, NV 89106

Joanne Leovy, MD, Family Practice, 895 Adams Blvd., Boulder City, NV 89005

Dennis Moore, II, MD, Pediatrics, 6301 Mountain Vista, Ste. 205, Henderson, NV 89014

Craig Nakamura, MD, Pediatric Pulmonology, 3838 Meadows Ln., Las Vegas, NV 89107

William Steinkohl, MD, Urology, 7200 Cathedral Rock Dr., Ste. 180, Las Vegas, NV 89128

Jason Zommick,  MD, Urology, 5701 W. Charleston Blvd., Ste. 201, Las Vegas, NV 89146

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President’s Message - Malpractice Crisis Update

Raj Chanderraj, M.D., 2001-2002 CCMS President

The malpractice crisis is gaining momentum. It has caught the attention of the public, the politicians and the local industry. I hope something good comes out of it.

Let me outline what has happened so far, what needs to happen and what we need to do.

Since our last issue, the Medical Liability Task Force has been formed, coming together with the Clark County Medical Society, Nevada State Medical Association, Concerned Physicians of Nevada, the Obstetrical and Gynecology Specialists Association, the Emergency Physician Group, the Nevada American College of Surgeons, the Orthopaedic Surgeons Group and the Governor's Liaison member. One representative from each of the above groups constituted the Core Group. Several other groups, such as the Osteopathic physicians, the Hospital Associations, Western Physician Group, the Nurses Alliance and the insurance industry will be added on.

The task force hired a lobbyist and a public relations firm to further our cause. The immediate focus is on obtaining affordable liability coverage. To this end, several of the task force members testified at the Insurance Commissioner's meeting, wherein we made it abundantly clear to the Commissioner and the Governor that there was no affordable coverage to most physicians. The Governor was given information on the statistics and informed of the need for legislative reforms that need to be accomplished. HE IS WELL INFORMED NOW THROUGH OUR EFFORTS AND HE IS DOING EVERYTHING IN HIS CAPACITY TO HELP US. HE IS ON OUR SIDE. Very expeditiously he announced - at the risk of negative publicity - his invoking the Emergency Insurance Act at the expense of taxpayers to make sure we have something to fall back on.

Unfortunately, the tail coverage needed to make the liability coverage affordable still is a daunting problem and may still lead to an exodus of high risk specialists such as OB-GYN's, surgeons, and ER physicians. While the dialogue is still being carried on, the solution to this critical need remains elusive.

Upon learning the governor's initiative, the Medical Society, at an emergency meeting, elected to suspend its efforts of bringing about a mutual insurance company. We feel this only duplicates what the state is doing and may not be available to write policies for at least another 90 days, whereas the state plan will be effective by April 15th. The Medical Society may resume its efforts after an effective TORT reform package is passed by the legislature.

March 21st is the first meeting of the State's Legislative Committee charged with the responsibility of submitting a bill draft to the legislature. Several of the task force members have been called on to testify at the hearings.

There may be a catastrophic crisis situation very soon that may provoke and force some physicians to take unprecedented moves in Nevada. Legal constraints prevent the Task Force and its constituent members from discussing, endorsing or supporting such actions but will not hinder individual freedoms for choosing their own destiny.

Lastly, I thank you all for turning out in large numbers at the Insurance Commissioner's hearing. I hope and trust we can stay UNITED.

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CEO Editorial

Weldon (Don) Havins, M.D., J.D., CCMS Executive Director/CEO and Special Counsel

Governor's Immediate Medmal Insurance Availability Solution

            This article was written just as Governor Guinn announced the plan to establish the Nevada Essential Insurance Association (NEIA).  The NEIA start-up costs will be funded, up to $250,000, from the State Emergency Account controlled by Governor Guinn as chairman of the Board of Examiners.  Insurance Commissioner Alice Molasky-Arman made the formal declaration that essential insurance in the medical professional liability area is not readily available to physicians.  The Governor stated that the program would be in place and granting policies by April 15th, some 32 days from the announcement.

            Thus, before April 15th, the Board of Directors of the NEIA must be selected, the Directors must contract for actuarial services, obtain those, select underwriters and administrators, set policy premiums for the specialties of medicine and surgery, process applications and send accepted physician policyholders their policies.  This will be a very busy time for all concerned.  The Governor stated that the policy premiums would be set at a level calculated to cover anticipated losses with a prudent surplus.  There will be no reinsurance.  The taxpayer of Nevada appears the guarantor should losses exceed the revenues from the premiums collected.  There will be no prior acts coverage offered, so physicians will need to purchase "tail" coverage from their current carrier.  The Governor announced that initial year premiums for OB-GYNs would be around $32,300.  Rough estimate of the second year is $58,000.

