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The Suburbanite
  • Hospital clash has sides prepped for long trial

  • The first phase of the civil trial between Mercy Medical Center and its cross-town rival, Aultman Health Foundation, begins Tuesday. Mercy accuses Aultman, including its hospital and insurance plans, of engaging in unfair business practices. Aultman denies any wrongdoing and has sued Mercy for defamation and other alleged ...
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  • The brown boxes are numbered — 1 through 21 — and placed neatly against a wall in the court clerk’s office. Next to the boxes sits a stack of sealed documents nearly five feet high.
    This is only part of the file generated by the legal fight between Mercy Medical Center and Aultman Health Foundation. The rest takes up a shelf in another room.
    After more than two years of legal maneuvering, the case is about to go to trial. The first phase of jury selection is scheduled to begin Tuesday. Six hundred prospective jurors have been called for the trial, expected to last eight to 10 weeks.
    But the logistics of this heavyweight bout aren’t the only issue. Tens of millions of dollars are at stake between two important and influential not-for-profit institutions with roots in the community that go back more than a century.
    In a five-county area made up of Stark, Tuscarawas, Wayne, Carroll and Holmes, Aultman Hospital is the largest medical facility. Mercy Medical Center, controlled by the Sisters of Charity of St. Augustine Health System, is No. 2 — and Aultman’s chief competitor.
    With more than 5,000 employees, Aultman Hospital is Stark County’s largest employer. Mercy has more than 2,600 workers and is the third-largest private employer in the county.
    In addition to the hospital, Aultman Health Foundation’s subsidiaries include the AultCare and McKinley Life insurance providers.
    THE DISPUTE
    Stark County Common Pleas Judge Frank Forchione, who inherited the case when he took office last year, met with representatives from each side Wednesday without reaching a resolution.
    Heeding the judge’s wishes, the parties and their attorneys won’t discuss the case before the trial.
    Central to the dispute is the Aultman defendants’ practice, begun in 1997, of paying independent insurance brokers bonuses in addition to regular commissions if they brought new clients to the AultCare and McKinley Life insurance plans.
    Brokers act as middlemen who match businesses with insurance providers. Confidentiality agreements required brokers to keep the Aultman bonuses secret, even from their clients.
    Mercy says the payments were an illegal scheme to steer business to Aultman’s hospital and insurance plans, and that Aultman Health Foundation improperly used its tax-exempt, not-for-profit status to subsidize for-profit subsidiaries and fund the broker payments.
    Aultman Health Foundation defends the payments as legal, fair and similar to the practices of other insurance companies. It also defends its corporate structure, in which the not-for-profit foundation pools and disburses money for subsidiaries, as key in keeping costs low.
    In a countersuit, the defendants accuse Mercy of defamation, unfair competition and other misconduct, and say its competitor is pursuing a baseless lawsuit because Mercy is either unwilling or unable to compete legitimately in the marketplace.
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    FIRST TRIAL
    Mercy’s allegations aren’t new. They first surfaced in a lawsuit against the Aultman defendants in 2003 brought by insurance claim administrator Professional Claims Management. Another competitor, Hometown Health Plan, sued in 2006.
    But there never has been a trial. Aultman purchased PCM on the eve of that scheduled trial, and the Hometown case is stalled as the Ohio Department of Insurance completes an investigation of Aultman’s practices.
    So Mercy’s lawsuit will be the first to go before a jury.
    Opening statements are set for April 7, with the trial running Tuesday through Friday during the succeeding weeks. Each side has 14 trial days and two rebuttal days to present its case. Closing arguments are scheduled for June 4.
    Acknowledging the scope of the trial, in his order setting the schedule, Forchione wrote: “It is the court’s hope that the parties take into consideration the burden being placed on the jurors, as well as their attention span in presenting their case in an expedient fashion.”