A Stark County judge Tuesday said he wants to keep Aultman Health Foundation under the microscope for three years to ensure that it isn’t secretly paying independent insurance brokers. Common Pleas Judge Frank Forchione also awarded Mercy Medical Center $4 million in attorney fees and rejected Aultman’s request for a new trial.
Wanting to deter future fights between the county’s two largest hospitals, a judge says he will monitor Aultman Health Foundation for the next three years to ensure it isn’t secretly paying independent insurance brokers.
That decision was one of several issued Tuesday by Stark County Common Pleas Judge Frank For-chione in the lengthy and expensive legal fight be-tween Aultman and Mercy Medical Center, a battle that next heads to an appeals court.
In June, a Common Pleas jury awarded Mercy $6.1 million after determining the Aultman foundation and its subsidiaries — Ault-man Hospital, AultCare and McKinley Life — engaged in a pattern of corrupt activity with insurance brokers and caused Mercy to lose money while enriching themselves.
Aultman said the broker payments were consistent with its mission of providing quality, low-cost medical care.
The fight between the county’s largest health-care providers was expensive — estimated at $7.3 million for Mercy, $12 million for Aultman — and bruised the reputations of both institutions.
“The real tragedy is the $20 million spent in this inextricable maze,” Forchione wrote. “One can only wonder how many lives may have been saved or improved if these funds were geared for new treatments or research. This court intends to take the necessary action so that this civil war does not take place again.”
In his rulings, the judge wrote that he was hesitant to take action regarding health care in Stark County, given that Aultman and Mercy are two “outstanding, caring and cost effective hospitals.” But not placing restrictions on the defendants “would make a mockery of the nine week trial, the jury’s verdict and insult the general public.”
Aultman’s secret payments promoted a conflict of interest for brokers, gave Aultman an unfair advantage in the health industry and were an inappropriate use of charitable funds that resembled a “Soprano” enterprise, Forchione wrote.
The judge also said Aultman didn’t provide sufficient evidence to support the claim that its broker payments are now more transparent, and expressed concern over Aultman CEO Ed Roth’s statement after the trial that Aultman planned to conduct “business as usual.”
To keep Aultman from engaging in future misconduct, Forchione ordered it to disclose all payments, trips, incentives or other benefits it gives to insurance brokers, and to declare that compensation on federal tax and labor filings in a manner that isn’t misleading.
The judge said he will appoint a certified public accountant to watch over Aultman’s shoulder for three years to make sure his orders are followed. The cost of the accountant is to be shared by both sides.
The judge also ordered Aultman to pay $4 million in Mercy’s attorney fees — Mercy sought $5.5 million — and said the defendants will have to pay $190,800 to Stark County and $75,600 to North Canton. Those are the same amounts Aultman paid a broker for switching those governmental entities to AultCare. Aultman said it later rescinded the payments.
Page 2 of 2 - The judge denied Aultman’s requests for a new trial, the setting aside of the verdicts and attorney fees.
Forchione also overruled Mercy’s requests for pre-judgment interest on the jury’s award and $1.4 million in expert witness fees.
Whether Forchione’s orders have an immediate impact remains to be seen. Aultman plans to appeal the verdict, which could result in Tuesday’s rulings being put on hold.
“A complex and lengthy trial always raises legal issues which are subject to differing and conflicting interpretations,” said Allen Schulman, one of Aultman’s attorneys. “Judge Forchione presided over this difficult case with skill and diligence. Still, we believe that the appellate court is, by design, our opportunity to present the serious legal issues which remain. Therefore, we do intend to appeal this verdict. This single verdict.”
Lee Plakas, an attorney for Mercy, welcomed the rulings.
“The intent of this action was to bring transparency and integrity into this health care market and this region, and the judge’s order will ensure that,” Plakas said.
The judge and jury rendered historic and courageous decisions, and “we feel very confident that the verdict will be upheld,” Plakas said.
Stark County Commissioner Todd Bosley said any money the county gets from Aultman will go back into its self-insurance fund.
He wasn’t surprised by Forchione’s decision and said he pushed the county to hire its own health benefits coordinator a few years ago, rather than rely on a broker.
Alex Zumbar, North Canton’s finance director, said he needed to look into the judge’s ruling.