            Other specialty estimates for initial and second year premiums are as follows:

Cardiovascular Surgery: $25,500 and $46,000

Emergency Room Physicians: $13,000 and $25,000

General Surgery: $22,000 and $40,000

Orthopaedic Surgery: $25,000 and $50,000

Internal Medicine: $6,000 and $11,000

Pediatrics: $6,000 and $11,500

            These are only unofficial estimates.  Reliable, definitive premium prices will be available soon.  Remember, tail coverage will need to be purchased by physicians from their current carrier. Tail coverage normally costs between 1.7 to 2.5 times the last annual premium.

            The Governor announced that he had reached an understanding with St. Paul Insurance Company that payments on tail coverage (rather than the usual requirement of full payment on the tail within 30 days of termination of insurance) would be permitted for physicians paying premiums on a monthly or quarterly basis.  For these physicians, payments on the tail coverage could be spread out over the year following coverage on a corresponding monthly or quarterly basis.  Those having paid premiums on an annual basis would apparently be required to pay the complete tail amount within 30 days of the termination of the policy contract.

            The Governor expressly stated that this Association constituted a temporary measure until the legislature has an opportunity to address the problems which have lead to the current crisis.  Thus, it appears the Association will be with us through the 2003 legislative session.

State Medmal Information Web site

            A comprehensive collection of state by state medical malpractice associated statutes can be found at: http://www.mcandl.com/states.html  The topics addressed in each state are:

    Statute of Limitations

    Contributory or Comparative Negligence

    Joint and Several Liability

    Contribution

    Vicarious Liability

    Expert Testimony

    Damage Caps

    Statutory Cap on Attorneys' Fees

    Periodic Payments

    Collateral Source Rule

    Pre Judgment Interest

    Patient Compensation Funds

    Immunities

    Arbitration

The web site is current through 1998.  While it is possible that some of the statutes have been amended or found unconstitutional, it is likely the vast majority are currently valid law.  It appears that 21 states have caps or limits on non-economic (pain, suffering, and inconvenience) damages, including California ($250,000 cap) and Utah ($250,000).  So, we live between two states with stable affordable medical malpractice premiums, each of whom, perhaps coincidently, have non-economic damage caps.  One other adjacent state, perhaps coincidently, without non-economic damage caps, Arizona, is suffering through the same medical malpractice availability/affordability misery as is Nevada.  The current statutes of States can be accessed through  http://www.findlaw.com. AMA members can review the current status of state laws at www.ama-assn.org/ama/pub/article/7263-5869.html.

Nevada Trial Lawyers Association form their own "NTLA Med Mal Strategic Committee"

            NTLA has formed a committee to address the medical malpractice insurance availability crisis.   The voting members of the Nevada Medical Liability Crisis Physician Task Force, and the organizations represented, are lists below the attorneys.  Other members of the Physician Task Force are Arnold Wax, M.D., representing the American College of Physicians, Bill Welch, representing the Nevada Hospital Association, Mike Daubs, representing the Clark County Orthopaedic Surgeons, and Tony Alamo, additionally representing the Concerned Physicians of Nevada.  Pete Ernaut, contracted by the Concerned Physicians of Nevada, and Scott Craigie, contracted by the Nevada State Medical Association work together to further the aims of the Task Force.

            Timothy Williams, Esq., president of the Nevada Trials Lawyers Association concluded a series of articles entitled, Examining the Myths Behind Tort Reform (Part 3 - Medical Malpractice).  He contends that "contrary to what is being reported in the media, Southern Nevada is undergoing an 'Insurance Industry Created Crisis' resulting from the predatory and opportunistic business practices of the St. Paul Insurance Company."  Addressing the physician community, he asks, "Doctors, have you forgotten, not long ago you were paid fair market value for your services.  For example, ten years ago reasonable customary payments for carpal tunnel or cataract surgery were $1800 to $2000; however, the same insurance industry has forced you to accept $300 to $400 for the same procedures.  In addition, the same insurance industry monolith now wants to double and triple your insurance premiums and blame the trial lawyers, alleging there are too many lawsuits or assert that jury verdicts are excessive.  Just like there are no facts to justify the 70 percent reduction in physicians' fees, there is no evidence to support the insurance industry's claims of a medical malpractice crisis in Southern Nevada."

