COVER STORY
Do these doctors give medicine a black eye?

With billions of dollars at stake in the fen-phen case, a judge raises questions about legal and medical ethics.

By Berkeley Rice
Senior Editor

In the giant class action "fen-phen" case, with billions of dollars in settlement funds at stake, a federal judge has questioned the conduct of two plaintiffs' law firms and two medical experts, and civil suits have been filed against those experts for intentional fraud. Among the revelations that have emerged:

A Kansas City cardiologist earned more than $3 million from plaintiffs' firms in less than a year by supervising and interpreting more than 10,000 echocardiograms. "Her practice resembled a mass production operation that would have been the envy of Henry Ford," commented the judge.

When questioned about 750 echos she did for two law firms, the cardiologist acknowledged that she spent only a few minutes reviewing each one. She found evidence of "moderate to severe" mitral regurgitation in 60 to 70 percent of the cases she examined for those two firms—far higher than the 5 percent rate that she and other independent reviewers had found in an earlier study of fen-phen patients.

A New York cardiologist who conducted hundreds of echocardiograms for plaintiffs' firms received an extra $1,500 for those in which he found evidence of sufficient damage to qualify for benefits. The judge called this apparent contingency arrangement "highly questionable," and said it "adversely affected" the doctor's credibility.

In late 2002, worried that many fen-phen claims had "no reasonable medical basis," the judge ordered a suspension of payments on all pending claims submitted by the two plaintiffs' firms or certified by their two medical experts until they are audited.

This September, lawyers for the settlement trust filed a civil suit against the Kansas City cardiologist, charging that she had "engaged in a pattern of racketeering activity and intentionally defrauded" the trust by "submitting misleading and false medical evidence to support illegitimate claims" for which the trust has paid many millions of dollars. Her lawyer denies those charges.

In November, trust lawyers also filed suit against the New York cardiologist, alleging that he had certified that "certain claimants had serious valvular heart disease when he either knew that they did not or knew he had no reasonable basis for certifying that they did." His lawyer had no comment.

While some of the fen-phen claims the judge put on hold may be legitimate, the following account, based largely on court records, explains the growing controversy over questionable claims, and shows how massive class action suits may potentially be abused.

Popular diet drugs and claims of heart valve damage

In 1997, after a Mayo Clinic study and an FDA advisory warned of a possible link to heart valve damage, American Home Products recalled its diet drugs Pondimin (fenfluramine) and Redux (dexfenfluramine). Both drugs, marketed by AHP's subsidiary Wyeth, were often prescribed and taken with phentermine, a combination popularly known as "fen-phen." In 1999, AHP settled a multibillion dollar suit with a consortium of law firms representing fen-phen patients who claimed they'd suffered heart damage as a result of taking the drugs.

Many of the fen-phen claims were eventually consolidated into a single federal class action case and assigned to the US District Court in Philadelphia. The presiding judge created a trust to administer the settlement fund, and appointed a committee of lead plaintiffs' lawyers ("class counsel") to direct the rapidly mushrooming litigation. The settlement was designed to provide injured patients with a streamlined process for seeking compensation from the trust fund instead of filling the courts with individual lawsuits.

One reason AHP agreed to the settlement was to avoid the risk of much higher payments to individual plaintiffs who decided to "opt out" of the class action and file claims in state courts instead. About 90,000 have since done so. In cases that have gone to trial, some juries have awarded millions of dollars to individual patients; an Oregon plaintiff won a $48 million verdict.

To qualify for benefits under the settlement guidelines, claimants must demonstrate moderate to severe mitral regurgitation—as measured by an echocardiogram and confirmed by a board-certified cardiologist. While about 6 million people took the drugs, approximately 35,000 were likely to have suffered such damage, according to conservative estimates. But as word of the potential fen-phen jackpot spread, more class action claims were filed, and the total is now projected to reach about 75,000. The prospect of gaining a share of the settlement fund created a feeding frenzy among the country's plaintiffs' lawyers. By August 2002, nearly 1,500 firms had submitted claims to the settlement trust. Over three years, the top 10 firms spent an estimated $48 million for TV ads in which they solicited fen-phen clients and offered free cardiac screenings.

To cover the deluge of claims, AHP (which changed its corporate name to Wyeth in early 2002) gradually increased its class action settlement reserve to $4.75 billion. But at the rate claims were coming in, even that sum might not have been enough to cover them all. Payments on early claims ranged from $7,000 to $1.4 million—depending on the degree of damage—and were averaging $400,000 each.

