The Ohio Supreme Court has agreed to hear Aultman Health Foundation’s appeal over a multi-million dollar ruling in favor of its cross-town rival Mercy Medical Center.
The high-profile Stark County case pits Canton’s hospital systems against each other over what Mercy claims were unfair business practices to lure away patients. Aultman has defended its practices as part of a strategy to bring low-cost, high-quality health care to the community.
An Ohio Supreme Court official said on Thursday that a date has not been set for oral arguments in the case, which the high court agreed to hear last week.
Earlier this year, the 5th District Court of Appeals upheld a Stark County Common Pleas jury’s decision from 2010 that Aultman should pay Mercy more than $6.1 million in damages for engaging in a pattern of corrupt activity by influencing brokers with money.
The appeals court threw out an order by Stark County Common Pleas Judge Frank Forchione that Aultman reimburse taxpayers $266,400 for giving insurance brokers secret bonuses.
The case centers on bonuses Aultman gave to select brokers to switch clients from other Mercy-friendly plans to Aultman’s AultCare. Aultman Hospital is AultCare’s only in-network hospital in Canton.
The brokers could earn as much as $200 per new person enrolled in AultCare, in addition to regular commissions, through the “conversion support payment” program.
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.
Aultman asked the Ohio Supreme Court to hear its appeal on the grounds that the verdict greatly expanded the state’s anti-corruption statutes and created “serious obstruction to the Ohio Department of Insurance’s ability to regulate the insurance business in this state,” according to a court filing.
The case is getting national attention within the health-care industry.
Several business and insurance industry trade groups filed briefs in favor of Aultman’s appeal. In its brief, the Ohio Chamber of Commerce said the appeals court opinion “creates new liability … for common competitive practices” and “ultimately will increase the cost of doing business in Ohio.” A filing by America’s Health Insurance Plans indicated clarification is needed by the court to indicate what type of innovative compensation programs are permitted.
In a prepared statement, Mercy spokeswoman Lynne Dragomier said: “In favor of Mercy, a jury in Stark County and the Court of Appeals have already concluded that Aultman’s Conversion Support Program violated the law. We continue to be confident in our position and look forward to presenting it to the Ohio Supreme Court…”
Cheryl Powell can be reached at 330-996-3902 or cpowell@thebeaconjournal.com. Follow Powell on Twitter at twitter.com/abjcherylpowell.