Arbitration Award vs Rogue Orthopedist Totals $140 Million

Ken Terry

February 26, 2019

A New York arbitrator has awarded $140 million to resolve 255 medical malpractice lawsuits against former orthopedic surgeon Spyros Panos, who lost his medical license, served more than 4 years in prison for fraud, and is now facing new criminal charges.

The arbitration agreement also covers the "vicarious liability" of Mid Hudson Medical Group, Panos's former practice in Poughkeepsie, New York, Nancy McGee, an attorney who represents 149 of the plaintiffs, told Medscape Medical News.

The suits against Panos alleged that he routinely performed 15 to 20 surgeries a day and saw up to 60 or sometimes even 90 patients a day in his office over a 10-year period. Some of the procedures were unnecessary, and some were faked or botched, according to the lawsuits. Some patients did not receive the care they needed, the suits charged.

Judge Paul Marx of the New York State Supreme Court removed these malpractice cases from the court system and appointed a plaintiffs committee to manage the litigation. Part of that process involved the appointment of an arbitrator, Judge Peter Skelos of National Arbitration and Mediation.

The individual awards to plaintiffs, which Judge Marx is expected to approve soon, range from $18,540 to $3.4 million. However, McGee said, the plaintiffs will probably receive only a fraction of those amounts because Panos's insurance won't cover it all. The combined insurance of Panos and Mid Hudson Medical Group totals about $46 million, she noted.

Spyros Panos

Among the individual awards is $1.4 million to the heirs of Constance Nenni for wrongful death. Nenni died in 2010 from a pulmonary embolism shortly after Panos performed what Nenni believed would be a procedure to remove calcium from her arthritic right knee.

Panos worked at Mid Hudson Medical Group in Poughkeepsie for 12 years and left the practice in 2011. Most of the suits named Mid Hudson, alleging that the practice should have questioned Panos's high volume of procedures and office visits. In a settlement with the US Attorney's Office in the Southern District of New York in a 2013 fraud case, Mid Hudson forfeited $5 million but did not admit to any wrongdoing.

Under the recent arbitration agreement, McGee said, the insurance carriers of Panos and Mid Hudson neither admitted nor challenged their insured parties' liability in the cases brought against them.

But Panos refused to consent to the settlement by his primary insurance carrier, Medical Liability Mutual Insurance Company (MLMIC). The insurer then invoked a provision of the consent clause in his contract and overrode his objection with the support of the state medical society's reviewer, according to McGee.

Did the Medical Group Have Any Responsibility?

As for Mid Hudson's liability, McGee said, "There was some evidence that the group was aware of what Panos was doing as early as 2007. And there's been some indication that perhaps they were taking steps to correct his activities. Those steps were clearly not working, and we believe they should have done more, which is why we sued them. And had they done more, it would likely have reduced the number of people who were adversely impacted by his actions. Bottom line, it was about the money."

Panos's attorney, Jeff Feldman, and Mid Hudson's attorney, Chris Keenan, were unavailable for comment at press time.

The Scheme Unravels

The arbitration award against Panos is the culmination of 6 years of federal and state litigation over the surgeon's alleged fraud and malpractice. In 2013, Panos pled guilty in New York Federal Court to a fraud scheme. He admitted that he had billed Medicare, the New York State Insurance Fund, and private insurance companies for up to 20 procedures per day and that some of them had been faked. In March 2014, he was sentenced to 4.5 years in federal prison, and he served 2.5 years, according to the New York Law Journal.

A year and a half after his release from jail, Panos was arrested and charged with wire fraud, healthcare fraud, and aggravated identify theft. If convicted of all these charges, he faces up to 32 years and a fine of up to $500,000.

Panos allegedly stole the identity of another orthopedic surgeon without the latter's knowledge. Under this assumed identity, he reviewed worker's compensation files for insurance companies. These firms paid him a total of $860,000, according to documents filed in federal court.

Before forfeiting his medical license in 2014, Panos formed a company to accept these payments, registering it in a relative's name. He allegedly performed some of the illicit workers' comp reviews before he went to prison and the rest after he got out. According to Bloomberg News, more than 2500 people nationwide were affected.

Commenting on the arbitration agreement, McGee said, "The fact that Judge Skelos issued such significant awards illustrates the severity of what Dr Panos did and the serious injuries that he caused to many of his patients. This agreement is only going to provide limited comfort to these people, because their injuries were so severe. The awards were high, but they're only going to see a small portion of these awards, and it's really sad for them."

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