Opinion

Texas State Board of Medical Examiners v. Eric Heston Scheffey, M.D.

Court: Texas Court of Appeals, 3rd District (Austin)
Filed: Jul 3, 1997
Status: Published
Cited by: 0 cases
Authority: More cited than 35.8%

The opinion

Scheffey with FNs

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-96-00216-CV

Texas State Board of Medical Examiners, Appellant

Eric Heston Scheffey, M.D., Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT

NO. 95-08507, HONORABLE W. JEANNE MEURER, JUDGE PRESIDING

The State Board of Medical Examiners suspended Eric Heston Scheffey's license to

practice medicine. Scheffey sought judicial review of the Board's order in district court. The district court

reversed the Board's order, holding that the decision to suspend the license was not supported by

substantial evidence. The Board appealed to this Court. We will reverse the trial court's judgment.

BACKGROUND

In a formal complaint, the Board charged Scheffey with three violations of the Medical

Practice Act. See Tex. Rev. Civ. Stat. Ann. art. 4495b (West Supp. 1997) (the "Act"). The complaint

charged Scheffey with: (1) deviations from the minimum acceptable standard of care; (2) flagrant and

persistent overcharging; and (3) flagrant and persistent overtreatment. The Board's complaint stated that

these violations of the Act were grounds for cancellation, revocation, or suspension of Scheffey's license

to practice medicine pursuant to section 4.01 of the Act. See Act § 4.01.

An administrative law judge ("ALJ") conducted an administrative hearing and submitted

a proposal for decision and a proposed order to the Board recommending revocation of Scheffey's medical

license. The full Board then considered Scheffey's case and declined to accept the ALJ's recommendation

to revoke Scheffey's license. Instead, the Board adopted the ALJ's findings of fact and suspended

Scheffey's license but stayed the suspension and placed him on probation for five years subject to certain

conditions.

The district court reversed the Board's decision, concluding that there was not substantial

evidence to support the Board's action. The Board appealed to this Court in a single point of error, arguing

that its order was supported by substantial evidence.

EVIDENCE PRESENTED AT THE HEARING

Multiple witnesses testified at the Board's hearing, focusing on four of Scheffey's medical

patients. Because the issue before this Court concerns whether substantial evidence supports the Board's

decision to suspend his license, we will briefly discuss the evidence surrounding each case.

Patient D.G.

Following a wrist injury, D.G. was treated by Scheffey and other doctors and he was

administered various diagnostic tests. (1) Several doctors, including Dr. Scheffey, concluded that D.G. had

mild carpal tunnel syndrome ("CTS"). The experts disagreed, however, as to whether the test results

indicated a carpal tunnel release was required. Scheffey performed this surgical procedure on D.G.

At the hearing before the Board, Dr. Flatt testified that the only tests supporting a diagnosis

of CTS were the Tinel's test and Phalen's test and that they were not sufficient evidence on which to make

an affirmative diagnosis. He believed the nerve conduction study showed normal results; however, he

conceded that each doctor could interpret the results differently. Dr. Flatt testified that the nerve

conduction study showed, at most, only mild CTS and revealed improvement from the use of a wrist splint.

He supported his assertion with the negative Electromyographic Examination ("EMG") performed in

December 1988. Additionally, Scheffey's records do not indicate that he administered any other tests on

D.G., and he did not review the EMGs, one of which specifically stated that it would not support a

diagnosis of CTS. Dr. Flatt stated that Scheffey's diagnosis of CTS was not medically indicated based on

Scheffey's records, D.G.'s complaints, the physical findings, and the EMG and nerve conduction studies.

He, therefore, concluded that the carpal tunnel surgery was not medically indicated and was not based on

a solid diagnosis.

Scheffey's records reflect that D.G.'s surgery lasted twenty minutes, but Drs. Cameron,

Crouch and Flatt testified that in that period of time, Scheffey could not possibly perform all the procedures

he listed in the operative report. All three doctors agreed that a carpal tunnel release could take about

twenty minutes to perform; however, the additional procedures allegedly performed should have added at

least one hour. The doctors also took issue with various elements of the surgery, including necessary

instruments which were not mentioned in the surgical report, unnecessary procedures, and findings that

were not supported by the medical history and records.

