Lawsuit Against Hagyard Equine Medical Reveals Misdating of Auction X-Rays

Twelve of the 17 partners in one of Central Kentucky’s largest equine veterinary practices have reported themselves to the state’s veterinary board for potential violations of state statutes that regulate veterinarians, according to evidence presented during a pre-trial hearing to a civil suit in Fayette County Circuit Court in Lexington, Ky.

Hagyard Equine Medical Institute is embroiled in a lawsuit filed last summer by three of its associate veterinarians (Drs. Rocky M. Mason, Christopher R. Smith, and Patrick J. Ford) for what they claim are breaches of promise related to their becoming shareholders in the company. In the background of the contract lawsuit, the plaintiffs sent a letter to Hagyard executive committee members on Jan. 11 urging them to put a stop to what they said was a long-held practice of “falsifying radiographic reports” by modifying dates on x-ray images filed in a repository with public auction houses such as Keeneland and Fasig-Tipton.

Testimony at a pretrial hearing held Thursday revealed some veterinarians at Hagyard had been modifying the dates shown on presale radiographs for years, potentially as far back as 2006. Radiographs for horses entering public auctions at companies like Keeneland and Fasig-Tipton must be taken within a specified timeframe of an entry’s sale date (some auctions require 15 days, while others require 21 days).

“The ultimate goal would be to have them taken on the day of the sale, but obviously that’s impossible,” Keeneland Director of Sales Operations Geoffrey Russell said in a deposition earlier this year. “You want them to be taken as close to a sale as possible.”

In a video recording of the deposition played at the hearing, Russell said radiographs should be as recent as possible in order to provide buyers with a complete and accurate picture of any potential injuries or deformities in a sale prospect.

In a motion filed by Hagyard attorneys in May, attorneys explained veterinarians may have 400 to 500 horses each to radiograph, scattered across sales of 13 days. The time constraints mean, according to the motion, veterinarians would have to make multiple trips to take radiographs in the proper timeframe for horses at the beginning and end of the sale.

“In light of those time constraints, it likely occurred on some occasions that, when a group of horses were radiographed at a farm, a few might show a date that is later than when it was taken. However, what is self-evident from the plaintiffs’ letter is the fact that the radiographs placed in the repository by the HDM surgeons were not altered in any way,” the motion read. “Even if the date shown on the exterior of the radiograph is a day or two different from the date actually taken, that difference has absolutely no impact on the accuracy of the image, or the condition of the horse when the radiograph was taken.”

Five of the 12 veterinarians self-reporting to the Kentucky Board of Veterinary Examiners (KBVE) have allegedly admitted to modifying radiograph dates so they would fall into the required range, although they were actually shot earlier. The remaining seven disclosed to the board that they were aware of the practice but did not report it, which could also constitute a violation of KBVE state statute.

The Kentucky Board of Veterinary Examiners’ Code of Ethical Conduct states that veterinarians “shall not engage in fraud, deceit, or misrepresentation in the practice of veterinary medicine.” In Keeneland’s conditions of sale, consignors are charged with verifying pre-sale information provided to the repository is accurate.

The plantiffs alleged that the willingness of some veterinarians to modify dates on radiographs took work away from them and other field veterinarians who refused to engage in misdating.

“While our concerns primarily relate to the fraudulent practice’s potential ethical and legal ramifications, given our current position, we cannot help but conclude that our repeated objections and refusal to engage in this mis-dating practice have hurt our standing among the Hagyard partners, who obviously not only approve of the practice but advocate for its expansion,” read the Jan. 11 letter. “Further, we believe that the Hagyard surgeons’ ability and apparent willingness to manipulate the date of a radiograph image has given those doctors an unfair competitive advantage over the Hagyard field veterinarians who can’t and won’t participate in this mis-dating practice, and has resulted in a significant reduction in radiograph business and resulting revenue production, and thus compensation for the field veterinarians over the years. Without this improper advantage, our productivity numbers and those of Hagyard’s other field veterinarians would undoubtedly have been higher every year of our practice with Hagyard, thereby raising our compensation value to the company when considering our respective partnerships.”

According to testimony from surgeon Dr. Michael T. Hore, who told the court he self-reported to the veterinary board for modifying radiograph dates, veterinarians engaging in this practice would change the date on the laptops attached to digital radiograph machines prior to shooting a set of x-rays so the image date would appear to fall within the 15 or 21-day timeframe required.

“It was kind of a cultural thing for a while,” said Hore, who estimated he had been misdating radiographs for six or seven years. “I didn’t think it was anything of significance.”

Hagyard partner Dr. Stuart Brown testified he and other Hagyard representatives notified Keeneland about the misdating practices, as well as Mixed Animal Veterinary Associates of North America (MAVANA), which announced a merger with Hagyard earlier this year.

“I believe it was certainly a violation of an ethical code,” said Brown when asked about the misdating practice, which he said did not impact the quality of the radiographic images. “I don’t believe it was fraudulent. I don’t believe the intent was to deceive.”

Brown was chair of the American Association of Equine Practitioners’ Public Auction Task Force in 2009 when the group released a list of best practices for veterinarians engaged in sale work.

“Modification or alteration of radiographic reports by a veterinarian or anyone involved with the sales process is considered unethical and fraudulent,” read one of the Task Force’s recommendations published in June 17, 2009.

In an April deposition, Brown testified he was unaware of how many Hagyard partners were misdating radiographs or had self-reported to the KBVE. Brown reported himself to the KBVE subsequent to a March meeting of Hagyard partners – not for misdating radiographs, but for being aware of the practice and failing to report colleagues.

Plaintiff Mason revealed in his testimony Thursday that a non-disclosure clause in his Hagyard employment contract prevented him from reporting the misdating or any other goings-on at the clinic to the veterinary board or other outside entities. When cross-examined by Hagyard attorneys about why he chose to call Hagyard veterinarians out on the practice now, Mason said, “I think it’s bad for the company. I think it’s bad for the business. I think it’s bad for the industry, and it needs to be stopped. Furthermore, I have concern for sullying the name of Hagyard and what light I’d be seen in moving forward.”

The KBVE is investigating.

The pretrial hearing was recessed Thursday, prior to Hagyard attorneys presenting their case on radiograph dating and contractual issues. The case is scheduled to go trial in December.

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