Insurance company wants cap on payments in hepatitis C cases

By Steve Green

Wednesday, Feb. 10, 2010 | 9:17 a.m.

An insurance company is suing to cap payments to patients who say they were exposed to hepatitis C and other diseases at the Endoscopy Center of Southern Nevada.

American Casualty Company of Reading, Pennsylvania, filed suit last week in Las Vegas against 15 people who were patients -- or family members of patients -- potentially exposed to infectious diseases at the clinic, which closed in 2008 after investigators determined the re-use of anesthesia vials and syringes could have spread diseases among patients.

The Southern Nevada Health District later found that as many as 63,000 patients at the Endoscopy Center and the associated Desert Shadow Endoscopy Center could have been exposed to infection through reuse of vials containing the anesthetic propofol and syringes used to administer the drug.

Of that number, nearly 5,000 former patients have sued Dr. Dipak Desai and his clinics, with about 300 claiming they were infected with the hepatitis C virus and others seeking damages for having to live in fear that they, too, could have been infected.

In a December report on the outbreak, the health district said nine cases of hepatitis C were genetically linked to the centers, and 106 more were possibly linked.

Last week's lawsuit in federal court focuses on Mary Grear, who is identified in endoscopy litigation in Clark County District Court as a supervising pharmacist and, according to lawsuits, did business as Mary Grear LLC and Pharmacy Consulting Services Group.

Grear "established policies and procedures for and supervised the ordering, supplying, dispensing and/or administration of anesthesia at the clinic," some of the state court lawsuits say.

The patients say in the suits they were treated with "contaminated medical equipment and/or medications that were previously exposed to unknown persons at the clinic," including vials of propofol.

The insurance company says in the lawsuit that Grear has denied wrongdoing.

The company says the professional liability policies it provided Grear limited its liability to $1 million for each claim up to a cap of $6 million between Oct. 15, 2004, and Oct, 15, 2006. The policy had limits of $1 million per claim up to a cap of $3 million from Oct. 15, 2006, to Oct. 15, 2008, the lawsuit says.

The patients and their family members the insurance company is suing in federal court are themselves suing Grear and others in Clark County District Court and are seeking "well in excess" of $1 million from Grear's malpractice insurance, the company says.

But the Endoscopy Center claims "must be considered a single claim, subject to a single $1 million each claim indemnity limit of liability," the insurance company says in its lawsuit.

"All of Grear’s alleged acts and omissions with respect to the anesthesia constitute a single act or omission or are logically and/or causally connected by a common fact, circumstance, situation, transaction, event, advice, and/or decision," the lawsuit says.

Friday's lawsuit is only the latest in a series of legal actions filed in state court, federal court and the Endoscopy Center's bankruptcy case in which insurance companies are seeking to limit their liability to the endoscopy patients.

A related police investigation of Desai and other medical personnel associated with his clinics has been turned over to prosecutors for their review.