Finally, Dr. Cameron and Dr. Crouch testified about Scheffey's charges. Both testified that

Scheffey inappropriately charged D.G. for an initial consultation after she had been his patient for several

months and that Scheffey's fees were excessive. Dr. Crouch testified that Scheffey engaged in

"unbundling" (2) in his billing for D.G.'s carpal tunnel release. Scheffey and his office manager, Susan Towne,

testified that there were no guidelines for global fees, and Towne additionally testified that the itemization

of surgical procedures and charges was an acceptable practice for the filing of insurance claims. Dr.

Cameron agreed that this practice is common, but maintained that Scheffey had excessively billed and that

the overcharging amounted to dishonorable conduct.

Patient G.M.

G.M. was treated by Scheffey for neck and back pain which radiated into his legs.

Scheffey prescribed physical therapy and performed several diagnostic tests. (3) Scheffey's impression after

the first set of diagnostic tests was that G.M. had a herniated lumbar disc and a cervical sprain with a

bulging disc. Scheffey admitted G.M. to the hospital for additional tests (4) and then performed back surgery

on G.M.

G.M.'s condition improved after the surgery, but he subsequently experienced pain again.

G.M. continued to seek treatment from Scheffey and underwent additional testing. Scheffey performed

a second surgery on G.M.,after which G.M. continued to complain of pain and soreness across his back.

At office visits after the second surgery, Scheffey continued to order diagnostic tests and routinely took X-rays of G.M.'s lumbar spine.

The Board determined that Scheffey overtreated G.M. by performing surgery when it was

not medically indicated. Dr. Sanders testified that a case could be made for performing the first surgery

on G.M. However, he questioned Scheffey's decision to operate when G.M. had unexplained pain. Dr.

Sanders opined that Scheffey should have obtained psychological studies before the first surgery. He

testified that the second surgery was medically indicated but that the fusion performed in the second surgery

should have been performed in the first surgery. Dr. Sanders also criticized Scheffey's choice of diagnostic

testing after the first surgery and believed that an MRI would have been the most helpful test. Dr. Cameron

supported Scheffey's assertion that an MRI was not possible on G.M. Additionally, at least one MRI was

performed on G.M. when it became possible.

Dr. Cameron and Dr. Sanders testified regarding Scheffey's overcharging for the services

provided to G.M. They testified that Scheffey billed for a comprehensive history and physical that was

unnecessary and for intermediate follow-up office visits that should have been simple check-up reviews.

Additionally, Dr. Mulloy, who testified on Scheffey's behalf, agreed that Scheffey should not have charged

for reading three reports interpreting lumbar myelograms. Both Dr. Cameron and Dr. Sanders testified that

various procedures during both surgeries were either superfluous or unnecessary charges or were simply

unjustified. Additionally, both stated that aspects of G.M.'s follow-up care should have been included in

the global fees for the surgeries. Overall, the doctors set forth multiple examples of unnecessary charges,

unjustifiable charges, and excessive diagnostic testing. (5)

Patient S.R.

S.R. was treated by Scheffey for back and leg pain. After multiple diagnostic tests were

performed, (6) Scheffey performed back surgery on S.R. Drs. Hall, Sanders, and Cameron reviewed S.R.'s

case; all three agreed that there were inadequate indications for surgery. They pointed to multiple

diagnostic tests that produced normal or negative results and stated that other test results did not provide

a definitive diagnosis and were "weak" bases upon which to perform surgery. Dr. Sanders and Dr. Hall

also asserted that the highly sensitive post-myelogram CT would have revealed a need for surgery. Dr.

Sanders stated that with the normal studies, S.R. did not exhibit enough medical indications to benefit from

surgery and pointed out that Scheffey never made a definitive diagnosis until the day of the surgery. Dr.

