INDIA HERALD • WEDNESDAY, APRIL 22, 2015 • PAGE 7
Victoria county hospital settles lawsuit, agrees to pay $23 million Citizens Medical Center, three cardiologists and the U.S. Attorney General’s ofﬁce agreed to settle a lawsuit Monday, now ﬁve years in the making, for $23.55 million, The Victoria Advocate reported. The county-owned hospital agreed to pay the federal government $21.75 million, of which the U.S. will then pay $5.98 million to the three doctors - Dakshesh-Kumar Parikh, Harish Chandna and Ajay Gaalla, according to the published report The hospital agreed to also pay the doctors’ attorneys $1.8 million within 10 days. With the current lawsuit and one settled in 2012, the doctors will have netted almost $14 million from the hospital. The cardiologists’ attorney said his clients declined to comment at this time. Although Citizens Medical Center is a county-owned hospital and does receive public funds, it does not collect property taxes. The funds to pay for the settlement will be transferred from hospital revenues and investments. Kevin Cullen, the county’s attorney, said the settlement was not based on any formula, but rather on negotiations and government demands. “We went back and forth in negotiations and reached that number,” Cullen said. The agreement does not outline what the U.S. Department of Justice will do with its portion of the settlement, totaling $15.76 million, related to the alleged violation of the Ethics in Patient Referrals Act, commonly known as Stark Law, in the hospital’s emergency room and chest pain center from as early as 2005 under former CEO David Brown. “I do believe this was in the best interest of the hospital,” he said. Cullen estimated it would have cost several million dollars to ﬁght the lawsuit, and if there was a trial, both sides would have appealed, thus prolonging the process while racking up hundreds of thousands in attorneys fees, he said. “The risk of a loss would jeopardize the ﬁnancial stability of the hospital,” Cullen said. “That’s a risk we cannot take.” The decision was a studied business decision that involved advice of the lawyers at King & Spalding in Houston, the board of directors, administrators and himself, Cullen said. The hospital board met in a special meeting Monday morning to approve the terms. The Victoria County Commissioners Court approved the settlement during its Monday morning meeting. “The hospital does not take paying this money lightly,” Cullen said. “When you weighed the costs and the risks, the settlement was the right business decision.”
County Judge Ben Zeller called the amount “staggering.” Considering similar cases have been settled in the hundreds of millions, Zeller said Monday’s decision will ensure the hospital stays open and operational. In July 2014, Community Health Systems, the parent of DeTar Healthcare System, settled seven whistleblower False Claims Act lawsuits on behalf of all its hospitals for $98.15 million. Citizens board chairman Donald Day said negotiations for the cardiologists’ lawsuit have been slow. The doctors claimed Citizens Medical Center violated the False Claims Act, the AntiKickback Act and the Stark Act by paying bonuses and abovemarket salaries to emergency room physicians in exchange
for patient referrals, among other things, according to court documents. There were 19 physicians mentioned by name in the settlement, but the allegations are that the hospital violated the acts as a result of a portion of the payments made to these doctors. The hospital did not admit any wrongdoing, and there was no ﬁnding that a patient received unnecessary or improper care. Brown said he’s glad the lawsuit is over and the cardiologists’ claims were unsubstantiated. “The irony of the whole thing is that none of the things they are criticizing us for were per se illegal; they were just good business: making relationships with our physicians that beneﬁt-
ed care to our patients,” Brown said. “The government thinks everybody is a crook, so they don’t want you to have beneﬁcial working relationships.” The settlement referenced possible criminal action, but Cullen said to his knowledge, “there is no criminal investigation at all” and “there’s not going to be any.” The settlement will not affect current operations or credit ratings and is not being paid for by taxpayers, the county judge said. “It could have been the entire reserve fund,” Zeller said. “I agree with the hospital board that it is in the best interest to put this threat behind us.” The settlement marks an end to a ﬁve-year legal battle over two lawsuits. The initial lawsuit was ﬁled in 2010 and settled in
2012 for $8 million to the same three cardiologists. In the case of the 2012 settlement, the doctors claimed racketeering, conspiracy and discrimination after their privileges at the hospital were revoked. The hospital settled on the discrimination claim The three doctors ﬁled the second lawsuit that was settled Monday in 2010, but it was sealed until late February 2013. During the 10-year period in question, the hospital provided more than $400 million in uncompensated healthcare to patients, according to a news release. We just thought the best thing would be to settle this, get it behind us and move on,” said Day, the hospital board chairman.