            Mr. Williams' criticisms of St. Paul's underwriting and their case management appear based in practical knowledge.  Mr. Williams worked for the prominent medical malpractice defense firm of Galatz and Earl who represented physicians insured by the Nevada Liability Trust Insurance Company (NML).  NML was eventually purchased by St. Paul Insurance Company.  St. Paul terminated their inherited contract with Galatz and Earl and employed their own case management style using other firms.  In the last few years, St. Paul sustained multi-million dollar losses in Clark County and hundreds of million dollar losses in their national medical malpractice insurance division.  Mr. Williams contends that this disaster was of St. Paul's own making.  St. Paul's departure from the medical malpractice insurance business seemed to frighten Nevada PLI carriers into progressively astronomical PLI premium increase demands.

            Perhaps Mr. Williams and the NTLA are correct.  Perhaps the premium increases demanded by medmal carriers in Clark County are the result of insurance companies' irrational greed, the losses incurred by the insurance industry on Sept. 11, and the subsequent stock market decline.  Perhaps the premium increases were completely unjustified and unnecessary.

            For the time being, it appears Governor Guinn's courageous action in initiating the formation of the Nevada Essential Insurance Association will stem the insurance premium increases that are driving excellent physicians from Nevada and threatening the availability of obstetrical care in Clark County.  Is there any chance that the NTLA Strategic Committee and the Physician Task Force can work together to parlay this brief respite in the insurance availability/affordability madness into a stable legal environment where we can avoid re-living these crises?  The NTLA recommends that physicians form another NML and implies this will stabilize premiums for the foreseeable future.  Alone, will this be enough?

            While discussing this and other problems recently, Mark Howard, CEO of Mountain View Hospital, opined that we should all keep the following in mind: more than 50% of humans live in a one room accommodation with a dirt floor; only 20% of humans live in a house with more than one room and that has glass windows; less than 20% of humans read, wear shoes, have a change of underwear, and eat more than one type of food; and, finally, less than 1% of humans own a refrigerator, automobile, computer, microwave and a VCR.

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Survey of NBME Disciplinary Actions

            Several doctors have expressed interest or concern over the Nevada State Board of Medical Examiners disciplinary actions, specifically what penalties result from what sorts of transgressions. Deborah Barton, CCMS Public Relations Coordinator researched the published records of disciplinary actions taken by the BME. The sources used for this article were NBME actions published in the NBME newsletter at www.state.nv.us/medical, the Las Vegas Review-Journal database of physician disciplinary actions at http://db.lvrj.com/doctor-review/ and the Federation of State Medical Board's web site information at www.fsmb.org.

            An analysis of the physician disciplinary actions listed on those websites resulted in information on 162 actions against 144 licensed physicians from 1988 through 2001. The complaints were separated into eight broad categories:

            1.         False Information on Application/Action Taken in Another State/Failure to Report Action

            2.         Not Listed

            3.         Malpractice

            4.         Business/Office Management

            5.         Criminal Actions

            6.         Excessive/Improper Prescribing

            7.         Substance Abuse

            8.         Competency

            For convenience, physicians with complaints that fell into multiple categories were placed in the category for the most severe allegation. For instance, a physician who was convicted of a felony in another state and failed to report it to the Board would be categorized for criminal actions rather than failure to report.

            Of the physicians disciplined by NBME during this period, 54 of those disciplined were for false information on the application, for actions taken by other states, and/or failure by the physician to report these actions.  Against the 54 physicians disciplined for these offenses, the Board revoked, refused to renew or accepted the surrender of 27 licenses. Only 14 of the 54 disciplined for these actions still have a Nevada license, the others have ceased practicing in this state.

            Of the seven remaining reasons for physician discipline, 20 complaints were "not listed," 19 were for malpractice, 16 were for business/office management issues, 15 were for criminal actions, 10 involved excessive or improper prescribing, seven were strictly for substance abuse and three were related to competency.

            As far as could be determined from the published documentation, of the 20 physicians whose complaint was "not listed," three licenses were revoked, five licenses were voluntarily surrendered while under investigation and six of the physicians are still licensed.