Hall and Dr. Sanders also testified that aspects of Scheffey's operative report were inconsistent with the

diagnostic studies.

Regarding Scheffey's charges, Dr. Cameron testified that Scheffey's initial comprehensive

consultations were unjustified because an initial comprehensive examination was performed at S.R.'s first

visit. He criticized Scheffey for twice billing S.R. for interpreting a lumbar discography when a radiologist

performed the interpretation. Dr. Cameron testified that Scheffey miscoded and overcharged for the

procedures during S.R.'s surgery, and while Ms. Towne, Scheffey's office manager, opined that the use

of the particular code was a mistake, she did not have personal knowledge of any mistake, and no member

of Scheffey's staff ever corrected the mistake. Finally, Dr. Cameron stated that Scheffey's charge for

S.R.'s surgery was excessive and not the usual and customary charge.

Patient D.M.

D.M., a forty-two-year-old woman, sought treatment from Scheffey for a back and hip

injury. Scheffey ordered multiple diagnostic tests before he performed surgery. (7) Scheffey's preoperative

diagnosis was that D.M. suffered from a herniated nucleus pulposus and a bulging disc and that

conservative treatment had failed. Scheffey performed back surgery at two levels.

At the hearing, Dr. Hall and Dr. Cameron testified that Scheffey did not have sufficient

objective evidence to perform surgery on D.M. Both believed that the post-myelogram CT scan revealing

a slight bulge was a flimsy basis for surgery. Dr. Cameron also noted that most forty-to fifty-year-old

persons will have some slight bulging with no symptoms. The doctors discredited the abnormal finding after

the second discogram; Dr. Cameron agreed with Dr. Hall that the test was normal and stated that the only

thing abnormal about the test was D.M.'s pain. Dr. Cameron additionally stated that nothing in the imaging

tests demonstrated nerve root damage, and although there were some clinical indications of damage, they

were not confirmed. He also expressed that the EMG's suggestion of radiculopathy was "very weak."

Dr. Cameron testified about Scheffey's charges for D.M.'s treatment. He testified that

Scheffey's charges for interpreting the lumbar myelogram and for three initial comprehensive consultations

were unjustified because the radiologist interpreted the myelogram and because a comprehensive

consultation was performed when Scheffey first examined D.M. Dr. Cameron also found fault with

Scheffey's coding and billing for procedures which were more complicated and expensive than the

procedures actually performed. Ms. Towne testified that she believed the coding was a mistake; however,

no attempt was made to correct the errors. Dr. Cameron testified that Scheffey's charges for the surgery

were in excess of the usual and customary charges in the area and that Scheffey billed separately and

additionally for procedures and follow-up visits that should have been included in the overall charge for the

surgery.

Dr. Hall concluded that Scheffey performed surgery on D.M. without symptoms and

physical findings to support the action. Dr. Cameron concluded that Scheffey over treated D.M. by

performing unwarranted surgery, repeated his practice of unjustified charges, and improperly coded for

procedures which yielded a higher rate of reimbursement.

DISCUSSION

In reviewing the administrative decision of the Board, we use the substantial evidence scope

of review defined under the Administrative Procedure Act. See Tex. Gov't Code Ann. § 2001.174 (2)(E)

(West 1997) (the "APA"). We must first consider whether the evidence as a whole is such that reasonable

minds could have reached the same conclusion as the agency. See Texas State Bd. of Dental Examiners

v. Sizemore , 759 S.W.2d 114, 116 (Tex. 1988), cert. denied , 490 U.S. 1080 (1989); Wilmer-Hutchins

Indep. Sch. Dist. v. Brown , 912 S.W.2d 848 , 852 (Tex. App.--Austin 1995, writ denied). We may not

substitute our judgment for that of the agency as to the weight of the evidence. Public Util. Comm'n v.

