Suit sheds light on clinic's demise Former Baylor plastic surgeon details the allegations that led to his firing By LEIGH HOPPER Copyright 2006 Houston Chronicle Last summer, a prominent Baylor College of Medicine plastic surgeon was fired, locked out of his office and escorted to his car by a security officer as patients and colleagues watched. The humiliated doctor was Saleh Shenaq, chief of plastic surgery and a tenured Baylor professor of 22 years, whose specialty in nerve surgery for children with paralyzed arms made him famous and wealthy. At one time, he was Baylor's highest-paid employee, with compensation of more than $2 million in 2003. Today, he says Baylor and two Baylor faculty members have accused him of Medicare fraud, letting unsupervised trainees perform operations in his place, billing for surgeries he didn't attend, injuring young patients and performing operations they didn't need, according to court documents. The allegations, contained in a lawsuit filed by Shenaq, provide the first public glimpse of conflicts that may have led to the collapse of the brachial plexus clinic at the nation's No. 5-ranked Texas Children's Hospital, the largest program of its kind in the country. The accusations, all cited and denied by Shenaq in his lawsuit, nevertheless rekindle questions about physician conduct and, perhaps, the validity of the costly surgeries. Brachial plexus birth palsy is a disabling and potentially disfiguring injury to nerves in the shoulder and arm that can occur when a baby becomes stuck during delivery and must be dislodged with force. Most cases heal on their own, but severe injuries can be devastating. Treatment is fraught with controversy and the injuries are a significant area of malpractice liability for obstetricians, with verdicts and settlements easily topping $1 million. In August, the Houston Chronicle reported on the quiet shuttering of the highly sought, Baylor-staffed brachial plexus surgery program co-founded by Shenaq. Not only did Texas Children's shut down the program, but it also banned surgeries for babies and children with brachial plexus birth palsy. At the time, officials offered little detail about why. Implications for Baylor Now, a pair of lawsuits describe previously undisclosed details and accusations regarding personnel decisions, potential malfeasance and legal investigations that coincide with the December 2004 closing of the clinic. Shenaq is suing Baylor and Baylor plastic surgeons Dr. Samuel Stal and Dr. Larry Hollier for defamation and wrongful termination. Shenaq also filed a counterclaim against plastic surgeon Dr. Rahul Nath, a competitor, alleging defamation and breach of fiduciary duty. Nath filed a defamation suit against Shenaq in April. Stal and Hollier did not respond to requests for comment. Nath's Dallas lawyer Bruce Flowers said in an e-mail that Nath "denies and regrets the allegations made by Dr. Shenaq." The accusations of Medicare fraud against Shenaq, if true, could have severe implications for Baylor. The federal government vigorously prosecutes individuals engaged in fraudulent Medicare billing, giving prison terms of 20 years or more. Penalties for institutions are stiff as well. The government can cut off Medicare reimbursement — the lifeblood of most health care providers — or impose multimillion-dollar fines. For example, the University of Pennsylvania had to pay the U.S. government $30 million in 1995 for Medicare fraud. In his suit, Shenaq asks the medical school for documentation of "refunds Baylor made to Medicare relating to procedures or services in which Shenaq was involved." Such refunds of federal money may be made when an institution detects an error or improper bill, experts say. However, a spokesman for the Centers for Medicare and Medicaid Services regional office in Dallas said Saturday that a review did not turn up documentation to confirm that Baylor refunded federal money related to Shenaq's practice. Baylor would not confirm Shenaq's version but said in an e-mail that the medical college "stands behind its decision not to continue Dr. Shenaq's employment and will vigorously defend this lawsuit. Baylor will not provide any further comment in light of the pending litigation." Shenaq, who operates at The Methodist Hospital, was out of town and unavailable, his office administrator said. Shenaq's lawyer Kenneth Wall said, "Dr. Shenaq stands by the allegations in his petition and looks forward to telling his side of the story to a jury. Thank heavens for courts and the opportunity to tell the story to a judge and jury." Deaths of physicians Texas Children's maintains it closed the brachial plexus clinic because of the unexpected deaths of two key doctors, a neurologist and neurosurgeon. In August, the hospital told the Chronicle it would rather send patients elsewhere than offer them an incomplete program. About the same time as the clinic closure, Baylor hired the law firm Fulbright & Jaworski to begin an investigation of Shenaq. The queries commenced after Baylor's legal department received two anonymous calls regarding concerns about his medical practice. In notifying Shenaq of the investigation, Baylor's legal counsel sent him a memorandum listing allegations against him. Simultaneously, Shenaq's suit alleges, Baylor plastic surgeons Stal and Hollier — who have since been promoted to posts vacated by Shenaq — began a campaign against him. They contacted graduates of the plastic surgery program and told them, according to the suit, that Shenaq was "hurting children," "engaged in Medicare and Medicaid fraud" and "undertaking unnecessary surgeries." Shenaq's petition also states that he was summoned to the office of Baylor President and CEO Peter Traberin June 2005 and fired. In a letter to Shenaq about his firing, the suit says, Traber wrote that Shenaq had jeopardized the careers of medical residents and the training program by taking trainees to unaffiliated locations. It also stated that Shenaq violated federal regulations, resulting in Baylor having to refund an undisclosed amount of federal money. Shenaq blames his former partner, Nath, for the clinic's demise. The two doctors had a highly successful joint venture at Texas Children's, and they made a combined $4.06 million in 2003, according to Baylor tax records. Nath broke off from Shenaq and left Texas Children's in July 2004 to start a private brachial plexus clinic. Nath, according to Shenaq's suit, had been performing unauthorized surgeries and refusing to treat patients because of their race or their inability to pay for certain procedures. "Baylor decided not to renew his contract as assistant professor after a review conducted by Baylor," Shenaq's suit states. "Dr. Nath's conduct also contributed to Baylor's and Texas Children's Hospital's decision to close (and not reopen) the clinic." Kate Purnell, the mother of a 2-year-old boy with a brachial plexus injury, said she found the accusations against Nath and Shenaq "depressing." Like many parents of such children, the California mother wonders whether something could have been done differently at her son's birth to prevent his injury. Purnell is part of an online support group, the United Brachial Plexus Network, that sometimes debates the merits of different doctors and procedures. "What's depressing is, you just don't know who to believe when there is so much controversy over the cause, especially if it was a doctor who caused the injury originally," said Purnell, who contacted Texas Children's Hospital after her son was born but ultimately chose doctors elsewhere. "Some of the allegations are uninteresting to me. But a couple of them — doing stuff you're not qualified for, unnecessary surgeries — are pretty scary," she said. "It comes down to, how do you know whose motivation to trust?"