Expert compares broker payments: Aultman’s witness says competitors sometimes give better commissions [The Akron Beacon Journal, Ohio]

May 26--Brokers could earn more money from other health insurers than from AultCare, even with extra payments that a rival has called bribes. That was the expert testimony of a witness Tuesday in a Stark County lawsuit between its two main hospitals.

"The AultCare compensation really was not significantly richer," Maureen Loftus, a national economic expert called by Aultman Health Foundation, told jurors.

The civil case has been described as the biggest ever in Stark County Common Pleas Court. Mercy Medical Center is accusing its cross-town rival of using unfair tactics starting in 1997 to steer patients to Aultman.

Mercy has alleged Aultman Health Foundation and its subsidiaries stole as much as $100 million or more worth of business.

Aultman has denied those allegations and is seeking its own damages in a countersuit that accuses Mercy of spreading "libelous falsehoods."

In court on Tuesday, Loftus said that AultCare employees have spent about 10,000 hours working on issues related to the lawsuit at an estimated cost of $900,000 in salary and benefits.

Much of the case centers on

confidential extra payments Aultman gave to nine brokers who switched clients from other health insurers to Aultman's AultCare.

During her testimony, Loftus said her analysis concluded "the broker actually does better and would actually be paid more" in some cases by the former HomeTown Health Plan, now owned by the Health Plan of the Upper Ohio Valley.

The rival insurance company also is accusing Aultman of stealing customers by giving secret payments to insurance agents who persuade clients to switch health insurers. That case is pending in Tuscarawas County Common Pleas Court.

Under some scenarios, Loftus testified, Anthem and UnitedHealthcare also pay higher total commissions and bonuses to brokers than AultCare.

According to evidence previously presented during the trial, brokers participating in the program could earn as much as $200 per person who switched to AultCare.

Mercy has alleged that the "conversion support program" payments to brokers were part of a scheme to get more employer groups to switch to AultCare, which led to more patients going to Aultman Hospital.

Aultman Hospital is AultCare's only in-network hospital in Canton. Under most health insurance plans, patients must go to in-network facilities to pay the lowest charges.

A damage expert called earlier in the trial by Mercy testified that Aultman Hospital received $193 million worth of payments for medical services provided to patients converted to AultCare through the broker program.

Loftus told jurors that many factors influence employers' health decisions.

"Aren't they, generally speaking, also relying on advice from their brokers?" Mercy attorney Daniel R. Warren countered.

Warren also showed documents that indicated most of AultCare's enrollment growth from 1997 through 2004 came from enrollees who were switched to the insurance plan by brokers who participated in the extra payment program.

Attorneys for Aultman are expected to call Mercy President and Chief Executive Thomas Cecconi on cross-examination this morning.

Stark County Common Pleas Judge Frank Forchione then will allow both sides to call rebuttal witnesses before closing arguments.

Cheryl Powell can be reached at 330-996-3902 or [email protected].

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