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Schulze's concerns had earlier come to the attention of Ken Davis, an investigator for the State Department of Insurance, who opened an investigation in February. Olmo got word of the probe in May, when hospital administrators told him that the state had been making inquiries. His attorney, Douglas Perry Jr., then called the Insurance Department to find out what the investigation was about. "They said, 'State law says we don't have to tell you,' " Perry said.
Finally, Perry arranged a July meeting with Davis, and brought in a trial lawyer named Anthony Icenogle of Austin to assist. Icenogle says that Davis began the interview by reading a lengthy prepared statement and "when we asked for a copy of it, they refused." Icenogle says he and his clients were not allowed to take notes or have a transcription of their interview, although the state had a court reporter in the room.
Icenogle did not come away from the interview feeling that his client was under primary suspicion. When the state asked for all of Olmo's billing records, Olmo complied. He says he spent two weeks and burned up three copying machines producing seven boxes of records that he sent to Austin.
The day before Morales held his press conference, Perry says, he got a call from a reporter saying his client was about to be sued. Perry called Pat Tulinski, who told him that the reporter was "confused." The next day, Morales made his announcement, and by the time Perry learned about it, he had an hour to prepare for court. State District Judge Katie Kennedy slapped a temporary restraining order on Olmo's firm, allowing it to continue working but prohibiting it from doing any billing. The next day, Olmo was linked to the deaths of ten people in the news media and his face was on national television.
A few days later, investigators from the State Department of Health investigated the ten deaths at West Houston Medical Center and cleared the hospital and the surgical assistants of any wrongdoing.
Steve Thomas, a general surgeon for the past five years at West Houston, denounced the linkage of the assistants with the deaths.
"I have never seen or heard of an instance where they affected the outcome of the surgery," he said. "As far as poor outcomes, it's usually based on the patient's disease. It was ridiculous about these ten deaths. None of them died in the operating room, and anybody that dies within 30 days of surgery is counted as a postoperative death, regardless of the cause of death. I had a patient who was extremely ill and there was a last-ditch effort. There was a surgical assistant there, but he had nothing to do with that death. We had a man with hip surgery who died of a stroke two weeks later. I'm sure there was an assistant there, too."
Peter Curtis, a vascular surgeon at West Houston, was offended by what Morales said about his hospital, which recently scored 99 points out of 100 in its national accreditation. "We are the cream of the crop, and this man tore a lot of that down," he said.
With managed care and shrinking revenue, Curtis explained, "surgical assistants are an essential part of our system. The problem we face in Texas is there are no regulations as to the status of these folks." Curtis added that Olmo and his staff have regularly shown up for Medicare surgeries, sometimes in the middle of the night, for which they were not reimbursed at all.
"As far as I can tell," Curtis said, "the controversy all has to do with the billing, the 'dash 80' that is attached to the procedure. I don't see any reason why they shouldn't be able to use that code."
Republican state Representative Kyle Janek, an anesthesiologist at Memorial Hospital Southwest, which also had a contract with Olmo's firm, now plans to introduce legislation in January that will recognize the work of surgical assistants.
Janek said he thinks that insurance companies don't want to pay for surgical assistants, "but if they don't, getting surgeries done will be more difficult."
Pat Tulinski, who has been with the attorney general for a year and a half, makes no apologies for her tactics or her rhetoric.
"I feel like we're prosecuting Al Capone for tax evasion," she said. "This is basically an insurance fraud case, and these are the only means we have to stop it. The consumer protection department does not regulate what goes on in an operating room."
Under the terms of the agreement Tulinski negotiated with the defendants' lawyers, Olmo and his associates will not use the terms doctor or M.D. to refer to themselves unless they specify where they got their degrees and that they are not licensed by the state. They will not bill insurance companies using the 80 and 81 codes unless they have an up-front agreement with them. They will be able to use the designation "certified surgical assistant," as long as they make it clear they are not licensed by the state.
Tulinski also refuses to back down on the state's suspicion that the surgical assistants may be implicated in deaths, despite the clearance of the State Health Department.