Former CEO of Renaissance RX sues founder for breach of contract

Renaissance RX logo

Mr. David Guzan, the former CEO of pharmacogenetics laboratory Renaissance RX, has filed a lawsuit against Renaissance’s founder, Dr. Tarun Jolly, alleging Dr. Jolly failed to transfer a 1% ownership stake in Renaissance potentially worth $2.5 million to Mr. Guzan as promised.

Altogether there are a total of four claims in the suit, three of which do not involve Renaissance, but are nonetheless interesting in that they all involve money owed to Mr. Guzan by entities affiliated with Dr. Jolly.

Louisiana Pain Specialists

Mr. Guzan used to be the CEO of Louisiana Pain Specialists (LPS), a pain medicine practice in New Orleans founded by Dr. Jolly, who is board-certified in pain medicine and anesthesiology.  On September 30, 2014, Mr. Guzan gave LPS 90 days notice that he planned to stop working for LPS.  LPS allegedly asked Mr. Guzan to resign from LPS effective November 13, which he did.

Mr. Guzan’s contract with LPS said if he gives 90 day notice but is asked to resign sooner than the 90 day period, he is supposed to receive all compensation and benefits as if he had stayed the full 90 days.  Mr. Guzan claims he is owed $382,615.36 in salary, benefits and bonus, but has thus far not been paid, despite written demands (Claim #1).

Crescent View Surgical Center

Mr. Guzan is also the Principal of Surgical Continuum (SC) , which according to Mr. Guzan’s LinkedIn page, is a “Consulting, Development and Management Company for Office Base (sic) Surgery Practices, Surgery Centers, Surgical Hospitals and Hospital Joint Ventures with Physicians”.

SC entered into an agreement with LPS in July 2012 to build an outpatient surgical center that would be managed by a company half owned by LPS and half owned by SC.  Management fees were to equal 6% of monthly gross revenue “on a cash basis”.

In addition to the management fees, the agreement also stated SC would receive a 3.33% ownership stake in CVSC that would increase to a total of 10% after the end of the third year of operations.

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Pathology Blawg News Roundup for January 23, 2015

Physician who accepted laboratory kickbacks gets 46 months in prison Dr. Linda Rosenberg, a physician who pled guilty in February 2014 to accepting kickbacks in exchange for laboratory and radiology referrals, and for dispensing hydrocodone “outside the scope of professional practice”, has been sentenced to 46 months in prison. Dr. Rosenberg received approximately $1500 per month in sham office lease payments from an unnamed Chicago laboratory and nearly $34,000 per month from … [Continue reading]

JAMA editorial calls on Congress to curtail physician self-referral

Eli Adashi, MD (JAMA)

Dr. Eli Adashi of Brown University and Dr. Robert Kocher of the Schaeffer Center for Health Policy and Economics at the University of Southern California, Los Angeles, have published an editorial in the Journal of the American Medical Association that asks Congress to address physician self-referral abuses through the In-Office Ancillary Services Exception (IOASE) to the Stark Law.  Failure to do so, the authors say, would "constitute a costly opportunity missed." The authors base their … [Continue reading]

Health Diagnostic Laboratory requests injunctive relief from BlueWave Healthcare Consultants

Health Diagnostic Laboratory (HDL) has filed a lawsuit in US District court in Virginia and asked the court to grant an injunction against the owners of BlueWave Healthcare Consultants to prevent them from competing with HDL. Mr. Jeff Ingram, a partner at Galese and Ingram and one of the attorneys representing BlueWave, states HDL's suit is "without any merit" and is merely an attempt to intimidate BlueWave. Contents of HDL's complaint HDL alleges Robert Johnson and F. Calhoun (Cal) Dent, … [Continue reading]

Pathology Blawg News Roundup for January 16, 2015

Newspaper

Court hears case of North Carolina Medical Examiner whistleblower Kevin Gerity, a former autopsy assistant at the North Carolina medical examiner's office who claims he was forced to retire in late 2013, filed a lawsuit contending he was retaliated against for cooperating with a State Bureau of Investigation (SBI) investigation into mishandled evidence.  An initial hearing was held on January 7, 2015. Mr. Gerity alleges he found a bullet near the table upon which a homicide victim had just … [Continue reading]

BlueWave Healthcare Consultants sues Health Diagnostic Laboratory for $205 million

BlueWave Healthcare Consultants, a sales contractor for embattled clinical laboratory Health Diagnostic Laboratory (HDL), is suing HDL for $205 million for breach of contract.  Mr. John Galese, founding shareholder of Galese and Ingram and one of the attorneys representing BlueWave, was kind enough to provide a lengthy comment about this matter which is included at the end of the article. Contents of BlueWave's Complaint BlueWave and HDL entered into a contractual agreement around January … [Continue reading]

46 month prison sentence given to Polaris Allergy Labs owner for faking test results