Gulf States Util. Co. , 809 S.W.2d 201, 211 (Tex. 1991); see also APA § 2001.174. Decisions of an

administrative agency are presumed to be supported by substantial evidence, and the burden is on the

contestant to prove otherwise. Texas Health Facilities Comm'n v. Charter Medical , 665 S.W.2d 446,

453 (Tex. 1984). If substantial evidence supports the Board's findings, we must resolve all conflicts in

favor of the Board's decision, see Wilmer-Hutchins , 912 S.W.2d at 852, and uphold the Board's action

if the evidence is such that reasonable minds could have reached the conclusion the Board must have

reached in order to justify the suspension. See Charter Medical , 665 S.W.2d at 453 .

Based upon its findings of fact, the Board concluded as follows:

* * *

(5) Based on Findings of Fact Nos. 15-335, Respondent has violated § 3.08(4)(G) of the

Act in that he persistently and flagrantly overcharged or overtreated patients.

(6) Based on Findings of Fact Nos. 15-335 and Conclusion of Law No. 5, Respondent

has engaged in dishonorable or unprofessional conduct that is likely to deceive or

defraud the public or injure the public, a violation of § 3.08(4) of the Act.

(7) Based on Findings of Fact Nos. 15-335, Respondent has failed to practice medicine

in an acceptable manner consistent with the public health and welfare, a violation of §

3.08(18) of the Act.

(8) Pursuant to § 4.01 of the Act, the Board has the authority to cancel, revoke, or

suspend the license of any practitioner of medicine or impose any other authorized

means of discipline upon proof of the violation of the Act in any respect.

(9) Based on the Findings of Fact and Conclusions of Law Nos. 5-8, any one of the

violations is grounds for revocation or disciplinary action by the Board.

As the Board noted, any one of these violations would provide grounds for suspending Scheffey's license.

See Act § 4.01(a); Guerrero-Ramirez v. Texas Bd. of Medical Examiners , 867 S.W.2d 911, 918 (Tex.

App.--Austin 1993, no writ). This Court need only find substantial evidence supporting one ground for

suspension in order to uphold the Board's order even if all three bases given by the Board are

independently sufficient to support the suspension. See Act § 4.01(a); Guerrero-Ramirez , 867 S.W.2d

at 918 .

The first two bases for suspension of Scheffey's license related to his charging practices.

In conclusion of law five, the Board determined that Scheffey violated the Act by flagrantly and persistently

overcharging or overtreating his patients. In conclusion of law six, the Board determined that he had

engaged in dishonorable or unprofessional conduct that was likely to deceive or defraud the public or injure

the public, basing this violation upon the overcharging. See Act § 3.08(4). Even assuming that Scheffey

overcharged his patients, to uphold the Board's decision, we must also determine that his overcharging was

either flagrant or persistent.

The statute does not define what constitutes "persistently or flagrantly overcharging." Id.

at 338; see also Act § 3.08(4)(G). This Court addressed the issue of persistent and flagrant overcharging

in Texas Bd. of Medical Examiners v. Birenbaum , 891 S.W.2d 333 (Tex. App.--Austin 1995, writ

denied), and defined "flagrant" as "extremely, flauntingly, or purposefully conspicuous; glaringly evident;

notorious." We defined "persistent" as "continuing in a course of action without regard to opposition or

previous failure; tenacious of position or purpose; existing for a long or longer than usual time or

continuously." Birenbaum , 891 S.W.2d at 338 . We must, therefore, ascertain whether Scheffey's

charges were either (1) so excessive as to amount to extremely conspicuous or glaringly evident

overcharging or (2) occurred so repetitively as to be tenacious or continuous. Id .

