The Ohio Supreme Court has thrown out Aultman Health Foundation’s appeal in its ongoing, multimillion dollar legal feud with rival Mercy Medical Center.
Aultman has been fighting a decision by Stark County jurors in 2010 that it must pay Mercy more than $6.1 million in damages for unfair business practices.
The Ohio Supreme Court originally agreed to hear Aultman’s appeal in the case, which pits Canton’s hospitals against each other. After further review, however, the court opted Wednesday not to take the case.
The legal battle centers on “secret” bonuses paid to select brokers for switching employers from other insurance plans to Aultman’s insurance company, AultCare.
Aultman Hospital is AultCare’s only in-network hospital in Canton.
“Basically, they were operating in a corrupt manner,” Mercy President and Chief Executive Thomas Cecconi said in an interview Wednesday. “... Our hope is that employers and people in this community are now going to carefully consider these facts.”
Aultman is deciding how to proceed following Wednesday’s ruling, said Canton attorney Allen Schulman, who is representing Aultman.
“We just received the court’s decision and we are exploring our legal remedies,” he said. “Nevertheless, we will continue to provide the best quality health care to our community.”
At the end of the two-month trial in Stark County Common Pleas Court, jurors decided Aultman should pay Mercy more than $6.1 million in damages for engaging in a pattern of corrupt activity by influencing brokers with money. Jurors sided with Aultman on five other counts.
Evidence during the trial showed that for a period of time, brokers weren’t allowed to disclose the payments to anyone, even the clients they represented.
Aultman officials have said the confidentiality requirement was dropped in 2004, well before Mercy filed its lawsuit.
Businesses rely on brokers to help them shop around and select the best health coverage for employees and their families.
“After years of Aultman’s unsuccessful legal arguments trying to justify these corrupt practices, the unanimous Supreme Court ruling should cause Aultman to take an introspective look at its corporate culture that enabled this corrupt practice to be created and implemented,” Canton attorney Lee Plakas, who represented Mercy, said in an email.
Along with damages, Stark County Common Pleas Judge Frank Forchione ordered Aultman to pay Mercy $4 million in attorneys’ fees.
Mercy is entitled to an additional $500,000 to $1 million in interest on the punitive damages and legal fees incurred since 2010, said Matt Heinle, Mercy’s vice president and general counsel.
The hospital also plans to ask the common pleas court to make Aultman pay for Mercy’s legal fees through the appeals process.
Cecconi said Mercy has not determined how the money awarded in the case will be used.
“The money will be used here in support of Mercy, whether it’s in operations or other capital projects or technology we need to purchase,” he said. “Basically, no matter how you look at it, it’s going to be used for patient care.”
Aultman has continued to criticize the case Mercy filed, calling it a waste of resources for the nonprofit health-care organizations.
“We have always felt that this case was not positive for our community, that resources were shifted in a way that was not beneficial to the citizens of our community,” Schulman said. “I don’t think that it serves the community well.”
Cecconi said Mercy felt an obligation to fight Aultman’s business practices for the community’s sake.
“From the beginning, we felt that it was our responsibility to bring this lawsuit,” he said. “That decision wasn’t made lightly. ... It was our intent to establish a fair and ethical business environment. We’ve never wavered from that. And, I think, now we’ve accomplished that.”
Cheryl Powell can be reached at 330-996-3902 or firstname.lastname@example.org. Follow Powell on Twitter at twitter.com/abjcherylpowell.