Two units of Unitedhealth Group, Inc. (UNH) - Health Plan of Nevada and Sierra Health Services - were awarded $500 million in punitive damages by a Nevada jury in a case related to an outbreak of Hepatitis C in the state in 2007.
The units are accused of failing to oversee Dr. Dipak Desai, who reportedly gave colonoscopy patients hepatitis C by repeated use of anesthetic vials and not sterilizing equipment.
The same jury recently asked the units to pay $24 million in compensatory damages to Desai's former patients Bonnie Brunson and Helen Meyer, who contracted hepatitis after colonoscopies done by the doctor.
The state officials had notified around 50,000 patients that they may have contracted the disease due to the gastroenterologist's shoddy medical practices.
Meanwhile, Health Plan of Nevada or HPN issued a statement regarding the punitive damages award in the Meyer/Brunson case that recently concluded at the Clark County Courthouse, stating that the figure represents fantasy damages and not punitive damages.
"The number announced today has no grounding whatsoever in reality - it represents fantasy damages, not punitive damages. We have a compelling case for appeal since the jurors were barred from hearing extensive evidence and testimony about how Dr. Desai's covert, criminal practices were hidden from the entire community, including Health Plan of Nevada,'' the firm said.
HPN said the jury did not hear that Dr. Desai has been criminally charged for the outbreak and that the same plaintiffs already sued and collected millions from a pharmaceutical company.
Dr. Desai and others were credentialed or accredited by other HMOs, hospitals and the Accreditation Association for Ambulatory Health Care, the unit said, adding that several government agencies had inspected the clinic where these providers practiced during the relevant period and no issues were found.
According to HPN, even more troubling is that the court held that placing Dr. Desai in HPN's network caused the plaintiffs to contract Hepatitis C because plaintiffs' Hepatitis C was the result of Desai's medical malpractice and a doctor's medical malpractice is always a foreseeable consequence of placing him in a health plan's network.
HPN said if allowed to stand, this would have a devastating impact on the availability and affordability of health insurance in Nevada. "The only numbers that matter here are the higher insurance premiums that Nevadans may pay if health plans are held liable for the criminal conduct of independent doctors," it said.
UNH closed up 0.5 percent on Tuesday at $62.18.
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