SPOKANE — A Spokane dermatologist won a $600,000 settlement and rare public apology from Washington state health officials who went public with charges of drug abuse and medical fraud based on a bogus tip from his ex-wife.
The payment to Dr. William “Phil” Werschler is among the largest settlements in decades by the state Department of Health involving a physician, agency officials said. The public apology might be the first of its kind in the state.
In a separate lawsuit, Werschler collected more than $100,000 from his ex-wife, Kara Werschler, who did not immediately return a message.
She ignited the investigation late in the couple’s bitter divorce by filing an anonymous complaint studded with accusations of office cocaine binges, sex orgies with staff and patients, hiring prostitutes and falsification of medical drug records.
The case decimated his practice and personal life, he told The Spokesman-Review last week.
“This was a good faith effort to protect the public, but there were oversights during the investigation,” the state’s official apology said. “We apologize for those oversights and regret any damage done to Dr. Werschler’s personal goodwill, reputation and the distress this has caused his family.”
Despite the apology, Phil Werschler, 54, said there remains an undercurrent of suspicion.
“I have the scarlet letter on me as a doctor, a husband and father,” he said.
His children were teased at school. Pharmaceutical and research companies withdrew his professional affiliations. Longtime friends and medical colleagues distanced themselves.
State officials said they were duty bound to investigate the anonymous allegations that eventually looped back to the ex-wife, according to depositions. But the state’s two-year probe spiraled into conspiracy, vendetta and a complete loss of investigative protocol and perspective, said Phil Werschler’s attorneys.
Top health officials now use the case as a teaching tool, and “new practices are in place to prevent these types of oversights in the future,” the official apology said.
Department of Health spokesman Donn Moyer said the case helped prompt a review and policy change in matters of investigations of licensed professionals.
Dwight Correll, who conducted the investigation, kept his job despite Phil Werschler’s demands he be fired. Karen Jensen, the assistant health secretary who oversees DOH investigative services, said Correll continues to investigate health care professionals in Spokane.
The case has not disarmed investigators or muted the state’s role of investigating medical providers, she said.
Phil Werschler said the entire episode is the most traumatic thing that ever happened to him. He pondered moving to another town and starting over with his second wife but decided to stay.
“This is my home,” he said. “I won’t leave.”