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Court overturns decision that allowed attorneys to contact allegedly defrauded patients through MDCH records, failing to honor phyisican-patient privilege

Dr. Yasser Awaad allegedly defrauded many children and their families through the Oakwood Healthcare System by falsely diagnosing the children with epilepsy or seizured disorder.  On behalf of several of the children, an action was filed against Awaad, Oakwood and several ther providers, alleging conspiracy to defraud.  The Plaintiffs sought to contact other patients, both as potential witnesses and to make them aware of the potential class action.

The patients' attorneys served a subpoena on the Michigan Department of Community Health seeking the names of all patients diagnosed with the disorders by Awaad.  The MDCH responded that it would comply only in response to a court order.  The families' attorneys scheduled a hearing, where disclosure was fought by the Oakwood attorneys.  The families argued that Oakwood had no "standing" to object to disclosure, that it was acting solely to protect itself from additional liability claims, and that a suitable protective order could be fashioned.

At the hearing, the Court rejected Oakwood's argument that the disclosure by MDCH would violate the other families' physician-patient privilege.  It entered a suitable protective order and allowed the mailing of a notice to the MDCH-identified families of the pendency of the suit and seeking their cooperation as witnesses. The Oakwood defendants sought a protective order pending appeal which was denied.  The families pursuing the claim then sent out the subject letter.

The Oakwood defendants then appealed.  They sought reversal of the trial court's order and the imposition of sanctions against the families' attorneys, including expenses and forced withdrawal from the lawsuit.  The Court of Appeals agreed that the lower court's order impermissibly invaded the witness-families' state phyisician-patient privilege of confidentiality, even though it was not a federal HIPAA violation.   It also held that Oakwood's motivation for objecting to the disclosure, and its "lack of standing" were irrelevant:  our Supreme Court has held that the privilege can be enforced and must be honored by all parties and is only the patient's to waive.

Nevertheless, the Court denied sanctions against the families' attorneys, since they acted with appropriate judicial authority and in accordance with due process.  The action was not moot, however, since the Court of Appeals required the attorneys to return all materials to the MDCH and to destroy all electronic records of any patient identities.  It excepted from this order only the contact and file information relating to those witness-families who had responded to the inquiry and voluntarily waived their physician-patient privilege.

Thompson O’Neil, P.C.
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Traverse City, Michigan 49684
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