Quorum Health Resources: Records reveal list of lawsuits
By COLIN MURPHEY
The company in charge of managing Franklin Foundation Hospital has been sued in at least 10 states and sanctioned by the federal government for a wide variety of reasons, including fraud and negligence, resulting in legal settlements for hundreds of millions of dollars.
For over two decades, Quorum Health Resources (QHR), one of the country’s largest hospital management firms, has been in charge of managing Franklin Foundation Hospital, and while they have never been the subject of a lawsuit in St. Mary Parish, they have been repeatedly sued all across the country.
An organization of over 180,000 registered nurses recently contacted members of the FFH board of commissioners notifying them of the allegations made against Quorum. National Nurses United (NNU), the largest union and professional association of nurses in the history of the United States, recently sent a letter to board members detailing their concerns and asking board members to “take the necessary steps to protect your hospital and patients.”
Ranging from allegations of mismanagement to a case in New Mexico where the company failed to identify that a physician was conducting unauthorized, experimental procedures that eventually led to pain and suffering for dozens of patients, Quorum has also lost contracts with hospitals in five other states because of a variety of factors, including allegations of mismanagement.
Problems with Quorum, amongst other management firms, have also led many entities in the health care industry to change some of the ways they do business.
According to an article published in 2012 by the Coastal Business Journal, hospitals in the United States are increasingly adopting provisions similar to legislation that was passed by the federal government to regulate corporate oversight. The Sarbanes-Oxley Act (SOX) was passed largely in response to the Enron and Worldcom corporate scandals but, according to the article, hospitals are enacting the provisions in response to problems with management companies including Quorum.
The CBJ article states, “Many nonprofit firms, including hospitals and health systems have adopted SOX provisions as best practices even though in most states they are not legally bound to comply with these regulations. Public scrutiny, pressure from bond agencies and insurers, and a desire to adopt best practices are moving hospitals in the direction of adopting SOX practices. Numerous articles have been written in major newspapers around the country claiming inadequate provision of charity care, aggressive billing and collection practices that violate their charity obligations and excessive compensation of executives. Some of these concerns have been evidenced by issues with Quorum Health Resources.”
Quorum has been sued in Texas, New Mexico, Tennessee, Massachusetts, Mississippi, Oklahoma, Kentucky, North Carolina, Georgia and Florida, and has been investigated by the federal government, which forced Quorum to pay $85 million in fines in 2001 and Quorum’s parent company to sign a “Corporate Integrity Agreement” in 2014.
The parent company, Community Health Systems, also had to pay $97 million in fines in 2014 to settle allegations the company “submitted false claims for short-stay admissions that should have been billed as outpatient charges,” according to an article published on the Modern Healthcare business publication website.
The government’s actions in 2001 and 2014 were in response to years of investigation by the U.S. Department of Justice into allegations that Quorum and Community Health Systems knowingly and inappropriately billed government health care programs.
Hospitals in Alaska, Maine, Arkansas, Ohio and California have also had issues with Quorum and subsequently severed ties with the company.
In 2009, according to documents filed in federal court in the Western Division for the Southern District of Mississippi, Quorum was the defendant in a case involving Natchez Regional Medical center, which filed for bankruptcy after the CEO and CFO, both Quorum employees, were reportedly accused of systematically misleading the hospital board about the solvency of the hospital’s finances.
The document states, the “case seeks to remedy monumental harm to a fifty-year-old non-profit institution caused by the Quorum defendants’ negligence, breach of fiduciary duties, fraud and other wrongful acts and omissions as well as Quorum’s breach of contract.”
The document further states, “The Quorum defendants failed in their duties and obligations to Natchez Regional by, among other things, failing to report accurate and non-misleading financial information to the board, mismanaging the operations and finances of the hospital and acting with self-interest and disloyalty thereby causing tremendous financial damage to the hospital.”
The case was settled out of court for an undisclosed sum.
According to an article published by the Associated Press in February, 2014, the Hancock Medical Center in Bay St. Louis, Miss., sued QHR claiming, “it lost millions of dollars from its contract with Tennessee-based Quorum Health Resources.”
The article further states, “The lawsuit argues Quorum allowed the hospital and doctors contracted by the hospital to be severely overstaffed, did not collect $8 million for services that were provided and that hospital administrators hired doctors and handed out contracts without permission of the hospital board.”
In an article published in the Albuquerque Journal in 2015, it was reported that QHR was found liable in a case where a health care worker was administering experimental procedures without authorization. According to the article, QHR was notified about the worker’s behavior but failed to take action.
The article states, “One of the country’s biggest hospital management firms breached its duty to prevent the risk of harm to dozens of patients of an Alamogordo hospital who were unwittingly subjected to experimental procedures to alleviate back pain, according to a new (New Mexico) court ruling. The opinion by U.S. Bankruptcy Judge Robert H. Jacobvitz paves the way for the former patients of Dr. Christian Schlicht to seek damages from Quorum Health Resources, which provided top executives for Gerald Champion Regional Medical Center of Alamogordo. The plaintiffs, most of whom live in southern New Mexico, received injections of bone cement or had other back procedures they say left them debilitated and with pain, disability and in some cases, partial paralysis.”
According to information released by QHR, the company was sued in Florida by the federal government on charges they “submitted false claims to the government.”
In Arkansas, a jury awarded $1.3 million to a cardiologist who, according to a 2011 article in the Nashville Post, “accused the leadership of a hospital then managed by Brentwood-based Quorum Health Resources of interfering with his efforts to revamp his department. The attorney for Barry Uretsky says the trouble started about four years (ago) when Quorum brought in Ted Woodrell to run Sparks Hospital.”
According to court documents, in a case in Texas, a jury found QHR, “negligently performed services to the hospital that “increased the risk of injury or harm to a patient of the hospital” and proximately caused injury or harm to a patient “by reliance of The Hospital upon Quorum’s undertaking to perform such services.”
The jury in that case, citing “malice” on the part of QHS, awarded an additional $7.5 million to the plaintiff.
In all of the articles cited by the Banner-Tribune for this story, QHR and/or their attorneys refused to comment.