Even assuming the record contains substantial evidence that Scheffey flagrantly

overcharged, we must also determine whether Scheffey "persistently overcharged." Such a determination

requires a thorough examination of Scheffey's charges across the whole spectrum of his patients. Id . at

340. In Birenbaum , we determined that focusing on only seven complicated cases, while Birenbaum's

practice included more than three hundred seventy-five patients, did not demonstrate "persistent"

overcharging. Id . In this case, Scheffey's practice included 4500 patients; however, the Board focused

on only four cases. Under the general definition of the term "persistent," this record does not contain

substantial evidence to support the Board's finding that Scheffey persistently overcharged. Examining the

evidence in the record, we agree with the district court that the record does not contain substantial evidence

to support the Board's finding of persistent overcharging. Having determined that there is not substantial

evidence to support a determination of persistent overcharging, it may not be said that the Board's findings

of fact support conclusion of law five. (8)

In conclusion of law six, the Board determined that Scheffey engaged in dishonorable or

unprofessional conduct that was likely to deceive or defraud the public or injure the public. See Act §

3.08(4). Flagrant or persistent overcharging under section 3.08(4)(G) is one method by which section

3.08(4) may be violated, and the Board expressly based conclusion of law six upon conclusion of law five.

See id . § 3.08(4), .08(4)(G). Our determination that there is not substantial evidence to support conclusion

of law five, therefore, necessitates the same result regarding conclusion of law six.

Scheffey insists that the Board's order must fail because conclusions of law five and six are

not supported by substantial evidence. However, we need only find substantial evidence supporting one

ground for suspension in order to uphold the Board's order, especially in light of conclusion of law nine in

which the Board expressly concluded that "any one of the violations is grounds for revocation or

disciplinary action by the Board." See Act § 4.01(a); Guerrero-Ramirez , 867 S.W.2d at 918 .

The Board's order stated a third basis for suspending Scheffey's license, focusing on

Scheffey's treatment of patients rather than his charging of fees. In conclusion of law seven, the Board

determined that Scheffey violated section 3.08(18) of the Act by failing to practice medicine in an

acceptable manner consistent with the public health and welfare. See Act § 3.08(18). The Board heard

testimony from Drs. Flatt, Hall, Cameron, and Sanders regarding Scheffey's operations on the four patients

when surgery was not medically indicated. In each case, the experts noted that multiple diagnostic tests

were performed but they gave only minimal, if any, indications for the procedures performed. Additionally,

the doctors discredited the findings of several of the tests due to the possibility of varying interpretations.

While Scheffey presented experts who testified that the surgeries were medically indicated,

if substantial evidence supports the Board's findings, we must uphold the Board's decision and resolve any

conflicts in favor of the agency decision. See Auto Convoy v. Railroad Comm'n , 507 S.W.2d 718, 722

(Tex. 1974); Wilmer-Hutchins , 912 S.W.2d at 852. The question of what meaning, weight, and credibility

to assign the conflicting evidence was a matter for the Board to determine; we are forbidden to make those

assessments and are limited to the issue of whether the agency record as a whole demonstrates that the

Board's assessments were reasonable. See APA § 2001.174(2); Auto Convoy , 507 S.W.2d at 722 .

After hearing and weighing the testimony regarding the necessity of the surgeries performed

by Scheffey, the Board determined that Scheffey failed to practice medicine in an acceptable manner

consistent with the public health and welfare. We conclude that reasonable minds could have reached the

conclusion that Scheffey overtreated his patients by performing surgery when surgery was not medically

indicated and that there is sufficient evidence to support the Board's determination that Scheffey failed to

practice medicine in an acceptable manner consistent with the public health and welfare. See Sizemore ,

759 S.W.2d at 116 ; Wilmer-Hutchins , 912 S.W.2d at 852. Accordingly, we conclude that there was

substantial evidence to support the Board's conclusion that Scheffey violated section 3.08(18) of the Act.

CONCLUSION

Because we need only find substantial evidence supporting one ground for suspension in

order to uphold the Board's order, we hold the record contains substantial evidence to support the Board's

conclusion that Scheffey violated section 3.08(18) of the Act by failing to practice medicine in an

acceptable manner consistent with the public health and welfare by performing surgery when it was not

medically indicated. Based upon this violation, the Board could suspend Scheffey's license. Thus, we

sustain the Board's point of error, reverse the judgment of the district court, and render judgment reinstating

the decision of the Board.

