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Doctor receives payment, apology from Health Department

Bogus complaint filed during divorce

Dermatologist Dr. William “Phil” Werschler is rebuilding his practice after a faulty investigation fueled a series of legal problems that nearly cost him everything. (Dan Pelle)
Dermatologist Dr. William “Phil” Werschler is rebuilding his practice after a faulty investigation fueled a series of legal problems that nearly cost him everything. (Dan Pelle)

A Spokane dermatologist has wrung a $600,000 apology from state health officials who went public with outrageous charges of drug abuse and medical fraud based on a bogus tip from his ex-wife.

The pending payout to Dr. William “Phil” Werschler is among the largest settlements in decades by the Washington state Department of Health involving a physician, agency officials say. The public apology might be the first of its kind, they say.

The state will scrub the Werschler case from its website, though the case reports will remain on file for public inspection.

In a separate lawsuit settlement signed last week, Werschler collected more than $100,000 from his ex-wife, Kara Werschler. She ignited the investigation during the waning weeks of the couple’s bare-knuckled divorce by filing an anonymous complaint studded with salacious accusations of office cocaine binges, sex orgies with staff and patients, hiring prostitutes, and falsification of medical drug records.

Kara Werschler and her attorneys declined to comment for this story.

The case decimated Werschler’s practice and personal life, he said last week.

“This was a good faith effort to protect the public, but there were oversights during the investigation,” the state’s official apology reads. “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 …”

‘The scarlet letter’

Though the apology serves as his exoneration, Werschler knows 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, he said. Pharmaceutical and research companies withdrew his professional affiliations. Longtime friends and medical colleagues distanced themselves.

State officials say they were duty bound to investigate the anonymous allegations that eventually looped back to Kara, according to depositions. But the state’s two-year probe spiraled into conspiracy, vendetta, and a complete loss of investigative protocol and perspective, said Werschler’s attorneys.

The doctor hired some of Spokane’s top litigators to try to clear his name. Mark Vovos and Bill Etter defended him against the erroneous state charges. Bob Dunn and Mike Tucker handled the recourse, targeting the state and Kara Werschler for damages.

Their work turned the state’s investigation inside out.

Top health officials now use the Werschler case as a teaching tool, and “new practices are in place to prevent these types of oversights in the future,” the official apology states. 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 Werschler’s demands he be fired. Correll was not made available by the health department for comment.

But Karen Jensen, the assistant health secretary who oversees DOH investigative services, said Correll continues to investigate health care professionals in Spokane.

“This case, coupled with other cases with licensed professionals, has prompted us to make sure to keep investigators and attorneys up to date on the balance point of public protection and the rights of respondents,” she said.

The case has not disarmed investigators or muted the state’s role of investigating medical providers, she said.

The state and Werschler agreed to one change: that his office comply with pharmaceutical record-keeping protocols and submit to twice-yearly audits. A lack of such record-keeping was the one charge that DOH sustained after the investigation.

Complaint filed during divorce

Werschler knows that what had been a bright professional future has been dimmed.

Now 54 years old, he was a leader in the field of dermatology. He published articles in peer-reviewed journals, conducted drug trials, counseled drug companies on new therapies and traveled the academic lecture circuit to universities across the country.

Werschler grew up in a modest family and graduated from Medical Lake High School.

He was the first member of his family to graduate from college, collecting dual degrees in sociology and biology from Eastern Washington University.

His science acumen caught the attention of professors, and Werschler made the unusual jump in 1981 from a mid-tier university in Cheney to medical school at George Washington University in Washington, D.C.

Werschler continued to excel. He had an internship in Tucson, Ariz., then returned to George Washington and specialized in dermatology during his residency at the university’s medical center.

After a clinical consulting stint at the National Institutes of Health in Bethesda, Md., Werschler was on track for an academic and research career.

His mother became ill, however, and he passed up some intriguing opportunities and moved to Spokane. He had an offer to join the Rockwood Clinic but instead joined Dr. Michael Ryan’s dermatology practice in north Spokane.

Werschler eventually took over the clinic.

In 1993 he met Kara, 10 years his junior. They married in 1994 and started a family three years later.

The couple have three children, the last born in April of 2003.

And then the marriage crumbled. Kara Werschler moved out in August 2003, and the divorce was filed that fall. It was nasty from the start, consuming hundreds of thousands of dollars in legal fees.

The divorce eventually ended up in front of the Washington state Supreme Court over ownership of the dermatology practice.

Since Werschler had owned the practice years before he met Kara, he was awarded the clinic.

It was during the appeals process that Werschler’s ex-wife filed an anonymous complaint with the U.S. Inspector General’s Office, which forwarded the allegations to DOH.

Dr. Werschler won primary custody of the couple’s children, though visitation rights and more accusations surrounding abuse, unfit parenting and other problems continued to be hurled back and forth.

Kara Werschler collected 60 percent of the couple’s substantial assets – including a life insurance policy and retirement income – along with a $250,000 cash payment.

Employees enlisted to spy on doctor

With the divorce all but final, Correll’s investigation got under way. The original tip was Medicare fraud.

Agents with the FBI and the Drug Enforcement Agency declined to pursue the accusations after a brief review.

The state’s probe unfolded in unexpected ways. Some employees were enlisted to enter the clinic after hours to secretly collect records and possible evidence, according to court documents.

Investigators even sought help from the needle exchange program, hoping to identify and interview prostitutes who they thought might be able to corroborate unfounded stories of Werschler’s sex habits.

Werschler said he was never interviewed – much less interrogated – by DOH investigators.

DOH records indicate he was asked on several occasions to talk about the allegations, only to refer the requests to attorneys who advised against talking.

Werschler said that as patients, employees and others became aware of the expansive investigation, he received a warning.

“I had patients come to me and say, ‘Hey, Phil, a health department investigator called and said you are under investigation and it’s going to be a national story. He said he’s taking you down. Big time. Lives are going to be changed.’ ”

Turns out that lives were changed.

Werschler said the entire episode is the most traumatic thing that ever happened to him.

“It eclipsed burying my parents,” he said. “To sit there and have to tell my children what was going on. That’s the hardest thing I’ve ever done.”

A few people and companies stood by Werschler while many others cut ties.

And though he pondered moving to another town and starting over with his second wife, Pam Werschler, he decided to stay. His clinic at Fifth and Browne is slowly recovering, and loyal patients, friends and employees are dedicated.

“This is my home,” he said. “I won’t leave.

“I shouldn’t be kicked out of my home based on the errors of a rogue investigation and a department run amok.”

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