Nevada HMO Loses Bid to Dismiss Hepatitis C Suit

Nevada’s largest health management organization lost a bid for dismissal of a breach of contract lawsuit filed by two men who say they contracted hepatitis C during outpatient procedures at a Las Vegas clinic owned by a criminally convicted former network doctor.

Clark County District Court Judge Elissa Cadish ruled Tuesday that patients Donald Lynam and David Magana can continue to seek unspecified damages from Health Plan of Nevada, the Las Vegas Review-Journal reported.

The civil complaint blames the HMO for listing former Dr. Dipak Desai in its network of physicians.

Desai, 63, was sentenced last month to 18 years to life in prison after being found guilty of 27 criminal charges, including second-degree murder stemming from the 2007 hepatitis outbreak.

The outbreak was made public in February 2008, when health officials notified 63,000 former Desai clinic patients to get tested for potentially fatal blood-borne diseases, including hepatitis and HIV. Health officials later said more than 100 people may have been infected. Criminal charges stemmed from cases involving seven people. Two have since died.

In her ruling from the bench, Cadish mused aloud that Health Plan of Nevada may be responsible to ensure “non-negligent” credentialing.

“Otherwise, why do it?” she said.

The case is one of more than 30 seeking compensation from the HMO for what attorneys maintain were unsafe medical practices at Desai endoscopy and colonoscopy clinics.

In another case, Clark County District Court Judge Timothy Williams ruled this year that Health Plan of Nevada had a duty to monitor its network.

Cadish was assigned the Lynam and Magana case in September, after Clark County District Court Judge Douglas Smith recused himself. Smith dismissed the case once and was overturned by the Nevada Supreme Court.

Attorneys for the patients alleged that Smith was biased against plaintiffs because he had religious ties with Health Plan of Nevada lawyer Mark Hutchison. Both are leaders in the Mormon Church.

Hutchison also stepped out of the case to remove any potential conflict.

Health Plan of Nevada attorney Lee Roberts argued Tuesday that requiring HMOs to monitor network members after reviewing their qualifications would make health insurance much more expensive.

Patient attorney Matthew Sharp said that an HMO had both control over and responsibility for the well-being of network members.