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Jury awards $14 million to Kentucky doctor who lost license in federal drug case

A Kentucky doctor accused of writing improper drug prescriptions won a $14 million judgment in a case in which he argued pharmacy companies wrongly attributed drug orders to him, making it more likely he would be charged with a crime.

A jury in Perry County returned the verdict last week in favor of James Dustin Chaney in his lawsuit against CVS and Rite Aid of Kentucky.

Jurors in his lawsuit found that the two pharmacy companies “knowingly or recklessly” reported that he wrote prescriptions he really hadn’t. This put Chaney in a false light as someone who had written a large amount of prescriptions for powerful opioid painkillers, jurors ruled.

Painkillers such as those have been responsible for thousands of deaths and overdoses in Kentucky.

Chaney was charged in 2014 with prescribing drugs illegally and ultimately sentenced to 30 months in federal prison.

The jury awarded Chaney $10 million for past, present and future mental anguish; $2.5 million for lost wages; and $1.5 million for impairment to his ability to earn money, according go the verdict form.

The jury put the liability for the damages at 53% for CVS and 45% for Rite Aid, according to Laraclay Parker, one of Chaney’s attorneys. Each company would have to pay that percentage amount of the award.

The jury attributed 1% of the liability to a third company, R/X Discount Pharmacy, and said Chaney was responsible for 1% of the damage he suffered by not doing enough to monitor prescribing data about himself.

An attorney representing Rite Aid declined comment on whether the company will appeal the judgment. A spokesman for CVS said the company respectfully disagrees with the verdict and is reviewing options, including whether to appeal.

Chaney lost his medical license as a result of the 2014 criminal case, but plans to ask the state to reinstate his license.

“We are thankful that the jury rendered a just verdict in Dr. Chaney’s case and we look forward to bringing this evidence before the Kentucky Board of Medical Licensure,” Parker said.

Chaney grew up in Hazard and returned there to practice after attending medical school at the University of Pikeville and work at the University of Kentucky and the University of Tennessee, according to court documents.

In 2010, he opened a pain clinic called Clarion Health and Wellness in Hazard. Chaney hired an unemployed doctor, Andrew Krasuski, whose field was obstetrics and gynecology, to see patients at Clarion while Chaney worked at a hospital.

Chaney intended to run a legitimate pain clinic, but wasn’t able to hire a specialist in pain management, according to court documents.

In the summer of 2012, Chaney started to notice Krasuski was over-prescribing drugs and dispensing high dosages of drugs to patients.

He advised Krasuski to lower the amount of drugs he prescribed, according to a court document, but didn’t get rid of him or close the clinic, which he sold in December 2012.

A federal grand jury indicted Chaney on charges including conspiring to illegally distribute drugs, operating Clarion as a pill mill and conspiracy to commit money laundering. Krasuski and the officer manager at Clarion, Benny Ray Bailey Jr., also were charged.

Krasuski died by suicide while the charges were pending.

Bailey pleaded guilty to conspiracy to commit money laundering. He said in his plea he told Chaney of concerns about improper prescribing by Krasuski, but Chaney rebuffed him.

Chaney pleaded guilty to conspiracy to commit money laundering, meaning using money generated by improper prescribing for loan payments and other costs. He acknowledged that he “deliberately closed his eyes to the fact that Krasuski was overprescribing,” according to his plea agreement.

Even before he was sentenced, however, attorneys for Chaney filed the lawsuit claiming that CVS and Rite Aid had provided incorrect information to a Kentucky program that tracks prescriptions.

Prescriptions were attributed to Chaney that he didn’t write or that were not authentic or complete, making it look like he was prescribing more drugs than he really was, which made it more likely police would investigate him, the complaint claimed.

Parker, Chaney’s attorney, said about half the prescriptions Rite Aid logged under Chaney’s name should not have been attributed to him, and about 30% at CVS.

Chaney recognized the problem when he kept getting notices about prescriptions filled in his name after he had given up his license, Parker said.

One piece of evidence in the lawsuit was an internal document from CVS in which the company acknowledged hundreds of misattributed prescriptions in Chaney’s name, Parker said.

The jury ruled CVS and Rite Aid did not use proper care in putting information about Chaney into the monitoring system between 2010 and 2014.

Parker represented Chaney along with Cody McIlvoy, Jeffrey Morgan and Jeremy Morgan.