A Nonprofit Hospital Fights To Win Back Charitable Halo | WSJ | 6.29.04

In a case that could redefine what it means to be a charitable hospital, not-for-profit hospitals across the U.S. are watching as a big Catholic facility in Illinois fights to regain its local property-tax exemption amid questions about financial treatment of the uninsured, including aggressive debt-collection tactics. …

Indeed, amid calls to make not-for-profit hospitals — which make up 82% of all U.S. hospitals — more accountable for the tax breaks they enjoy, there is growing uncertainty about just what qualifies a hospital as a tax-exempt charitable institution. …

Last week, at least one congressional hearing shed some light on hospitals’ treatment of uninsured patients and allegations that they are often overbilled. Richard Scruggs, the well-known tobacco lawyer, has helped engineer and coordinate lawsuits filed in recent weeks against 18 not-for-profit hospital systems — including Provena and its parent company, Provena Health — seeking class-action status. The suits allege that hospitals that charge uninsured patients the highest rates for care, hound patients for debts and benefit from profit-making businesses within their walls shouldn’t be permitted to call themselves charities and avoid taxation. …

Some hospitals may have invited the scrutiny, suggests Richard Wade, a senior spokesman for the AHA. “If you act like a corporation, you get treated like one — and you know the public doesn’t like big corporations.” …

The Open Source Paradigm Shift | O’Reilly Weblogs | 6.26.04

Full Article

As Doctors Write Prescriptions, Drug Company Writes a Check | NYT | 6.27.04

The check for $10,000 arrived in the mail unsolicited. The doctor who received it from the drug maker Schering-Plough said it was made out to him personally in exchange for an attached “consulting” agreement that required nothing other than his commitment to prescribe the company’s medicines. Two other physicians said in separate interviews that they, too, received checks unbidden from Schering-Plough, one of the world’s biggest drug companies.

“I threw mine away,” said the first doctor, who spoke on the condition of anonymity because of concern about being drawn into a federal inquiry into the matter. …

At the heart of the various investigations into drug industry marketing is the question of whether drug companies are persuading doctors — often through payoffs — to prescribe drugs that patients do not need or should not use or for which there may be cheaper alternatives. Investigators are also seeking to determine whether the companies are manipulating prices to cheat the federal Medicaid and Medicare health programs. Most of the big drug companies, meanwhile, are also grappling with a welter of suits filed by state attorneys general, industry whistle-blowers and patient-rights groups over similar accusations. …

Tony Farino, leader of the pharmaceutical consulting service at PricewaterhouseCoopers, said that as a result of the investigations many companies in the drug industry were hiring executives to police marketing and sales practices. …

Discounting Hospital Care To Poor Brings Hard Choices | WSJ | 6.24.04 (subscription)

An unemployed man with $40,000 in the bank has a $2,500 hospital bill. A widow with almost $80,000 has a hospital bill of more than $14,000.

Which one deserves a discount? …

The American Hospital Association recently asked its 4,800 member institutions to adopt guidelines stressing the need for charity care and humane collections. More than half the hospitals said they had either looked closely at how they treat needy patients or were in the process of doing so. …

Michael Dowling, chief executive of the North Shore-LIJ system, sees a bigger problem — that hospital charity programs are being asked to take up the slack for America’s nearly 44 million uninsured. “The policy makers have to get to the fundamental policy issue: You have tens of millions of people without insurance,” he says. “If everybody had some form of coverage and you had universal insurance, you would mitigate the need for all these elaborate programs and debates.”

Bill Clinton Book My Life | 6.23.04

Today is D-day. I feel good. I feel real good. I’ve slept well. I’ve eaten a large breakfast with eggs and sausages. I feel like a boxer just before the fight.

As verdict nears, man goes on lam…for a day | Sacramento Bee | 6.23.04

Jordan Rosenberg finally ran out of time and nerve. …

Indicted by a federal grand jury in October 2000, he waged a fierce fight against Medicare fraud charges. …

Throughout a 10-day trial spread over four weeks, Rosenberg exuded confidence. The fact that he flunked out of law school after the second year did not deter him from relieving Gilbert Eisenberg as his trial lawyer, donning a three-piece suit and defending himself. …

“I’m very persuasive,” he assured the jury in his closing argument last week. …

“We all know I’m a very bright guy. The government just told you that,” he boasted in the argument. …

After the verdict, jurors expressed resentment at Rosenberg’s cockiness. …

Rosenberg billed Medicare more than $1.3 million for psychological counseling and other services allegedly provided between 1996 and 1999 to 170 developmentally disabled persons living in group homes in Northern California. He was paid more than $322,000 on the claims. …

To facilitate the formation of those companies and hide the scam, according to court papers, Rosenberg misappropriated the identity of a U.S. soldier named David Barnaby who was killed in action in 1967 in Vietnam.

Pointing at Rosenberg during his closing argument, Twiss told the jury, “I will show you David Barnaby. He is seated right over there.

“I will show you a crook. He is seated right over there.”

