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U.S. Sen. Jon Tester, a Montana Democrat, recently urged the Department of Veterans Affairs to comply with hiring laws after the VA’s Medical Center in Iowa City employed a former Billings neurosurgeon with a history of malpractice claims and a revoked medical license.

Facing termination, Dr. John Schneider resigned from the VA’s Iowa City hospital on Nov. 29.

“While I know that in some cases there will be medical outcomes that fall short of the patient’s desires, this should not be due to the facility having hired a surgeon with a known history of poor outcomes and malpractice, as evidenced by the loss of his or her medical license in a state,” Tester told the VA.

Schneider, who filed for bankruptcy in Montana, last year agreed to pay creditors $2.3 million to settle the case. Creditors included former patients with malpractice claims, including the family of a Billings man who died of an overdose of painkillers after Schneider performed back surgery on him in Cody, Wyoming.

The Wyoming Board of Medical Review revoked Schneider’s license in 2014 after the death of the Billings man. Schneider is licensed in Montana.

Schneider also is facing a Feb. 12 trial on criminal bankruptcy fraud charges in U.S. District Court in Billings for allegedly lying during the bankruptcy proceeding.

Tester, in a Dec. 7 letter to Dr. Carolyn Clancy, executive in charge of the Veterans Health Administration, took the VA to task for hiring Schneider despite knowing his malpractice and medical license history.

Tester asked the VA to ensure that Schneider “does not treat veterans in my state, either by being hired at a VA facility, or being reimbursed for treatment of a patient at a private facility that is in the community care network.”

The senator, who serves on the Senate Veterans' Affairs Committee, also advised VA administrators to comply with provisions in the 2016 Comprehensive Addiction and Recovery Act, which requires the VA to receive and consider information on medical license violations.

“It is my understanding that in this case, the Iowa City facility reviewed the history of this particular physician and nevertheless decided to hire him. This highlights the challenge many facilities face in finding clinicians to fill vacant positions,” Tester wrote.

“This incident raises broad and serious issues about the hiring process at VA — I’m not sure whether it was simply a lack of judgment by Iowa City VAMC, a lack of training or understanding of requirement to comply with CARA provision, poor supervision as this decision was taking place or a combination of all these factors and more,” Tester said.

The senator further asked the VA to give its directors “clear and direct” guidance with existing federal law as well as “their responsibility to hire qualified clinicians who will not abuse the trust of our nation’s veterans.”

Had Schneider not resigned, the doctor would have been removed from the job through a law Tester helped write, called the VA Accountability and Whistleblower Protection Act, a spokeswoman said.

Schneider would have been removed within two weeks’ notice and he could have appealed the decision, the spokeswoman said. The law ensures a final decision on firing within three weeks, with the fired employee having the right to take the matter to federal court.

The Iowa City VA hired Schneider on April 30. Schneider resigned in lieu of termination on Nov. 29, said Bryan Clark, public affairs officer for the Iowa City VA Health Care System.

“Upon review of Dr. Schneider’s case, we found his hiring was inconsistent with applicable law, because of incorrect internal VA guidance received during his hiring process,” Clark said in statement.

The VA is preparing a response to Tester, Clark said.

The VA’s hiring practices came under scrutiny recently when USA TODAY reported that the VA’s Iowa City hospital had hired Schneider despite the doctor being “forthright in his application” about his license being revoked and other malpractice problems.

USA TODAY also reported that the VA had hired other medical professionals with felony convictions or other misconduct sanctions.

Schneider’s resignation came after USA TODAY’S report.

Schneider did not respond on Monday to a request for comment.

Schneider, who had moved to Encinitas, California, from Billings, where his house was sold in the bankruptcy case, advised the bankruptcy court on Sept. 22 that his address had changed to an Iowa City residence.

Schneider, 51, was arrested on a federal warrant on Sept. 17 in Encinitas after he failed to show for arraignment in August in Billings on bankruptcy fraud charges. He appeared on Sept. 18 before a U.S. magistrate judge in San Diego, California, and was released without bond.

Schneider pleaded not guilty to the bankruptcy fraud charges in Billings on Oct. 12 and has been on release pending trial.

At the time of Schneider’s arrest, he also had surgeries scheduled in Iowa City.

Clark, the VA’s Iowa City spokesman, said two elective, non-urgent cases were rescheduled because of Schneider’s absence.

“The neurosurgery nurse practitioner on duty was aware of the physician’s absence and followed the agency’s contingency plan for unscheduled absences — providing all necessary care and treatment with oversight from the chief of surgical services,” Clark said in a statement.

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Federal Court, Yellowtone County Reporter

Federal court and county reporter for The Billings Gazette.