            Of the 19 physicians disciplined for malpractice, five licenses were revoked, one physician voluntarily surrendered his license while under investigation, and the others received various penalties, such as probation, restrictions on practice, reprimands, and CME requirements. Six of the 19 physicians still have a Nevada license.

            Most of these disciplinary actions were taken for gross malpractice or multiple counts of malpractice; however it is important to note that, due to a 1997 change in NRS 630, it is now possible to be disciplined by the Board for a single act of malpractice. A Fallon physician received a fine, charged administrative costs and placed on probation until completing 10 CME hours in post-surgical complications for a

single complaint of malpractice.

            The Medical Dental Screening Panel (MDSP), from 1986 through 2001, only lists findings on three of the 19 physicians disciplined for malpractice. One physician had two cases determined to be probable malpractice, one physician had one finding for probable malpractice, and one physician had two cases where the panel was unable to decide.

            There were 16 physicians disciplined for offenses relating to the management of their practice. These involve billing issues, aiding unlicensed persons in practicing medicine, signing blank prescription forms, false advertising, and records management. Nine of these physicians are still licensed, two had their license revoked and one surrendered his license. The penalties for most licensees in this category involved fines, probation and/or reprimands.

            Fifteen physicians' licenses were disciplined for criminal actions or conviction, of which five licenses were revoked and the remaining 10 faced various penalties. Six of the physicians are still licensed.

            Of the 10 physicians penalized for improper or excessive prescribing, three had their license revoked, two surrendered their license, and the remaining received lesser penalties. Four of the physicians have a Nevada license.

            According to the information, seven physicians were disciplined specifically for substance abuse. Of these, three had their license revoked and one voluntarily surrendered his license. Of the three physicians whose license was revoked, two were placed on probation prior to losing their license. The remaining three were placed on probation and required to seek treatment, and received other penalties as well. The MDSP has findings on two of these physicians: one physician has one finding of probable malpractice and one physician has one finding of probable malpractice and one finding of no probable malpractice.

            During this period, three physicians were disciplined for failing competency exams. One physician retired, one surrendered his license and one was ordered to take refresher courses and retake a competency exam. That physician is still licensed. According to the materials analyzed, there has not been a physician disciplined for competency since 1992.

            Information on all NBME disciplinary actions is a matter of public record. The Board charges 60 cents per page for the information. Another source for disciplinary information is the Federation of State Medical Boards, which will provide information on a physician for a $9 fee. The requestor must submit the physician's full name, city and state.

The above table displays NBME disciplinary actions taken against medical doctors as reported to the Federation of State Medical Boards from 1985 through 2000. NMBE defines miscellaneous actions as license restriction, public reprimand, licensure denied, CME ordered, drug or alcohol treatment program ordered, or competency exams (medical, physical, mental) ordered. (Data from NBME Newsletter, Volume 26, April 2001.)

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CME Calendar

Cardiovascular Consultants 691-9154

4/18 - “End of Life Dilemmas: The Ethics of Assisted Suicide, Palliatire Sedation, Pain and Symptom Management,” 5:30 p.m., Sunrise Hospital Auditorium, 2 hours

Clark County Medical Society   739-9989

St. Rose Hospital       616-5832

4/13 - “Medical Ethics Symposium: Ethical Decision Making and the Critical Care Patient,” 8 a.m., Henderson Convention Center, 4 hours

Southwest Medical Associates   242-7347

Some courses also approved for nursing CEUs.

4/11 - “Genetics Update for the Primary Care Provider,” 7:30 a.m., 1 hour

5/9 - “Latest Clinical Standards and Interventions: Providing Optimal Diabetes Care,” 7:30 a.m., 1 hour

Sunrise Hospital   731-8210

UMC   383-2604

Valley Hospital   388-4847

4/9 - “What’s New in Radiation Oncology,” noon

4/23 - “Reduction of Adverse Cardiac Events - The HOPE Trial,” noon

5/14 - “Hodgkins Disease: An Overview,” noon

5/28 - “Venous Thromboembolic Disorders,” noon

6/11 - “The Use of Intravenous PPI’s,” noon

6/25 - “Update on Asthma,” noon

7/9 - “Vaginal Births After Cesarean Sections(V-Bacs),” noon

7/23 - “Making the Valley Hospital Web site Work For You and Your Patients,” noon

*Special Note:  CCMS members can receive free CME courses on the internet with World Medical Leaders.

To have your CME courses listed on our calendar, please contact Deborah Barton at 739-9989.