Uninsureds Bring Five More Class Action Litigations | Press Release | 6.22.04

Oxford, Mississippi, (June 22, 2004) — Following uninsured patients’ class action lawsuits brought last week against thirteen nonprofit hospitals located in eight different states, class action lawsuits today have been filed against five different nonprofit hospitals by uninsured patients of those hospitals. These most recent defendant nonprofit hospitals are located in Arizona, Colorado, Illinois, Missouri and Texas. Accordingly, suits by uninsured patients, who have been victimized by the failure of nonprofit hospitals to fulfill their obligations to provide government required charity care, is growing rapidly and is proceeding in almost all the major geographic regions of the country.
The class action lawsuits filed today by uninsured plaintiffs are:

• In Arizona: Defendant: Banner Health; United States District Court, District of Arizona; litigation filed by Zimmerman Reed LLP.
• In Colorado: Defendant: Centura Health Corporation; Catholic Health Initiatives; Catholic Health Inititiaives Colorado; and Portercare Adventist Heath System; In the United States District Court for the District of Colorado; litigation filed by Purvis, Gray & Murphy, LLP and Law Offices of Archie Lamb LLC.
• In Illinois: Defendant: Resurrection Medical Center and Resurrection Health Care; In the United States District Court for the Northern District of Illinois, Eastern Division; litigation filed by Clifford Law Offices, P.C.
• In Missouri: Defendants: BJC Health System dba BJC Healthcare; In the United States District Court for the Eastern District of Missouri; litigation filed Bartimus, Frickleton, Robertson & Obetz, P.C. and Gray, Ritter & Graham, P.C.
• In Texas: Defendants: Baylor Health Care System, Baylor University Medical Center; In the United States District Court for the Northern District of Dallas; litigation filed by Frenkel & Frenkel, P.C. and Scruggs Law Firm, PA.

Cases of a similar nature are expected to be filed in the near future against major hospitals in more states.

Named as a conspirator in all of the cases is the American Hospital Association (AHA), the industry’s trade association, which provides substantial advice to the defendant nonprofit hospitals on billing and collection practices as well as other aspects of hospital operations. The defendant nonprofit hospitals charge their uninsured patients “artificial sticker price” for their healthcare, higher than any other patient class, and then aggressively pursue those patients who can’t pay by using often demeaning and predatory collection practices that all too frequently have resulted in economically debilitating consequences to the uninsured patient, including personal bankruptcy.

Responses by some nonprofit hospitals and the AHA to the suits reveal that the hospitals are simply attempting to gloss over the fact that many of the nation’s nonprofit hospitals are intentionally breaching their contractual obligations with the federal, state, and local authorities to provide charitable medical care to their uninsured patients. Despite this, these nonprofit hospitals are still grabbing their substantial tax exemptions by misleading the public and government authorities with a public relations campaign of misinformation and financial data produced in many instance by “Hollywood type” accounting schemes. As a result, contrary to what they would have the public and authorities believe, the defendant nonprofit hospitals, aided and abetted by the AHA, are engaged in amassing and hoarding billions of dollars of untaxed income derived from multiple sources, including: the breaching of their agreements to provide affordable charitable healthcare to the uninsured; predatory collection practices targeted principally at the uninsured; the upstreaming of millions of dollars from the hospital’s profit making enterprises, some of which have little or nothing to do with healthcare; and the establishing and maintaining of offshore accounts in tax havens known for their secrecy. In effect, as a result of these tactics, the defendant nonprofit hospitals are pulling enormous sums of monies — potentially trillions of dollars collectively as some sources estimate — out of the country’s already financially hard-pressed healthcare system.

The defendant nonprofit hospitals and the AHA know full well that the uninsured patients are being charged “sticker shock” prices for hospital healthcare. They know full well that the true fair market value for their services are the discounted prices they have arranged for those patients with Medicaid and private health insurance. They know full well that they are distorting the figures they are reporting as charity care and that practices such as taking unpaid hospital charges as both bad debt and charity care is not appropriate. The defendant nonprofit hospitals know full well that, given the vast liquid assets they hold, they can afford to honor their contractual obligations with governmental authorities as well as live up their own mission statements. These obligations and those missions are to provide charity healthcare for uninsured patients, the patient group which needs it the most.

For more information on these profiteering hospitals and the litigation against them, go to www.nfplitigation.com.

Doctor’s Testimony Leads to a Complex Legal Fight | NYT | 6.21.04

Dr. John Fullerton, a San Francisco internist and an occasional expert witness in medical malpractice suits, opened a letter from the Florida Medical Association not long ago. He thought it was a membership solicitation. …

Inside, instead, was a complaint from three doctors about expert testimony he had given for the patient in a malpractice case against them in Tampa last year. The doctors had won, and now they wanted the medical association to punish Dr. Fullerton for what they said were his “erroneous opinions.” …

“These are intimidation tactics,” he said. “Medical malpractice is being targeted right now. Plaintiffs’ experts are being scapegoated in the process.” …

Mr. Howard of Common Good said that the three sets of disputes - the medical malpractice suit, followed by the disciplinary action, followed by the libel suit - illustrated what was wrong with the justice system generally. “It’s literally a kind of perpetual-motion machine,” he said.

Mr. Howard said specialized medical courts, which do not use juries and rely on court-appointed experts, would solve many problems conventional expert testimony produced.

“We’re asking lay jurors to decide which expert is more credible,” he said. “You might as well flip a coin.”

Expert witness sues critics | AMNews | 6.28.04

California internist and geriatrician John Fullerton, MD, says a request for the Florida Medical Assn. to review his expert testimony in a medical malpractice trial defamed him and hurt his professional credibility. …

Earlier this month, Dr. Fullerton sued the FMA and three physicians who asked that the association review his testimony for defamation. He also is asking the court to put an end to an FMA program that subjects courtroom testimony to peer review. Dr. Fullerton believes that the program is designed to intimidate physicians who testify for plaintiffs in medical malpractice trials and is suing, in part, under the Florida RICO law. …

American Medical Association policy says that medical expert testimony is equivalent to the practice of medicine and that it should be peer-reviewed. The AMA says that state medical societies should work with state medical boards on the issue. …

The California Medical Assn. said the Medical Board of California should discipline doctors who knowingly give misleading or false expert testimony. The association voiced concerns on witness testimony to the California Attorney General, who in April issued an opinion saying a physician who knowingly provides false or misleading expert testimony can be subject to discipline by the medical board. …