Early doubts about fen-phen claims

Before the settlement was reached, a 1998 study sponsored by Wyeth found moderate or greater mitral valve regurgitation in about 5 percent of those who had taken fen-phen. As the claims poured in, however, a surprisingly high percentage of those submitted by some law firms cited that level of damage. "The high concentration of filings by a small number of law firms who have advertised extensively, and appear to have conducted en masse echocardiographic screening of their clients presents the danger of systematic abuse of the claims process," argued the attorneys for Wyeth and the class counsel.

Wyeth hired Harvard Medical School professor Arthur Weyman, a leading authority on echocardiography, to review a representative sample of 302 echo tapes accompanying claims submitted for payment. He concluded that two-thirds of them did not qualify for compensation.

Attorneys for Wyeth, the trust, and the class counsel were particularly troubled by claims submitted by two closely associated New York law firms: Napoli, Kaiser, Bern & Associates and Hariton & D'Angelo. The Napoli firm asserts that it "has represented more fen-phen clients than any other law firm in the US." The Hariton firm, established in 2001 solely to handle fen-phen claims, has a medical staff of more than 60 people, including nurses and sonographers, and has its own echo equipment.

When another expert cardiologist retained by the trust reviewed a sample of 120 claims submitted by the Napoli and Hariton firms—for which the trust was scheduled to pay a total of $50 million—he asserted that only seven actually qualified for payment under the settlement guidelines.

In response to motions by Wyeth, the trust, and the class counsel, presiding Judge Harvey Bartle III held a hearing in September 2002 to examine 78 of the Napoli/Hariton claims. All of them had been certified by Linda J. Crouse, of Kansas City, MO, or Richard Mueller, of New York City—both experienced, board-certified cardiologists who specialize in echocardiography. At that hearing, an expert cardiologist hired by the trust testified that none of those 78 claims met the standard of "medical reasonableness."

Questions about exams by a very busy doctor

From late February to early July 2002, Crouse was very busy. On the days she scheduled echocardiograms for Hariton and Napoli clients, she supervised and interpreted up to two dozen a day. Each exam took about 30 minutes, and was performed by her sonographer. The firms paid her $1,000 each for 725 echos, for a total of $725,000.

In addition, over a 10-month period Crouse also reviewed about 10,000 echos—doing 300 or more a week—for a Texas-based consortium of law firms handling fen-phen claims. For those, she earned a total of $2.5 million, although at the time of the hearing she testified that she had not received full payment. During this time, she continued her private practice, although she reduced it to four half days a week to make time for the fen-phen echos.

Attorneys representing Wyeth and the class counsel questioned Crouse's productivity, as well as her medical judgment. "It strains credulity," they contended in a joint motion to the court, "to believe that one doctor working part time for 10 months could competently read and interpret so many echocardiograms in accordance with the appropriate medical standards, . . . not to mention interview the clients or review relevant medical records to obtain an appropriate medical history."

Judge Bartle was also struck by Crouse's output. "Considering the thousands of echocardiograms that Dr. Crouse interpreted during the period that she worked for the Hariton and Napoli firms," he observed, "her practice resembled a mass production operation that would have been the envy of Henry Ford." According to Judge Bartle, the circumstances under which Crouse interpreted the echos "undermine her credibility."

Thomas W. Wagstaff, Crouse's attorney at the time, insisted that his client "is anything but a fraud. The reason she can do it quickly is because she is good," he explained. "Since when is being good and being paid for being good a crime?" As for the accuracy of her judgments, Wagstaff commented: "There clearly are different interpretations that can be put on the echocardiograms, just as in any medical situation."

Questions on number of claims and pattern of exams

At the hearing, Crouse acknowledged that she was present in the exam room only 10 percent of the time when the echos were done. She testified that she typically spent about 2 to 3 minutes reviewing each of the "easy" cases, and 6 to 7 minutes on more difficult cases.

Overall, Crouse found moderate to severe mitral regurgitation—the levels required to qualify for payment under the settlement guidelines—in 60 to 70 percent of the claims she examined for Hariton and Napoli clients. Yet several years earlier, when she had interpreted 600 echoes in the Wyeth-sponsored study, she had detected those levels of damage in only 5 percent of the fen-phen users—roughly the same percentage found by the other cardiologists who participated in that study. (Crouse contends that the higher damage rate she found among class action plaintiffs is due in part to improvements in ultrasound technology since the earlier study, and to differences in evaluation methodology.)

Crouse signed the required "green form" for each claim—which includes the patient's medical history—without meeting the patients, reviewing their medical records, or taking their histories. When questioned about this, she replied: "It is the law firm's duty to take a history."

Before the exams, each client had signed a "hold harmless" waiver acknowledging that they had "no physician/patient relationship" with the cardiologist, and absolving her of any liability for negligence. During the hearing, a Wyeth attorney asked Crouse if she had told the patients whose exams indicated at least moderate valve damage about their condition. Crouse said she hadn't.

