Insurer Says Crooked Doctor Lied to Get Policy

CHICAGO (CN) - A federal judge must intervene after a doctor knew he faced a fraud and malpractice investigation when he sought liability coverage, an insurer says.

Galen Insurance filed the complaint Monday to invalidate the policy it just renewed last year for Dr. Vittorio Guerriero.

It says Guerriero applied to Galen for professional liability insurance on Christmas Eve 2013, he omitted various infractions that he should have disclosed.

The first occurred in 2005 when Lincoln Park Hospital revoked Guerriero's surgical privileges after he removed a patient's ovary during surgery to remove an abdominal tumor, according to the complaint.

Seven years later, Guerriero was a subject of an FBI investigation into surgeries performed at Sacred Heart Hospital, particularly tracheostomies.

Galen says an FBI officer attested that Guerriero participated in a scheme to defraud Medicare and Medicaid by performing unnecessary tracheostomy procedures on elderly patients at Sacred Heart.

To maximize the state's payout, he allegedly unnecessarily intubated patients, ordered the administration of high levels of sedation to prevent them from breathing on their own, then ordered a tracheotomy.

Galen says Guerreiro became aware he was a subject of the investigation by August 2013 but failed to disclose such information in his December insurance application. Guerreiro also allegedly falsely answered "no" to a question asking whether any hospital had ever suspended his privileges.

Galen says it issued Guerreiro a policy with a $1 million limit per claim, and $3 million aggregate limit. Its 2014 renewal of that policy allegedly occurred after Galen again misrepresented the potential and actual malpractice claims against him.

The estate of one of Galen's victims, Walter Bruce, sued Guerreiro for wrongful death, medical battery, conspiracy and fraud in December 2014.

Bruce died just hours after Guerriero performed an unnecessary tracheotomy on him, according to the estate's complaint.

The estate "alleges that a Sacred Heart employee reviewed certain tracheotomy patient files in connection the CMS and state of Illinois investigation and found that none contained documentation explaining any efforts to wean the patients from the ventilators or the physician's decision to intubate the patients," Galen claims, abbreviating U.S. Centers for Medicare and Medicaid Services. "Guerriero was the surgeon for each of the reviewed files, and allegedly performed tracheotomies in the absence of an order for a surgical referral from the pulmonologist. Hedricks alleges that the mortality rate for Medicare patients who received tracheotomies from Guerriero far exceeded the morality rate for patients who received tracheotomies in Illinois."

Based on Guerriero's misrepresentations, Galen claims it is entitled to rescind the doctor's professional liability insurance policy.

Galen seeks a court order invalidating the policy, and declaring that it has no duty to indemnify Guerriero in the lawsuit by Bruce's estate.

In addition to Guerriero, Galen names Lee Hedricks, the administrator of Walter Bruce's estate, as a defendant to its action.

The insurer is represented by Michelle Bracke with Lewis, Brisbois, Bisgaard & Smith.

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