Marilyn Aboussie, Justice

Before Justices Powers, Aboussie and Jones

Reversed and Rendered

Filed: July 3, 1997

Publish

1. The diagnostic tests performed and the results obtained were:

Nerve conduction study showing mild CTS

Tinel's test showing possible CTS

Phalen's test showing positive CTS

Nerve conduction velocity study did not support CTS diagnosis

Electromyographic Examination ("EMG") did not show CTS, but showed possible

radiculopathy.

2. "Unbundling" occurs when a doctor charges for individual elements of a procedure that should be

included in the charge for the overall procedure.

3. G.M. initially underwent the following tests:

Three-dimensional CT of the lumbar spine showing minimal narrowing at the L5-S1 interspace

and moderate narrowing at the L5-S1 neural foramina bilaterally

MRI of the cervical spine showing degenerative changes

MRI of the lumbar spine showing mild degenerative changes with a mild generalized bulging

annulus at L4-L5 and a transitional L5 vertebra

CT of the lumbar spine showing a probable disc herniation at L4-L5 and prominent central

bulging calcification at L5-S1

4. The following tests were performed in the hospital:

Myelogram with normal results except for the transitional L5 vertebra and mild degenerative

changes

Post-myelogram CT scan suggested a midline posterior L4-L5 disc herniation. The herniation

was not, however, substantiated on the myelogram.

Electrical nerve studies suggesting lumbar fifth radiculopathy on the right side

5. Thirty-two sets of X-rays were described by Dr. Cameron and Dr. Sanders as excessive.

6. The following tests were performed and results obtained:

1/4 X-rays - Normal

1/17 CT Scan - Normal with no herniated nucleus pulposus

1/30 CT Scan - Negative

2/27 EMG - Suggested sacral first radiculopathy on right side; no abnormality.

3/16 Myelogram - Insensitive, but otherwise normal

3/16 Post-myelogram CT of the lumbar spine - Normal

3/17 MRI - Normal

6/19 Discogram - Pain radiating into the right leg after dye was injected at L5-S1; minor pain

in lumbar area when injected at L4-L5. Report noted moderate amount of subarachnoid

contrast and unremarkable disc spaces.

6/20 MRI - Unremarkable with no evidence of herniation, extrusion, nerve root compression, or displacement.

7/15 Preoperative diagnosis: "Probable herniated lumbar disk at L4-L5, possible L5-S1 involvement, failed conservative treatment, and facet arthropathy."

7/16 X-rays with AP and lateral views - Normal

5/2/91 Post-surgical CT Scan - mild generalized bulging of L4-L5 disk.

7. The diagnostic tests produced the following results:

MRI of lumbar spine--normal; no significant bulges or protrusions

EMG--suggested Sacral First Radiculopathy on the right side

Physical exam by Scheffey--tenderness across lumbosacral spine & into buttocks

Myelogram--normal

Post-myelogram CT Scan--slight bulging of L5-S1 disc

Discogram at L5-S1--negative

MRI of lumbar spine--negative; no evidence of disc herniation identified

Discogram--2cc's of contrast material injected at L4-5, none at L5-S1; disc space at L4-5

was unremarkable; pain radiating into legs with injection at L4-5; impression: abnormal study

as noted above.

8. The Board determined that Scheffey violated section 3.08(4)(G) of the Act by flagrantly and

persistently overcharging. See Act § 3.08(4)(G). Section 3.08(4)(G) of the Act states that it is a violation

to flagrantly or persistently overcharge. Id. Even assuming there is substantial evidence to support a

conclusion that Scheffey violated section 3.08(4)(G) by flagrantly overcharging, the Board's order

specifically states in conclusion of law five that Scheffey flagrantly and persistently overcharged. We must

measure the sufficiency of the agency's order "by what it says" and not by judicial speculation about how

the agency reached its final decision. Morgan Drive Away, Inc. v. Railroad Comm'n , 498 S.W.2d 147,

152 (Tex. 1973); Sensitive Care, Inc. v. Texas Dept. Human Servs. , 926 S.W.2d 823, 828-29 (Tex.

App.--Austin 1996, no writ).

ustice