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Payouts to claimants in the $3.75 billion fen-phen diet drug class action settlement could come to a screeching halt very soon if the lead lawyers on all three sides of the case persuade a federal judge that the fund is being rapidly depleted by a “deluge” of exaggerated claims. In court papers filed this week, the lawyers are asking U.S. District Judge Harvey Bartle III, of the Eastern District of Pennsylvania, to order an “emergency suspension” of all claims processing, and to reconfigure the entire process so that all future claims of actual heart valve damage will be audited. The problem, the lawyers say, stems from the “systematic abuse” of the settlement claims process by a group of plaintiffs’ lawyers and the doctors they use as experts. In a separate motion, the lead lawyers are asking Bartle to permanently bar two New York law firms and two doctors from submitting any claims, saying the evidence shows that they were effectively running a “production line” that resulted in hundreds of “medically unreasonable” claims. Bartle has already temporarily frozen all payments to any client of the two firms — Napoli, Kaiser, Bern & Associates and Hariton & D’Angelo — or to any claimant whose echocardiogram was read by either of two doctors — Linda Crouse and Richard Mueller — pending the outcome of a 10-day hearing. Now the lead lawyers on all three sides — the lawyers representing the settlement trust, the class action lead plaintiffs’ lawyers and the defense lawyers for American Home Products — are asking Bartle to go much further, saying the entire process must be redesigned to thwart widespread abuse. In the emergency motion, lead class plaintiffs’ attorneys Arnold Levin and Michael Fishbein of Levin, Fishbein, Sedran & Berman say the fen-phen claims process “changed radically” around February 1992 when the percentage of claimants with lawyers rose sharply. But the much more disturbing statistic, they say, was the sharp increase in the number of claims for large cash awards. Prior to the settlement, statistics showed that about 10 percent to 11 percent of fen-phen users tested positive for heart valve abnormalities. And the epidemiologists said that about half of that group most likely had the valve condition caused by other factors like rheumatoid arthritis, before taking the diet drugs. The settlement was designed to account for those facts by establishing a “matrix” of benefits, with the largest cash awards paid to those with the most severe heart valve problems and no other potential causes in their medical histories. But the lead lawyers now say that some plaintiffs’ lawyers treated the matrix as an invitation to abuse the system. While they expected to see 10 percent to 11 percent of the claimants in the top categories of the matrix, the lead lawyers say that some plaintiffs’ firms had more than half of their clients in the matrix’s top cash-payout boxes. “The high concentration of filings by a small number of law firms, who have advertised extensively and appear to have conducted en masse echocardiographic screening of their clients … presents the danger of systematic abuse,” Levin and Fishbein wrote. To cure the problems, Levin and Fishbein say, Bartle must first issue an immediate stay of all matrix payments, and then redesign the claims process so that all claims are subject to an audit and the reading of all echocardiograms is done only by board-certified cardiologists. In a separate brief, the settlement trust’s lawyers — Andrew A. Chirls and Abbe F. Fletman of Wolf, Block, Schorr and Solis-Cohen — urged Bartle to take action against two New York firms, Hariton and Napoli Kaiser. The trust’s brief says the evidence at the recent hearing proved that the Hariton and Napoli Kaiser firms have “submitted hundreds of medically unreasonable claims.” The trust, they said, has already has paid $7 million based upon improper readings of echocardiograms, and that money “is now unavailable for the payment of legitimate claims.” Hanging in the balance, Chirls and Fletman say, is another $28 million in claims that were interpreted by Dr. Crouse and Dr. Mueller. The trust hired two expert cardiologists who collectively have reviewed all of the claims that Crouse and Mueller handled, they noted, and found that more than 90 percent of their diagnoses lacked a “reasonable medical basis.” Chirls and Fletman argue that the doctors were lured by money. “It is not surprising that the system the law firms created produced medically unreasonable analyses, since the financial incentives it established encouraged slipshod work and preordained results. In just a handful of months, Dr. Linda Crouse earned $725,000 to take and review 725 echocardiograms for clients of Hariton/Napoli,” they wrote. “In addition to the work she has done for Hariton/Napoli, Dr. Crouse has earned some $2.5 million during the past year reviewing 10,000 echocardiograms for a consortium of firms led by Petroff & Associates. She did all this while continuing to see up to 80 patients a week and still participating in some, if not all, of her extracurricular activities.” Mueller’s case is “even more suspect,” they argue, due to the “contingent financial arrangement” he had with the lawyers. The trust’s brief says Mueller got most of his money only if he completed one of the green claims form — a form used only if the claimant is found to have at least moderate heart valve damage. “The financial incentives [were] created by the law firms for the doctors to ‘fudge’ claims,” they wrote. Mueller, they note, found at least moderate damage in 25 percent to 30 percent of the cases he reviewed. Crouse’s statistics were even higher, they note, finding at least moderate damage in more than 60 percent of the claims. As a result, Chirls and Fletman argued, the court should exercise its authority under the settlement to permanently bar both law firms and both doctors from submitting any claims. None of the lawyers representing the Napoli Kaiser and Hariton firms could be reached for comment. The post-trial briefs from both firms are due to be filed next week.

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