Health Plan of Nevada must pay $500 million in punitive damages for its role in the 2008 hepatitis C outbreak, a jury decided Tuesday.
The same eight-member jury last week awarded $24 million in compensatory damages to three people, two of whom contracted hepatitis C at a facility operated by Dr. Dipak Desai, the central figure in the outbreak.
The $524 million total award is believed to be the largest in Nevada’s history for a single case.
Plaintiff lawyer Robert Eglet said the jury’s verdict sent a strong message to HPN, its former parent company Sierra Health Services and every health insurance company in the U.S.
“You cannot go around grinding the doctors’ reimbursement rates down and expect to be able to provide quality health care to your insured members. The health care industry needs to wake up,” the lawyer said.
Eglet on Monday asked for $2.49 billion in punitive damages, or about 15 percent of HPN’s and Sierra Health’s profits over a 10-year period.
HPN said in a statement that it had a compelling case for appeal and that the $500 million award “has no grounding whatsoever in reality — it represents fantasy damages, not punitive damages.”
During the two-month civil trial before District Judge Timothy C. Williams, Eglet — who represents Bonnie Brunson, 70, and her husband, Carl, 71 — said that in 1992, HPN dropped Desai from its network of doctors because of quality concerns, only to reinstate him five years later because of his high-patient-volume, low-price bid.
The third plaintiff, Helen Meyer, 76, was represented by lawyer Will Kemp.
At Eglet’s law office, a block from the downtown Regional Justice Center, Meyer and Bonnie Brunson said they were relieved.
“All I just wanted to do was to tell my story,” Brunson said.
She said that for three years she had no idea how she had contracted the disease.
Health investigators traced the infections of Brunson, Meyer and other patients to procedures at endoscopy clinics owned by Desai. In early 2008, the outbreak became public when the Southern Nevada Health District notified more than 50,000 people to get tested for blood-borne diseases, including hepatitis and AIDS.
“I pray this will be a big giant step in the direction that the big HMOs will do the right thing now,” said Brunson, who wants to help educate others about the outbreak and the disease.
Brunson is considered to be cured of the disease after undergoing a rigorous treatment program that is akin to the worst kind of chemotherapy for cancer.
The treatment failed for Meyer, who said the case wasn’t about the money. “It’s about being able to hire decent doctors and pay them a good rate,” she said.
When asked what is next for her, Meyer quipped, “Go home and relax.”
HPN probably will not fork over the money easily.
The company said in a statement that if the award is allowed to stand, it will affect the 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,” the statement said.
And if earlier civil cases in the hepatitis C outbreak are any indication, there may be a settlement for less than the jury award.
In 2011, Eglet and Kemp won $505 million in the first hepatitis C civil case against international drug company Teva Pharmaceuticals, which they blamed for recklessly supplying large 50-milliliter vials of the anesthetic propofol to Desai’s clinics. Doses of 10- to 20-milliliters are common for outpatient colonoscopy cases.
The lawyers won two more cases for a total of $800 million.
However, while on appeal, Teva settled 120 lawsuits for $285 million.
On Tuesday, Kemp said it would be in HPN’s best interest to resolve the case as well.
More than 40 cases are pending against HPN, he said.
“It’s really up to the HMO. We can get it resolved. We’ve already proved that by resolving the Teva case,” Kemp said.
HPN lawyer Lee Roberts indicated the legal fight was far from over.
“The verdict should not survive constitutional scrutiny by the Nevada Supreme Court, and we look forward to the opportunity to fully and fairly defend these claims in a new trial,” Roberts said.
The third phase of the case will begin today with a bench trial before Williams. The plaintiffs will seek damages from HPN that the company should have paid after the settlement with Teva.
Meanwhile, Desai is scheduled for trial on criminal charges, including second-degree murder, in District Court this month and in federal court in May. But his lawyers have said in recent weeks that he has suffered another stroke –– a condition that previously delayed court proceedings.
Contact reporter Francis McCabe at fmccabe@review
journal.com or 702-380-1039.