Shannon Health System Divorce Continues

After writing an article in our local paper about the now cancelled merger between Shannon Medical Center and Triad Hospitals I received numerous phone calls. One of those informed me of a whistle blower suit brought by employees concerned about "billing irregularities". The anonymous caller delivered a packet of information with "proof" of the lawsuit.

Some of the documents looked like compliance committee minutes from the large multi-specialty clinic owned by the system. While the evidence supported an investigation, it had no final determination. Deep Throat said he would call back with a case number but that hasn't happened.

After the hospital merger failed, Shannon Health System publicly revealed their intent to spin off this physician group. Doctors in the clinic could buy out the assets and accounts receivable from the hospital or they could take a slot in a new Shannon division, an umbrella with essentially a series of solo practices. For the first year the system would guarantee their last year's income.

Despite efforts to repair the rift between the hospital and the clinic, Shannon Trustees pressed for the divorce. The clinic offered mediation. The Trust declined. I wondered "What caused the relationship to fracture so badly?" Why would they be so intent on breaking up the clinic as all the current doctors could choose the new organization leaving a shell for the system to close down? Is about control or pay back, or both?

I think the Trust is upset over the qui tam lawsuit for over billing. Recently a Shannon physician suggested that Houston based law firm Vinson & Elkins is waiting for the spin off to bring suit in this case. The federal government frequently contracts out these whistle blower suits instead of having Justice department attorneys do the work. My anonymous phone caller indicated Vinson & Elkins has this case.

One reason for the Trust to spin off the clinic is to jettison liability for clinic over billing, before it falls on their doorstep. Did Shannon Health System not conduct proper due diligence when acquiring the clinic in 1995? How does liability transfer back to the now much different Shannon Clinic? Physicians taking the independent exit (vs. Shannon Trust handcuffs) are a much different crew than those committing over billing sins over a decade ago.

No matter the answers, it looks like a bad divorce. One party may get hit by a two by four after the split. The Trust is planning not to be it. What happens if every doctor walks away from the corporate entity known as the Shannon Clinic? They could join the new Shannon doctor group of flee to friendlier environs (across town or elsewhere). If Sam Feazell's hospital didn't have its hands tied waiting for Triad Hospitals to be acquired by Community Health Systems, he could pull a fast one. Then the Trust would be the bag holder.