Family practitioner awarded $20 million in Humana retaliation case

Texas Medical Assoc. 11/20/2000

A Corpus Christi jury awarded nearly $20 million to John Paul Schulze, MD, on Nov. 17 in his civil suit against Humana, Inc., two of its subsidiaries, a medical director, and an administrator.

The judgment follows Dr. Schulze’s claim that Humana wrongfully deselected him from the plan, slandered and defamed him, interfered with his relationship with patients, and maliciously reported him to the Texas Board of Medical Examiners and National Practitioners Data Bank after Dr. Schulze publicly complained about Humana’s mandatory hospitalist program.

“This decision means that physicians who advocate for their patients do have a remedy when a managed care entity tries to seek retribution for a stance that they’ve taken,” said TMA General Counsel Donald P. Wilcox, JD. “They better be above board or the jury will likely send them an expensive message.”

"We will be vigorously appealing the decision," Humana spokesman Ross McLerran told the Corpus Christi Caller-Times.

The Corpus Christi family practitioner’s troubles with health plan began in a 1996 meeting of Humana’s primary care physicians in the area when he “voiced strong opposition” to Humana’s proposal to require hospitalists to assume primary responsibility for hospitalized patients. Shortly after that, according to the complaint Dr. Schulze filed with the 319^th District Court in Corpus Christi, the defendants “undertook a series of actions with the express purpose of discrediting Dr. Schulze, in order to remove him from the plan.”

In early August 1997, Humana notified Dr. Schulze that he was to be terminated from the plan. Three weeks later – before Humana had acted on Dr. Schulze’s appeal of the deselection – Humana officials “descended upon Dr. Schulze’s office, without prior notification or warning, advised that he had been immediately terminated as a provider un the plan, and removed his patients’ files.” In correspondence and review hearings, Dr. Schulze complained, the defendants alleged that he “was unfit to practice medicine, and represented an ongoing threat of harm to his patients.”

The complaint also alleged that Humana:

• Implied to his patients that Dr. Schulze had abandoned them without notice;
• Reported him to the National Practitioners Data Bank and SBME, which led to “unwarranted scrutiny from other providers and difficulty in obtaining credentials under other plans”;
• Terminated Dr. Schulze from other area health plans they subsequently bought; and
• Sent his patient files to other physicians “without allowing Dr. Schulze the opportunity to defend himself against the unsubstantiated, untrue allegations made by defendants concerning his fitness to practice medicine.”

The jury’s verdict included $4.425 million in actual damages ($3 million for pain and suffering), $500,000 for attorneys’ fees, and punitive damages of $8 million against Humana and its subsidiaries, $6 million against the plan’s medical director, and $1 million against the plan’s primary administrator in Corpus Christi.

While the jury was deliberating, Humana filed a motion to seal all of the records in the case. The judge has scheduled a hearing on that motion for Dec. 7.

Dr. Schulze, 70, is a member of TMA, the American Medical Association, and the Nueces County Medical Society. He was a member of the TMA House of Delegates from 1984 through 1996. He is a 1955 graduate of the University of Texas Southwestern Medical Center in Dallas.