Aultman Health Foundation must pay Mercy Medical Center $6,148,000 in damages for unfair business practices, a Stark County jury has ruled.
After three days of deliberation, the majority of the eight-member panel sided with Mercy on Tuesday in the high-profile lawsuit, which has been called the biggest civil case ever in Stark County Common Pleas Court.
Seven of the eight jurors found Aultman engaged in a ”pattern of corrupt activity” by influencing health insurance brokers with money. The panel sided with Aultman in five other claims.
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The compensatory damages are considerably less than the $110 million Mercy had been seeking from its cross-town rival for allegations that Aultman bribed brokers starting in 1997 to steal patients.
But Mercy attorney Lee Plakas said the jury verdict is substantial and ”sends a clear message to Aultman that this unethical activity has to stop.”
”We believe that the playing field has been substantially leveled,” said Thomas Cecconi, Mercy’s president and chief executive. ” . . . It will change the business that’s conducted.”
Aultman attorney Allen Schulman said the hospital intends to file a motion asking Judge Frank Forchione to overturn the lone verdict in Mercy’s favor.
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Overall, however, Schulman declared the jurors’ findings a victory for Aultman.
”We believe the jury found very clearly none of the things we have done over the last 13 years have done anything to stifle competition,” he said.
Much of the case centered on confidential payments Aultman gave to select brokers to switch clients from other health insurers to Aultman’s AultCare. The brokers could earn as much as $200 per new person enrolled in AultCare, in addition to regular commission.
According to evidence presented during the two-month-long trial, the payments by for-profit AultCare were funded with money from its nonprofit parent company, Aultman Health Foundation.
Mercy alleged that those extra payments were part of a scheme to get more employer groups to switch to AultCare, which led to more patients going to Aultman Hospital.
Aultman Hospital is AultCare’s only in-network hospital in Canton. Under most health insurance plans, patients must go to in-network facilities to pay the lowest charges.
Plakas said the ruling sends the message that Aultman’s charitable funds can’t be used to secretly pay brokers anymore.
Although the jury cannot order Aultman to stop its business practices, ”Aultman should take that message and stop this unethical conduct,” he said.
Aultman plans to continue business as usual and won’t make any changes as a result of the verdict, President and Chief Executive Edward Roth said.
Schulman said the verdict confirms Aultman’s stance that its strategy is to provide high-quality, low-cost care to the community.
Counterclaims rejected
Aultman had been seeking $1,000 each in punitive and compensatory damages as well as attorneys’ fees in a countersuit that accused Mercy of spreading ”libelous falsehoods.”
The jury sided with Mercy on the counterclaims.
Roth noted that both sides have spent ”considerable resources” after Mercy initiated the case.
Neither side would say how much they have spent on the case, but both agreed it likely totalled in the millions of dollars.
”Those funds are going to be lost to the community forever because they were spent on this trial,” Roth said.
Mercy pursued the case to provide transparency to area health-care consumers about Aultman’s business practices, Plakas said.
Employers typically rely on insurance brokers to help them shop for and select the best health coverage for workers and their families.
”Now our community knows what it always had the right to know,” he said.
Mercy intends to seek attorneys’ fees from Aultman — a move that is permitted by the jury’s verdict, Plakas said.
The two-month trial drew intense interest from the Stark County community, as well as the local health-care industry.
Aultman Health Foundation is Stark County’s largest private employer, with about 5,000 employees. Mercy Medical Center is the county’s third-largest employer, with about 2,500 employees.
Cheryl Powell is a health reporter for The Akron Beacon Journal, the daily newspaper in Akron and a syndication partner of MedCity News.
