Utah doctor can pursue libel case against state over fraud claims

After Utah neurologist Taj Becker, MD, refused to cave to what she says were state threats of criminal prosecution if she didn't settle billing fraud claims, she spoke out to lawmakers about the alleged intimidation.

When Dr. Becker saw her name posted on a state fraud agency's Web site in a news release insinuating she was guilty -- even though civil and criminal charges filed against her already had been dropped -- she fought back in court.

A federal appeals court handed Dr. Becker a preliminary victory in July. A three-judge panel of the 10th U.S. Circuit Court of Appeals said she can sue the state for libel and retaliation.

State officials say they have no plans to appeal the ruling. Dr. Becker's case returns to a lower court where a judge will decide whether to proceed to trial.

Physicians and legal experts say Dr. Becker's circumstances are not uncommon and that the 10th U.S. Circuit's decision could give doctors some recourse for the reputational harm improper investigations can cause.

Her attorney, Robert R. Wallace, said she sued "to stop a practice [she] felt was highly improper. This was a huge detriment to her personally and financially."

He said the decision is significant because the odds are typically stacked against doctors in fraud cases. Even if doctors did nothing wrong, they are often forced to settle to avoid the publicity of a criminal complaint and higher penalties.

Samuel B. Benham, a health care fraud and defamation lawyer with Las Vegas-based Hunterton & Associates, said that depending on state laws, libel or retaliation claims can be difficult to pursue.

Benham said a ruling such as this one might make investigators think twice and "do a little better research and background before threatening criminal or civil action just to force a settlement."

But Utah Assistant Attorney General J. Clifford Petersen said the decision is limited to just one, isolated case. He said it is a step in the process and that the case likely will proceed to trial for a jury to decide.

Petersen also noted that the court turned down Dr. Becker's claims that authorities violated her due process and search and seizure rights.

Wallace declined to comment on those claims.

Systematic changes

Dr. Becker's victory comes nearly nine years after fraud investigators showed up on her doorstep in November 1998 to look into alleged upcoding of Medicaid claims, court records show.

Two months later, she drove 300 miles from St. George to Salt Lake City at the government's request for an impromptu settlement conference. Asserting her innocence, Dr. Becker turned down two offers to pay $107,000 and $49,605 in civil penalties, instead of facing criminal charges, according to court documents. The state later filed a $25,000 civil claim against her. Again Dr. Becker refused to settle, and the suit was dropped.

After that, Dr. Becker wrote to federal and state lawmakers to report what she believed were bullying tactics by the fraud unit against innocent rural doctors who could not afford a legal fight. At the time, a number of rural doctors voiced concerns about similar pressures.

On Jan. 11, 2000, Dr. Becker's husband testified about the abuses before a legislative committee, and, the same day, the state filed criminal fraud charges against her, the ruling states. Authorities later withdrew the complaint, citing "irregularities" in the investigation, such as improperly securing subpoenas for medical records and failing to document settlement meetings.

On Jan. 12, 2001, the Medicaid fraud unit published a report of Dr. Becker's case on its Web site, saying it was closed due to "political pressure." The agency pulled the report three months later.

Dr. Becker sued the state in January 2002, accusing authorities of libeling her and retaliating against her for denouncing their actions.

The 10th U.S. Circuit said she showed ample evidence to pursue those claims, citing the Web report as key evidence in their decision.

"The Internet publication uses loaded jargon ... to imply that Becker is guilty as charged," the opinion states.

"To compound the implication, [it] tells the reader that [Dr.] Becker's case had been referred to another state agency for collection of 'overpaid Medicaid funds,' a clear statement that [she] had committed fraud against the state and was let off the hook for other reasons."

The court also found that Dr. Becker's criticisms were part of a larger public debate and may have instigated the criminal charges that ensued.

Utah Medical Assn. spokesman Mark Fotheringham said Dr. Becker's ordeal, along with similar complaints from doctors across the state, prompted some changes in the way the state handles health care fraud cases. The UMA was not involved in the lawsuit, but met with state officials in the past to address the issue.

"If a doctor is sitting in his office just taking care of patients and suddenly there are armed officers in his waiting room accusing him of doing things that would generally harm his reputation, it sure can be an inconvenience and upsetting to physicians and their patients if it is done publicly," Fotheringham said.

He said the attorney general's office assumed oversight of fraud cases from the Dept. of Public Safety around 1999. Since then, better due process procedures were put in place and the UMA has received fewer complaints from doctors.

"But we still have our eyes open" for potential abuses, he said.