Stark County’s largest hospitals battling in court [The Akron Beacon Journal, Ohio]

Apr. 6--Mercy Medical Center and Aultman Hospital have always battled for patients in the Canton area.

Now the cross-town rivals are fighting in court for millions of dollars, as well as their reputations.

Opening statements are expected to begin Wednesday morning in what has been deemed the largest civil case ever in Stark County Common Pleas Court.

Mercy is accusing Aultman's parent company, Aultman Health Foundation, of operating an unfair scheme with secret payments to insurance brokers and doctors to control the health-care market in Stark County.

Aultman has maintained it used fair, legal strategies to keep health care local and less costly while warding off threats from Mercy's former for-profit owner.

Stark County Common Pleas Court Judge Frank G. Forchione has allotted eight to nine weeks for the trial, which is expected to involve more than 100 witnesses.

Forchione interviewed 300 potential jurors last week to find Stark County residents who didn't have conflicts of interest. The task was challenging, considering the hospitals are among the region's largest employers, as well as Stark County's biggest health-care providers.

Aultman Health Foundation is Stark County's largest private employer, with about 5,000 employers. Mercy Medical Center is the county's third-largest private employer, with about 2,500 employees.

"It's the largest civil case, I've been told, in Stark County," Forchione said.

In a lawsuit filed in December 2007, Mercy is accusing Aultman of misusing charity money to fund secret payments to insurance agents to steal away patients.

Mercy claims Aultman paid nearly $9.1 million in extra payments called "conversation support payments" to select brokers from 1997 to 2007 who persuaded companies to switch to AultCare insurance coverage, according to court records. Aultman is the only in-network hospital for AultCare, according to the suit. Patients typically are required to go to an in-network hospital to get their care at the lowest out-of-pocket cost.

According to the suit, Aultman targeted insurers that had contracts with Mercy, including Akron-based SummaCare.

The brokers were required to keep those additional payments secret, even from the companies they represented and convinced to switch to AultCare, according to allegations in court documents.

Insurance brokers advise employers and help them negotiate and select the best health insurance coverage for their employees.

Attorneys representing Mercy have said that doctors in the region also received payments for agreeing to contract only with Aultman's AultCare insurance plan.

Along with Aultman Hospital, the Aultman Health Foundation, insurer AultCare Corp. and McKinley Life Insurance Co. are named as defendants.

Mercy is seeking between $100 million and $150 million in damages, an attorney representing Aultman said during a pre-trial court hearing.

Aultman has denied those allegations and filed a countersuit accusing Mercy of spreading "libelous falsehoods."

During a pretrial hearing last year, Aultman attorney Allen Schulman said the hospital developed the broker payment program after the former for-profit Columbia HCA acquired a 50-percent ownership stake in Mercy.

At the time, he said, Mercy's owner threatened to "bury Aultman."

Columbia HCA subsequently sold its ownership stake to Cleveland-based University Hospitals. Last year, the Sisters of Charity Health System acquired full ownership of Mercy.

Aultman is seeking actual and punitive damages, along with court orders barring Mercy from making similar claims in the future.

The case isn't the first time Aultman has faced legal challenges over its conversion support program.

The former HomeTown Health Plan (now owned by the Health Plan of the Upper Ohio Valley) also is accusing Aultman of stealing customers by giving secret payments to insurance agents who persuade clients to switch health insurers. The case is pending in Tuscarawas County Common Pleas Court.

In 2005, Aultman purchased another competitor, Professional Claims Management of Canton, that filed a suit with similar claims. That suit was dismissed before it went to trial.

Cheryl Powell can be reached at 330-996-3902 or chpowell@thebeaconjournal.com.

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