"You took no responsibility with these people who you believed had moderate mitral regurgitation to give them a copy of their tape so they could be evaluated by another physician?"

"That is correct," she replied, saying the tapes were the law firm's property.

Crouse said she had urged some of those patients to seek medical care, but hadn't provided them with copies of their echo reports because she believed the lawyers would do so.

Was this medical expert working on contingency?

The other cardiologist whose work was examined at the hearing was Richard L. Mueller, who testified that he did echoes for 250 to 300 Hariton clients and found at least moderate mitral regurgitation in 25 to 30 percent of them. In addition to running a busy private practice in New York City, Mueller has served as an expert witness for several New York area law firms. Ironically, he has also been a frequent speaker at physician education meetings sponsored by Wyeth.

Unlike Crouse, Mueller initially conducted most of the exams himself, spending about an hour on each one. He met with each patient after the exam and summarized his findings. When there was evidence of a clinically significant heart condition, he urged them to obtain a copy of the echo report, and to consult a physician. (Some of them then became Mueller's patients, just as some of those in whom Crouse found similar conditions became her patients.)

Later, the law firm told him that its own nursing staff would take the histories and fill in that part of the green form. Mueller questioned the firm about the propriety of this arrangement, but finally agreed to it. When the trust's lawyer asked how he could be sure of the accuracy of such data without taking the history himself, he testified that he accepted the information the firm provided on the form. When he did raise questions about that process, he recalled, "I was reassured several times that they were paying great attention to getting those details right."

Mueller initially received $900 to $1,000 for each echo, and $1,000 to $2,000 for filling out each green form. But after the law firm developed "cash flow" problems, it came up with a new payment schedule for the green form: $500 up front, plus $1,500 due "upon receipt of the client's settlement proceeds, or six months from the date of submission" to the trust.

According to Judge Bartle, this "contingent nature of a portion of Mueller's fee adversely affected his credibility," since he would earn the extra $1,500 only if he found moderate or severe mitral regurgitation. "This highly questionable practice" by the Hariton firm, said Bartle, "seems to violate a lawyer's ethical obligation not to compensate a witness on a contingent fee basis." He stated that he would refer the matter to the New York State professional disciplinary authorities for review. (When asked by Medical Economics if the firm was under investigation, those officials would not comment.)

Defending the trust against illegitimate claims

Based on the hearing, the attorneys representing Wyeth and the class counsel argued that the claims process had been "tainted" by an inordinate number of claims with "no reasonable medical foundation." They sought an injunction halting payments on all claims submitted by the Napoli and Hariton firms or certified by Crouse and Mueller.

In response, Judge Bartle stated: "The Trust's ability to meet its part of the bargain and pay legitimate claims is being undercut by the tender of claims that have no reasonable medical basis." Accordingly, in September 2002, he suspended payments on all pending claims submitted by the Hariton and Napoli firms or certified by Crouse and Mueller, and authorized the trust to audit claims involving the two firms and the two cardiologists.

Both firms appealed the suspension. Marc Bern, a Napoli partner, told the Philadelphia Enquirer that Judge Bartle had "misconstrued the evidence," and insisted that all the firm's claims were justifiable. The firm's Web site points out that the judge's order doesn't prevent the firm from resubmitting the disputed claims with new echocardiograms (if they're not conducted by Crouse or Mueller), and promises that "the Napoli and Hariton firms will continue to zealously represent their clients in the future."

In November 2002, in response to a motion in which attorneys for Wyeth and the class counsel charged that the settlement was being "scammed" by illegitimate claims, Judge Bartle extended his audit authorization to cover all fen-phen claims, not just those submitted by the two law firms and certified by Course and Mueller. "Based on the evidence in the record," he wrote, "prudence dictates no less." The trust fund, he pointed out, "exists for the benefit of these rightful claimants who suffered from fen-phen, and not as a pot of gold for lawyers, physicians, and nonqualifying claimants."

In September of this year, attorneys for the settlement trust filed a civil suit against Linda Crouse, charging that she had "engaged in a pattern of racketeering activity and intentionally defrauded" the trust by "submitting misleading and false medical evidence to support illegitimate claims." (A lawyer representing Dr. Crouse called those charges "baseless.") The suit seeks compensatory damages for the millions of dollars the trust paid on those claims, punitive damages for Crouse's alleged misconduct, and treble damages under the federal racketeering (RICO) statute.

In November, the trust also filed a suit against Richard Mueller, alleging that he had "intentionally defrauded" the trust by certifying that some claimants qualified for settlement benefits "when he either knew that they did not, or knew he had no reasonable basis for certifying that they did." The suit also accuses Mueller of "conspiring with a law firm . . . in order to earn substantial additional contingent fees" in exchange for those certifications. (When we went to press, both Mueller and his attorney said they had not seen a copy of the suit, and therefore had no comment.)

