UnitedHealth Group Inc., the biggest U.S. medical insurer, is set to face claims that it failed to properly oversee a Las Vegas doctor who gave colonoscopy patients hepatitis C by mishandling the anesthetic Propofol.

Jurors in state court in Las Vegas are set to hear opening statements today in the first trial of lawsuits against Minnetonka, Minnesota-based UnitedHealth over the actions of Dipak Desai, a former gastroenterologist accused of infecting patients with hepatitis C in 2008 by reusing Propofol vials during procedures. Desai was hired by a unit of the insurer as a doctor for its health-maintenance organization plans in Nevada, according to court filings.

The insurer is required under Nevada law to “direct, evaluate and monitor the effectiveness of health care services provided” to consumers, lawyers for Helen Meyer, one of the plaintiffs in the case, said in a court filing. UnitedHealth officials didn’t adequately review Desai’s medical practices before hiring him or properly oversee his operations, say Meyer’s attorneys.

The trial comes a month after UnitedHealth officials said fourth-quarter earnings of $1.20-per share met analysts’ expectations and the insurer added 6.4 million members after acquiring Amil Participacoes SA, Brazil’s largest managed-health provider. The company had a market value of $58 billion as of yesterday, according to data compiled by Bloomberg.

Nevada colonoscopy patients shouldn’t seek to hold UnitedHealth liable for Desai’s mishandling of their procedures, according to the insurer. “Making insurers liable for the deliberate malpractice of independent doctors will force those insurers to seek intrusive, burdensome and expensive oversight of how care is delivered,” says Tyler Mason, a UnitedHealth spokesman.

Lawyers for Meyer and Bonnie Brunson, another of Desai’s colonoscopy patients suing UnitedHealth, said during jury selection that they may ask the panel to award $1 billion in punitive damages over the insurer’s failure to properly vet the doctor and monitor his operations, according to court transcripts.

Nevada juries already have handed down multimillion-dollar punitive awards against Teva Pharmaceutical Industries Ltd., which made the Propofol used by Desai. Three juries awarded colonoscopy patients more than $750 million in punitive damages over the drugmaker’s decision to sell the anesthetic in oversized vials that could be reused.

Desai, 62, and two nurse anesthetists are facing second- degree murder charges over the death of a colonoscopy patient. A trial on the state charges is set for April. The former doctor also faces federal fraud charges.

In their lawsuits against UnitedHealth, Meyer and Brunson are suing under a Nevada law that requires HMO officials to file annual reports showing they have reviewed the quality of health services provided to consumers covered by their plans.

Insurers such as UnitedHealth and their units have a “duty to monitor the effectiveness and safety of the clinics, such as Dr. Desai and the Endoscopy Center of Southern Nevada, that they” require their members to use, says Robert Eglet, a lawyer for the women. The insurers should have known as early as 2004 that Desai was using unsafe medical practices, the lawyer adds.

UnitedHealth officials contend that Desai hid his practices from the company, state agencies and accreditation boards and he was admitted to practice in more than a dozen hospitals in the Las Vegas area.

“Our deepest sympathies go to the victims and their families in this terrible situation that we wish had been caught sooner,” Mason says.

The case is Helen Meyer v. Health Plan of Nevada Inc., A5837999 (Consolidated), Clark County District Court (Las Vegas).

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware atjfeeley@bloomberg.net; Edvard Pettersson in Los Angeles atepettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha atmhytha@bloomberg.net

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