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Guest Column:  The St. Paul Crisis and Dr. Rotten Apple

Richard W. Myers, Crockett & Myers

            Once again a medical malpractice crisis is in the headlines.  A look at the past might provide the solution to this present day problem. 

Nevada’s J.U.A. Was Profitable

            Readers are reminded of Nevada’s insurance history.  A supposed “crisis” in the middle to late 1970’s led physicians to create a joint underwriting association (J.U.A.) type of mutual insurance company called Nevada Medical Liability Insurance Company (NMLIC).   Things were rocky at first.  Then at the urging of the Insurance Commissioner, Dick Rottman, CEO Bob Byrd hired Neil Galatz to defend their insureds (the best defense lawyer is a plaintiff’s lawyer) and insurance veteran Lee Page to conduct their underwriting investigations.  This team proved to be highly successful and N.M.L.I.C. profits soared.  In fact, it was so successful that it became a take-over target.  In the early 1990s, St. Paul bought the company at a handsome profit to its doctor stockholders.  Ignoring the reason for this profitability, St. Paul reverted to head-in-the-sand underwriting and numb-minded claims practices.

St. Paul and Dr. Rotten Apple

            They say one rotten apple can spoil the whole barrel.  During the 1990’s Dr. Rotten Apple saw a chance to make a fortune.  He went on a binge of unnecessary, poorly done surgeries each of which was excessive in scope and very expensive.  He knew that medical malpractice claims would ultimately catch up to him and that his window of opportunity was therefore limited. 

            But St. Paul’s nonexistent to foolish underwriting practices allowed his carnage to continue and his wealth to grow.  When the game was finally up, Dr. Rotten Apple merely relinquished his hospital privileges, let his Nevada license lapse and skipped town.

One Man Mass Disaster

            Beginning in 1995 and through the end of 2001 more than 40 malpractice claims were filed against Dr. Rotten Apple.  And it isn’t over yet.  His St. Paul “claims made” coverage with a “tail” has not yet ended.  His policy limits are $2,000,000/$6,000,000 each year 1995 through 2001 and beyond.  With forty meritorious claims pending and more to come, there will not be enough money to go around. 

Dr. Rotten Apple was a one man mass disaster similar to a hotel fire or an airplane crash.

Never under a Nevada J.U.A.

            This never, ever would have happened under N.M.L.I.C.  Local watchful eyes incented to identify wrongdoing would have ousted Dr. Rotten Apple before he could spoil the whole barrel as he has done under St. Paul’s absentee incompetent underwriting practices.

            There are many Nevada doctors who remember the glory days of N.M.L.I.C. when their own locally owned mutual insurance company was profitable and afforded coverage at reasonable rates because the medical community policed itself.  Patients were safer and doctors were happier.  Today, if Nevada physicians ban together once again (they must be united because a “critical mass” of insureds is necessary) the crisis of today will once again be solved. 

Rich Myers, Esq. earned selection as the 2001 Nevada Trial Lawyer of the Year.  Mr. Myers practices primarily in the Personal Injury area.  He is past president of the Nevada Trial Lawyers Association and has served on the Nevada Bar Board of Governors.  Martindale-Hubbell, the well known attorney and law firm rating service, rates Mr. Myers as “AV” (the highest possible) and the law firm of Crockett and Myers as “AV.”

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Clark County Health District Disease Statistics * - February 2002

DISEASE                                            CASES REPORTED              YEAR TO DATE

                                                            Feb 2001         Feb 2002         2001    2002

VACCINE PREVENTABLE DISEASES

DIPTHERIA                                       0                      0                      0          0

HAEMOPHILUS INFLUENZA        0                      1                      0          1

          (invasive)

HEPATITIS A                                    11                    3                      20        6

HEPATITIS B                                    2                      0                      4          3

INFLUENZA                                     8                      23                    24        24

MEASLES                                          0                      0                      0          0

MUMPS                                               0                      0                      0          0

PERTUSSIS                                        0                      0                      0          0

POLIO                                                0                      0                      0          0

RUBELLA                                          0                      0                      0          0

TETANUS                                          0                      0                      0          0

 

SEXUALLY TRANSMITTED DISEASES

AIDS                                                  13                    16                    27        34

CHLAMYDIA                                    295                  336                  579      732

GONORRHEA                                 116                  110                  250      257

HIV                                                    10                    14                    27        22

SYPHILIS                                           1                      0                      3          0

          (Primary & Secondary) 

