The following is a summary of various accounts published in the on-line version of the Poughkeepsie Journal over the period of several years. Spyros Panos was an orthopedic surgeon at Mid-Hudson Medical Center in Poughkeepsie, New York. He was a billing machine, invoicing thirty-five millions from 2007 to 2011. On office days, he saw between sixty and ninety patients. On surgical days, he performed, on average, seventeen surgeries per 10-12 hour day. During that same 2007 to 2011 period, Mid-Hudson paid Panos 7.5 million dollars.
But then four of Panos’ s former patients transferred their care to another surgeon who noticed a discrepancy between his physical findings and those contained in the Panos medical records. The doctor reported these discrepancies to the medical board, who investigated further. The investigation revealed that Dr. Panos had billed for procedures he did not perform, or that were mischaracterized, such as documenting “open” surgeries when they were arthroscopic, etc.
In July 2011, Mid-Hudson fired Dr. Panos. In October 2013, Panos surrendered his medical license and pleaded guilty to health care fraud, admitting to running a multi-million dollar fraud scheme. In April 2014, he was sentenced to four-and-a-half years in federal prison and ordered to pay five million dollars in restitution. On March 13, 2017, he was released from prison after serving less than three years. He was immediately greeted with 256 civil lawsuits for medical malpractice, which eventually settled globally for more than forty million dollars.
Fortunately, our workers’ compensation system has safeguards against physician abuses, designed to protect both payor and patient. We have utilization review for managed care plans that serves to police attending physicians to make sure that each treatment proposal is in line with an evidence-based standard. For proposed treatment outside a managed care plan, we have medical protocols, authored by a team of medical experts familiar with our system, that set the expectations of what is reasonable and necessary. Any deviation requires a justification.
Recently, we learned that there’s more to the Spyros Panos story. During the months between his conviction (October 31, 2013) and his sentencing (April 2, 2014), Panos set up a company named Excel O, LLC, using a non-physician family member as the registered agent. He then assumed the identity of a former colleague, a licensed orthopedic surgeon, and obtained over $860,000.00 in payments for reviewing claimant files in workers’ compensation cases, including cases in Connecticut.
This raises a number of questions (including my own career choice), but I’ll focus on just one. Utilization review polices the attending physicians, but who polices utilization review? UR operates in its own parallel universe, intersecting with the WCC only after the UR appeals process has run its course, and even then, limiting the commissioner’s role to a determination of whether the UR decision was unreasonable, arbitrary, or capricious. During the UR process, the commission does not have jurisdiction to determine whether UR is following its own rules.
In the 1990’s, workers’ compensation systems borrowed the UR concept from the health insurance industry that was using it as a cost containment measure for HMOs. At its best, UR encourages peer-to-peer physician phone contact and the application of transparent, high-quality, evidence-based guidelines in a sensible and flexible manner to the unique circumstances of every case, so that medical treatment suits the individual patient, not just the patient’s chart. However, without transparency and accountability, UR subjects itself to criticism that it’s merely a tool of litigation designed to end-run commissioner discretion by substituting its own self-serving standards for one hundred years of jurisprudence defining “reasonable and necessary” medical care within the context of workers’ compensation cases.
In 2011, the Connecticut legislature addressed some of these same concerns about UR in the health care industry by enacting legislation that defined health carrier responsibilities with respect to utilization review (C.G.S. section38a-591b) and establishing UR criteria and procedures ( C.G.S. section38a-591c). These mandates include publishing on its web site “any clinical review criteria it uses, and links to any rule, guideline, protocol or other similar criterion a health carrier may rely upon to make an adverse determination . . . .” The statute also dictates specific clinical review criteria UR must use in reviewing treatment for certain conditions, such as substance use and mental health disorders.
These same standards apparently do not apply to UR in workers’ compensation cases. The WCC regulations do not require the same level of transparency and accountability with respect to the reviewing standards and their application. Perhaps, the Panos cautionary tale will signal a change. At the very least, you’d expect that a commissioner would find unreasonable, arbitrary, or capricious a UR denial that is not in line with the commission’s own medical protocols. But then again, I may just be talking apples in a system that’s bananas.
[Originally printed in the Compensation Quarterly Vol. 28 #3 Fall 2018 edition. It is reprinted with the permission of the Connecticut Bar Association.]
