Physicians move to courtroom
Bill and Hillary Clinton were talking about a revolution in health care the year Barton Memorial Hospital reached out beyond the confines of the Tahoe Basin.
The Barton move into the Carson Valley was an expedition seeking more patients, a reaction to the no-growth reality of the Tahoe Basin.
Taken in that context, the hospital venture was a success as it now serves a growing number of residents there.
But the expansion set in motion events that may bring the hospital and six of its physicians face to face with a judge in Placerville on Sept. 8. On the table, slightly more than $2 million in damages sought by six members of the Carson Valley Medical Group. A counter suit, brought by the hospital in Nevada courts, seeks about $520,000 from the group, money Barton says it is owed for services and support of Carson Medical.
Barton Chief Executive Officer William G. Gordon looks at what happened between 1994 and today, and says the conflict and lawsuit is driven by money and ego.
Dr. Gary Wille, who is one of the six physicians suing Barton, Gordon and 100 John Does, looks at the history of the dispute, and says it is driven by money and a desire by Barton to control the delivery of medical care.
The lawsuit uses terms such as kickbacks, fraud, unfair business practices and racketeering in its pursuit of a cash settlement. It’s not the kind of talk physicians normally engage in over the operating room table.
But these business partners continue to be business partners, admittedly adding to the discomfort of the Barton Memorial Hospital staff and taxing the loyalty of some.
Here is the view from the executive’s chair. “When we went to Gardnerville in 1994, the cornerstone of the President’s State of the Union message was health care reform. So the physicians who were going to be down there said, ‘Why don’t we form a multi-specialty group and that will enable us to see how it will work, and help us deal with these coming changes in medical care.’ “
The Carson Valley Medical Group was formed with more than two dozen shareholder physicians. Gordon said one problem was that surgical specialists dominated, and the group “needed to build the base of primary care doctors.
“They did not want to spend the money to do all that. And they did not want to spend the money to get it all set up and organized and staffed. They asked the hospital to get involved …”
Barton complied, forming a Management Services Organization. “We hired the staff and brought in the equipment so it was a turnkey operation when they started. And then we agreed to recruit family physicians.”
At the time, Gordon said, “everything was working very well.”
However, the Barton board members, from the beginning, took the position “any physician who is one of our medical staff who wants to go into that group will be allowed to do so. Otherwise, we could not spend a lot of money to work with just one group of doctors and not be willing to work with other groups.”
To the contrary, the bylaws adopted by the Carson Valley Medical Group allowed a specialist to veto admittance of a competitor to the unit.
Later, when physicians attempted to join Carson Valley Medical Group, their entry was vetoed by competing specialists, according to Gordon. The denial of access was the genesis of a lawsuit.
Gordon said the hospital “took the position we could not continue to provide the group with this kind of service” in view of its policy. The group fired the hospital’s MSO.
Still, Gordon said, “it was a very friendly separation and we were negotiating at the time … ” over how much money the Carson Valley group owed Barton for its investments. Repayment was a part of the written agreement, Gordon said. He added the goal was to arrive at a payment schedule to ease the burden.
Months passed, and talks lingered, and physicians within the group began to depart. Gordon says their reasons are clear in the depositions: they did not like the new management company; they were upset with the quality of work; and “a lot of them were upset because certain other physicians were not allowed in the group. There was just a lot of frustration on the part of the doctors.”
Efforts to buy out the group of six collapsed, according to Gordon, when auditors found discrepancies between actual assets and those reported during negotiations. Ultimately, the Barton board rejected the acquisition and the physicians rejected arbitration.
In March 1997, the group of six filed a 15-count lawsuit with a monetary demand in excess of $2.1 million. The hospital countered in Nevada courts with a claim for $520,000.
Gordon said judges in both states have commented the group of six has a “weak case” and the Nevada judge suggested, again according to Gordon, that there was no doubt the physicians owe Barton money. The question is, “How much?”
The group of six reportedly would need a settlement in excess of $1.5 million to cover its legal expenses so far, and what it claims it is owed in relocation costs and equipment costs.
The hospital board reportedly is willing to walk away from its legal fees, and its $520,000 investment, in Gordon’s words, “just to make this thing go away.”
Board President John Cefalu said with all this going on, the board is trying to focus on “bringing more awareness to the community about our services and good health.”
Expansion in the Carson Valley is essential, Cefalu said. There will be more health fairs. Negotiations are underway with major employers in the Tahoe Basin in an effort to retain patients.
Talks also are being held to establish an urgent care center within the redevelopment area. And work continues on the establishment of an orthopedic institute.
Next: The physician’s view of the lawsuit.
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