ACHP vs. EPMG

According to a report in the San Francisco Business Times, Catholic Healthcare West (CHW) has been sued for the second time in six months over its emergency department management, this time in an action alleging federal racketeering and Medicaid fraud.

The latest case is a $4.8 million suit, filed in San Francisco February 9 on behalf of the former head of emergency room services for Catholic's St. Joseph's Hospital in Phoenix, AZ. The doctor, James Severance, claims he was ousted unfairly when St. Joseph's brought in San Francisco-based Emergency Physicians Medical Group to manage the $1.6 million emergency department. The suit further alleges that because CHW owns the administrative arm of that medical group, it is diverting part of doctors' Medicaid payments into the hospitals' pockets-an illegal act.

At issue is the hospital system's recent purchase of the medical group's administration, which has now become a for-profit subsidiary of the San Francisco nonprofit, under the name Meritin Physician Management Co., Inc. CHW spokeswoman Debbie Cantu said 10 of its 48 hospitals have contracted with Meritin to run their emergency rooms so far, all of their own volition, and that no doctors have taken the 28 percent pay cuts that local doctors had alleged. Cantu also said the acquisition has been studied by several state agencies, who found no illegality or conflicts of interest.

Doctors had cried foul over the purchase last August, filing suit in San Francisco for kickbacks and saying the hospital, largely run by nuns, was just greedy; now, the case is raising the political hot button of Medicaid fraud as well.