An Illinois anesthesiologist who reported suspicions of billing fraud to management isn't immune from a defamation lawsuit by the surgeon he accused, according to a state appeals court.

Kamlesh Shah, MD, provided anesthesia at the Midwest Center for Day Surgery in Downers Grove, Ill. During a case that had been scheduled as a hernia repair, court records say he noticed surgeon Richard Kopolovic, MD, performing abdominoplasty.

Suspecting insurance fraud - namely, that the surgeon was designating patient-paid cosmetic surgeries as insurance-covered therapeutic ones in order to bill payors for them - he took his concerns to the ASC board.

"I felt compelled to bring this to everyone's attention," Dr. Shah recalled later, noting also that an insurer's reimbursement would slow payment to anesthesia providers as compared to a patient's out-of-pocket remittance.

The ASC board's chairman advised Dr. Shah to detail his concerns in a memo, which he did. This memo, however, led Dr. Kopolovic to sue him and the ASC for defamation.

While a trial court threw out Dr. Kopolovic's complaint, ruling that state law protects information used in internal quality control or peer review, an appeals court disagreed that Dr. Shah was engaging in those activities and reversed the ruling, sending the case back for trial.

Even though the board chairman had requested the memo, the appeals court said, Dr. Shah's allegations did not merit protection from libel litigation because he'd failed to properly investigate them first. Additionally, it did find "potentially defamatory" statements in the memo.

Dr. Kopolovic and Ron Ladniak, the manager of Midwest Center for Day Surgery, did not respond to requests for comment. Dr. Shah could not be reached, and lawyers for both sides could not be identified.

Leigh Page