Feds raid Polaris in July 2014 (WSBTV)

Mr. Rahsaan Garth, owner of Polaris Allergy Labs in East Point Georgia, has been sentenced to 3 years 10 months in prison followed by 3 years of supervised release, and has been ordered to pay approximately $246,000 in restitution for faking the results of allergy tests. According to the Criminal Information filed by federal prosecutors, Mr. Garth opened Polaris, which provided skin "scratch" and blood allergy testing for food and environmental allergens in both children and adults, in March … [Continue reading]

Pathology Blawg News Roundup for January 9, 2015

News 1.9.15

Connecticut Medicaid slashes laboratory reimbursement A reader from Connecticut informed me he received a communication from Connecticut Medicaid on January 3, 2015 that stated it had established "revised fees for many codes on its Consolidated Laboratory Fee Schedule" that went into effect on January 1, 2015.  The fees were revised so as to "more closely reflect pricing in other Medicaid programs and the commercial sector." I have not gone through all of the fee schedule, but the codes I … [Continue reading]

CFO of pain management clinics pleads guilty to receiving laboratory kickbacks

Vic Wadhwa, former Chief Financial Officer (CFO) of Advanced Pain Management Services in central Maryland, has pled guilty to soliciting and accepting kickbacks from an unnamed laboratory in northern New Jersey totaling almost $1.4 million from July 2011 to July 2012. Those who read the plea agreement will notice Advanced Pain's name, as well as the name of Advanced Pain's CEO, Muhammad Khan, do not appear in the text.  Those names, however, are disclosed in a separate civil lawsuit filed by … [Continue reading]

College of American Pathologists asks Palmetto GBA to withdraw ancillary stain draft LCD

In a letter to Dr. Elaine Jeter, pathologist and medical director of Medicare Administrative Contractor Palmetto GBA, the College of American Pathologists (CAP) has asked Palmetto to withdraw its draft local coverage determination (LCD) regarding the appropriate use of ancillary stains in anatomic pathology. As I discussed in a prior post, Palmetto has identified and wishes to curb inappropriate utilization of ancillary (special and immunohistochemistry (IHC)) stains by pathologists. By … [Continue reading]

Bio-Reference Laboratories countersues HunterHeart; HunterHeart responds

This is the third installment in a series of posts that describe the legal wranglings between HunterHeart (HH) and Bio-Reference Laboratories (BRLI).  Part one discussed HH's lawsuit against BRLI.  Part two detailed BRLI's answer to HH's suit.  Now I will address BRLI's counterclaims against HH and HH's response to those counterclaims. BRLI advances three counterclaims:  Declaratory Judgment against HH, Breach of Contract against HH and Chris Riedel, and Breach of Contract against HH, … [Continue reading]

Bio-Reference Laboratories answers lawsuit filed by HunterHeart

Last week I wrote about the lawsuit HunterHeart (HH) filed against Bio-Reference Laboratories (BRLI) that alleges, among other things, breach of contract and fraud.  At the time, I mentioned BRLI had filed an answer to HH's suit and advanced its own counterclaims against HH, but I could not go into detail because it would have made the post far too long. What follows is BRLI's answer to HH's allegations in the order I discussed them in the original post.  Again, because of length … [Continue reading]

Pathology Blawg News Roundup for December 24, 2014

The CAP says UnitedHealth will continue to delay its lab benefit management program in Florida. But is it?  And is BeaconLBS already spreading? In the December 18, 2014 edition of STATLINE, the College of American Pathologists (CAP) has a short article about the Laboratory Benefit Management Program (LBMP) put together by UnitedHealthCare and BeaconLBS, a subsidiary of LabCorp. The article, which is titled "UnitedHealthcare to Continue Delay of FL Pilot Program", stands in stark contrast … [Continue reading]

HunterHeart sues Bio-Reference Laboratories for breach of contract, fraud

HunterHeart

HunterHeart (HH), a clinical laboratory in northern California owned by Chris Riedel that specializes in cardiovascular testing, has filed a lawsuit against Bio-Reference Laboratories (BRLI) which alleges, among other things, breach of contract and fraud.  BRLI has filed an answer to the suit, and is also pursuing its own counterclaims against HH, but due to space considerations, I will only discuss HH's allegations at this time. HH originally filed this lawsuit in Santa Clara County … [Continue reading]

Pathology Blawg News Roundup for December 19, 2014

Mayo Clinic settles lawsuit against Dr. Franklin Cockerill From a Mayo spokesperson yesterday: Mayo Clinic and Mayo Medical Laboratories have reached a settlement with Dr. Franklin Cockerill in the lawsuit Mayo commenced against Dr. Cockerill in October 2014. In exchange for Mayo dismissing its lawsuit, Dr. Cockerill has agreed to the following terms: (1) for a period of two years, Dr. Cockerill will not work or consult for Mayo’s largest competitors, which are specifically designated in the … [Continue reading]