News in brief - Oct. 6, 2003

Doctor's verdict victory tossed out - Court decision brings tax relief to Mayo's medical residents - Drug companies still going all out with free meals - Arizona board selects new leaders

Doctor's verdict victory tossed out

A South Carolina judge has thrown out a more than $30 million award a jury gave internist Bruce S. Skinner, MD, after a trial in which he accused his former employer of slandering his reputation and making it difficult for him to work again.

The judge ordered a new trial, saying evidence didn't support the verdict and the jury didn't base its decision on fact. Dr. Skinner has appealed.

Dr. Skinner sued Trident Medical Center in January 2000, and in December 2002 a jury awarded $250,000 for a patient list wrongfully being taken from him; $10 million for the hospital's negligent supervision of an employee who slandered him; and $20 million ($10 million in actual damages and $10 million in punitive damages) for defamation and slander that led to his inability to get a job.

Dr. Skinner had set up an outpatient primary care practice in one of the medical center's clinics in 1998 with the understanding that he would work in a different office after three months. But he was fired less than four months later. He told a jury that the medical center had kept the only copy of a list of more than 1,300 patient names and addresses and prevented him from contacting his patients; that an employee at the center told patients she didn't know where he was; and that a former practice manager told people he had stolen equipment and destroyed the office.

Court decision brings tax relief to Mayo's medical residents

Medical residents no longer need to pay Social Security and Medicare taxes on their incomes, according to a recent court decision.

In late August, the Eighth Circuit District Court of Minnesota decided that the residents and fellows of the Mayo Foundation for Medical Education and Research and the Mayo Foundation, which includes five educational institutions and three clinics, were exempt from paying the Federal Insurance Contributions Act tax.

The Internal Revenue Service was seeking a $4.1 million repayment of a refund Mayo received for 1995. Mayo countered with a suit seeking more than $9 million from the government.

All employees pay 7.65% of their income in FICA tax, which is matched by the employer for a total of 15.3% of the total wage paid.

Attorneys for the Mayo Clinic argued that medical residents were exempt under the student employment provisions of the IRS code.

The IRS argued against the exemption on the basis that teaching hospitals are not integral parts of medical schools and that residents are not students since a majority of their time is spent doing clinical care.

The court viewed the Mayo Foundation as an exception because it is an educational institution and students participate in residency programs to learn the practice of medicine.

If the IRS does not appeal the ruling, many medical schools are expected to apply for FICA refunds.

Drug companies still going all out with free meals

Pharmaceutical companies appear to be flouting PhRMA guidelines on dinners for physicians, if a study in the Sept. 3 Journal of the American Medical Association is any indication of behavior nationwide.

Researchers looked at industry-sponsored meals for the housestaff at the University of Pennsylvania, Philadelphia, during the first six months after the PhRMA codes were established July 1, 2002.

Researchers found little compliance with the spirit of the PhRMA guidelines. Dinners were frequently held at high-priced restaurants, contrary to guidelines stating that such meals should be of moderate value.

Zagat's cost and food ratings for each restaurant were used to calculate the value of the 26 dinner events, which were held at 18 different restaurants in Philadelphia. The average price per meal, according to Zagat's listings, was $42.08, significantly higher than Zagat's average meal price of $29.65. Eight of the events were held at restaurants where meals were in excess of $50 per person. Only five of the events were at restaurants deemed moderate. None were at restaurants considered inexpensive by Zagat.

The JAMA article is online (jama.ama-assn.org/cgi/content/full/290/9/1150-b).

Arizona board selects new leaders

Edward J. Schwager, MD, a family physician in Tucson, Ariz., is the new chair of the Arizona Medical Board. Elected vice chair was Sharon B. Megdal, PhD, while Robert P. Goldfarb, MD, was named secretary.

Dr. Schwager is an associate clinical professor in family and community medicine at the University of Arizona. Dr. Megdal, of Tucson, is associate director of the Water Resources Research Center and professor and specialist of the Dept. of Agricultural and Resource Economics. Dr. Goldfarb has a neurosurgery practice in Tucson and is a neurosurgical consultant to the University of Arizona Athletic Dept.