SYPHILIS (Early Latent)                    1                      1                      1          1

 

ENTERICS

AMEBIASIS                                        0                      2                      0          3

BOTULISM-INTESTINAL                0                      0                      0          0

CAMPYLOBACTERIOSIS                9                      9                      20        16

CHOLERA                                         0                      0                      0          0

CRYPTOSPORIDIOSIS                    0                      0                      0          1

E. COLI O157:H7                              0                      1                      0          1

GIARDIASIS                                      10                    5                      17        17

ROTAVIRUS                                      76                    65                    215      127

SALMONELLOSIS                            3                      17                    24        31

SHIGELLOSIS                                   3                      0                      5          0

TYPHOID FEVER                            0                      0                      0          0

YERSINIOSIS                                    0                      0                      0          0

 

ANTHRAX                                         0                      0                      0          0

BOTULISM INTOXIFICATION       0                      0                      0          0

BRUCELLOSIS                                  0                      0                      0          0

COCCIDIOIDOMYCOSIS                2                      0                      5          3

ENCEPHALITIS                                0                      0                      0          0

HANTAVIRUS                                   0                      0                      0          0

HEMOLYTIC UREMIC

SYNDROME (HUS)                          0                      0                      0          0

HEPATITIS C                                    0                      0                      0          0

LEGIONELLOSIS                             0                      0                      0          0

LEPROSY (HANSEN'S DISEASE)  0                      0                      0          0

LEPTOSPIROSIS                               0                      0                      0          0

LISTERIOSIS                                     1                      0                      1          0

LYME DISEASE                                0                      0                      0          0

MALARIA                                           0                      0                      0          1

MENINGITIS,

ASEPTIC/VIRAL                               3                      5                      6          9

MENINGITIS, BACTERIAL             3                      3                      6          5

MENINGOCOCCAL DISEASE       2                      2                      3          5

PLAGUE                                            0                      0                      0          0

RABIES (HUMAN)                            0                      0                      0          0

RELAPSING FEVER                        0                      0                      0          0

RSV (RESPIRATORY                        348                  590                  691      891

          SYNCYTIAL VIRUS)  

ROCKY MOUNTAIN

         SPOTTED FEVER                   0                      0                      0          0

TOXIC SHOCK SYNDROME          0                      0                      0          0

TUBERCULOSIS                               6                      5                      13        8

TULAREMIA                                     0                      0                      0          0

     *Numbers include confirmed and probable cases

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Classifieds

  • FOR LEASE, MEDICAL OFFICE:  Del Webb Medical Plaza in Green Valley, approx. 2335 sq. ft., turn key with four exam rooms, one procedure room and nice decor. Call Connie at 702-951-0770.
  • OFFICE SPACE AVAILABLE. Desert Professional Plaza, 2225 E. Flamingo Rd., Ste. 103 (Across from Desert Springs Hospital). 1160 sq. ft., 3 exam rooms w/sinks, phones stay, computer wired, furniture and some medical equipment stays if desired. Reasonable rent, utilities included. Full/PT rental considered. Call 734-2292, Dr. John Pinto/Deena.
  • X-RAY EQUIPMENT. Like new! 500 MA Continental 125 KV with high frequency generator. Wall Bucky stand. Four-way float table. Floor rail mounted tube stand. Konica table model automatic processor. Cassettes - other accessories. New $20,000.00. Yours for only $9,800.00. Please call Family Medical Group, Evelyn (702) 459-5500.
  • ADDICTION MEDICINE/MD SEEKS physician to help cover addiction medicine hospital practice - weekends and vacations. Psychiatrist or medical physician with experience in addiction medicine preferred, but training is available for interested MD’s. Please contact: Mel Pohl, MD 256-9255.
  • FOR SALE - MEDICAL OFFICE EQUIPMENT and furniture. Excellent condition. Includes electric exam/treatment tables, Chattanooga Intelect combo therapy units, supplies, fully equipped X-ray room (Bennett), exercise rehabilitator, chairs, desks, office equipment, etc. For more information, call Alison (702) 252-7246.
  • CLASSIFIED ADS ARE FREE (up to 40 words) for members of the Clark County Medical Society (an $85 value). For information about classified or display advertising, call Deborah Barton at CCMS, 739-9989. Members can fax their classified ad to 739-6345.

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