Patient privacy scandal at UMC goes from rumor to indictment

By Marshall Allen

Thursday, April 29, 2010 | 2 a.m.

The patient privacy scandal at University Medical Center started with what was assumed to be just a rumor last summer.

A local chiropractor told Kathy Silver, the public hospital’s CEO, that attorneys were illegally obtaining private information about patients. Silver conducted a cursory investigation, found nothing and assumed the matter was dead.

In the ensuing months, however, a mole within the hospital was systematically faxing “face sheets” of patient files to a Las Vegas law firm manager, who used the documents to drum up business for attorneys, a federal grand jury indictment alleged Wednesday.

Richard Charette, 54, who manages the firm Accident Trial Lawyers on West Charleston Boulevard, up the street from UMC, was indicted on one count of conspiracy to illegally disclose personal health information in violation of the federal Health Insurance Portability and Accountability Act, better known as HIPAA. It’s the first case of its kind in Nevada.

“The Obama administration has zero tolerance for health care fraud,” said Daniel Bogden, U.S. attorney for Nevada. “One of our nation’s most urgent, destructive and widespread challenges is health care fraud.”

The Sun has been trying to contact Charette and Accident Trial Lawyers attorney Andrew Taylor since November, through phone calls and office visits. Neither returned a call for comment for this story.

If convicted, Charette could be sentenced to up to five years in prison and fined $250,000.

Dr. Steven Holper, a rehabilitation specialist, has told the Sun that Charette approached him in October and told him to give a gift to a well-positioned UMC employee. In return, the employee would refer patients injured in traffic accidents to Holper, who would then send them to Charette’s attorney for legal representation.

Holper had the gift delivered to the UMC employee, but never went any further. He said he never would have listened to Charette if he suspected the proposed deal involved the leak of patient information.

According to the indictment, a trauma center employee leaked private patient information to Charette from January 2009 to Nov. 19 — at least 55 times by fax and sometimes in person. Charette used the information to solicit patients himself, or through people he hired, on behalf of personal injury attorneys. He told some of the people he hired to use fake names when contacting patients, the indictment said.

Charette paid the trauma center employee, who was not identified in the indictment, for each patient who retained one of the attorneys who was affiliated with him, about $8,000 total, the indictment said.

Brian Brannman, UMC’s chief operating officer, said he does not know the identity of the trauma center employee who allegedly funneled the patient data to Charette, and cannot say whether the person still works at the hospital.

The indictment does not name Taylor. But a review of Clark County civil court records shows Taylor handled just three auto negligence cases between 2001 and December 2008, and 45 such cases in 2009.

Bogden said the probe is ongoing, but he would not elaborate.

During the time frame mentioned in the indictment, UMC officials did not think they had a patient privacy problem. But whispers of the leak continued to spread through the medical community, including to UMC administrators and Clark County commissioners, who run the hospital.

A source eventually reported the leak to the Sun, and then verified the leak by providing to the Sun 21 face sheets of traffic accident patients who had been admitted Oct. 31 and Nov. 1 to UMC. Each document contained the patient’s Social Security number, birth date, insurance information and injury details. The source claimed to be several degrees removed from the leak and to not know the source.

The Sun’s story appeared Nov. 20, stopping the leak and sparking an FBI investigation that led to Charette’s indictment.

Charette is scheduled to appear in court May 14.