Asked if they plan to file similar suits against other doctors who may have certified questionable claims, the trust's lawyers would not comment. There may, in fact, be such suits. Attorneys for Wyeth submitted a brief to Judge Bartle in September claiming evidence of "systematic abuse" of the claims process by 10 other cardiologists who collectively certified about 15,000 fen-phen claims as qualifying for settlement benefits. Based on depositions by those doctors, Wyeth asserted that many had never seen the patients, never reviewed their medical records, and relied entirely on the plaintiffs' firms for the patients' histories.

Wyeth contends these cardiologists reviewed tests that were typically "conducted at immensely profitable 'echo mills' by itinerant and unsupervised technicians operating in nonmedical facilities such as hotel rooms." At least five of these doctors, says Wyeth, earned more than $1 million for such "assembly-line" activity. One reviewed about 13,000 echos working only on weekends, and earned $2.5 million. Another reviewed about 9,000 echos, and certified more than 1,800 claims. Working only part time, the drug maker contends he earned a total of about $5 million over 17 months.

Some of these cardiologists worked under fee arrangements similar to Mueller's, which paid them considerably more for certifying the claims than for reviewing the echos, Wyeth says. For example, one received $250 for reading each echo, and $1,500 for completing a certification form. The Wyeth brief suggested that such a "skewed" payment system was likely to encourage biased echo readings and unjustified claims.

A dubious test for fen-phen damage

In August 2002, Deborah Toews, an RN in Fresno, CA, saw a TV ad in which a law firm—not one of those described in the accompanying article—offered free echocardiograms to people who had taken the "fen-phen" diet drugs. She made an appointment for the following week at what turned out to be a local hotel.

When she showed up there, Toews was greeted by a lawyer who asked her to fill out a medical form, and to sign a contingency agreement under which the law firm would receive 40 percent of any benefits she received from the class action settlement. She was then led into one of the bedrooms of the suite where technicians conducted the echo exam. There was no doctor present.

After the exam, the lawyer and another man—not a physician—discussed the test results. They told her she had a "very serious" heart problem and would need to file a claim quickly in order to win money from a lawsuit. She asked for a copy of her echo report, but the lawyer told her she couldn't get it until the firm's cardiologist had reviewed it.

Toews left feeling "terrified at the possibility of having a life-threatening illness." Despite repeated calls to the cardiologist's office for confirmation of her results, she never received a reply. "I find it amazing," she says, "that a doctor would not contact a patient under these circumstances."

Toews finally consulted her primary care physician, who referred her to another cardiologist. He examined her, performed an echocardiogram, and told her the test results were normal, with no evidence of significant heart damage.

Looking back on her experience, Toews says, "I feel that the hotel room echo that I received is not good medicine, but rather part of a scheme to obtain money from the settlement for people who are really not sick."

The doctors reply

The presiding judge in the fen-phen case has questioned the conduct of Linda Crouse and Richard Mueller, the two cardiologists profiled in the accompanying article. Both contend, however, that the dispute over their evaluations involves a difference of medical opinion. In response to a draft of this article, Crouse points out, "These patients were not being seen for a comprehensive history and physical exam, but were rather being referred to our laboratory for the specific purpose of obtaining high quality echocardiograms. There was no physician-patient relationship, and highlighting the absence of such a relationship in my case seems unfair and pejorative.

"In the absence of a physician-patient relationship, it would have bordered on unethical and unprofessional conduct to have provided patients with copies of their studies, to have informed them of the results of their studies, or to have made any medical or other recommendation. Following the studies, any patient that was felt to have a significant valve problem was offered an office visit, either at that time or later." Some of those patients accepted her offer.

As for the $3.25 million she earned for doing more than 10,000 echos, Crouse explains, "The only way for me to have interpreted such large numbers of studies was to scale back my clinical practice substantially. The large sums that the article suggests were paid to me personally should be interpreted in the light of the costly resources required to perform, interpret, report, archive, mail, and track such a large number of studies. The implication that this was easy money is unfair, and in my opinion, pejorative."

Mueller's fee arrangement with the law firm that hired him to examine its clients presents a different issue. Judge Bartle noted that part of Mueller's fee was "contingent" in nature. He noted that Mueller "had a financial incentive to reach a particular result."

Mueller and the law firm that hired him both deny that the fees he received were contingent upon his findings. Upon reviewing a draft of this article, Mueller's lawyer wrote: "The article depicts Dr. Mueller as a physician who fabricated medical findings for monetary gain, which Dr. Mueller categorically denies."

Berkeley Rice. Do these doctors give medicine a black eye?

Medical Economics

Dec. 19, 2003;80:58.