Las Vegas Hepatitis Lawsuit Results in $500M Punitive Damages

A Nevada jury hit two health insurance companies with half a billion dollars in punitive damages following trial in a lawsuit brought by two women who contracted hepatitis C due to unsafe injection practices used at a Las Vegas area endoscopy clinic. 

On Tuesday, a Clark County District Court jury in Las Vegas ruled that Health Plan of Nevada should pay $270 million in punitive damages, and Sierra Health Services should pay $230 million for negligence that led to the two women’s illnesses and a hepatitis C outbreak at Las Vegas endoscopy clinics. The punitive damages are on top of $24 million in compensatory damages the jury awarded last week.

Both companies are members of UnitedHealth Group. Health Plan of Nevada is the state’s largest health insurer. The plaintiffs say that the companies failed to properly monitor centers that they insured. They argued that the companies knew or should have known what was going in clinics offering medical services that were part of their insurance network.

State health officials shut down the Edoscopy Center of Southern Nevada and Desert Shadow Endoscopy Center in 2008 due to unsafe medical practices, after it was discovered that staff were re-using vials of propofol on multiple patients, exposing thousands of patients treated at the clinics to a risk of hepatits C, AIDS and other blood-bourne disease.

Endoscopy Infection Cases Lead to Large Plaintiff Payoffs

A number of lawsuits have been filed following the outbreak, naming a number of different companies that may be responsible for the actions of the facility, which had limited insurance coverage and no assets to cover the damages caused.

Many of the cases have focused on Teva Pharmaceuticals, and 80 of those were settled out of court for about $250 million total. However, in lawsuits that actually reach a jury, plaintiffs are being given huge damage awards. In May 2010, a case against Teva resulted in a $522 million award for one plaintiff.

Legal experts have called the most recent verdict groundbreaking, as it is rare for an insurer to be held responsible in this manner. However, Health Plan of Nevada officials say they plan to appeal and claim that the award is excessive and that there was not enough evidence for the jury to even find the insurance company liable.

The problems stem from the re-use of vials of Propofol, which is a short-acting anesthesia medication that is used for sedation during medical procedures, such as colonoscopy and endoscopy, as well as in dental surgery. It is marketed with the brand name Diprivan by AstraZeneca, and it is currently available as a generic. The lawsuits against Teva stem from the packaging of the drug in large vials, even though it is intended for single patient use.

More than 40,000 former patients were advised by the Southern Nevada Health District to get tested for potentially fatal blood-borne diseases like Hepatitis C or HIV after it was discovered that the Las Vegas clinic was reusing the same vials on multiple patients. This may result in cross contamination a of blood-borne infections.

Hepatitis C is an infectious disease that can cause liver damage, including liver failure, cirrhosis and liver cancer. It is technically incurable, but very effective treatment has been able to eradicate the disease in some of those who contract it.

Attempts to certify a class-action lawsuit for all former patients who had to be tested, on the basis of emotional distress, failed in 2008.