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Health-Care Provider Sues Rival for "Anti-Trust" Marketing

Aultman Health Foundation is again in the news for its’ ”outside the box” marketing efforts.

This time, Mercy Medical Center of Canton filed suit in Stark County Common Pleas Court in Canton, accusing Aultman of paying insurance brokers to garner a larger share of the health-care services market. Mercy contends it had to raise its prices for coverage and services due to lost business to Aultman and its subsidiaries.

Mercy’s suit states, “Aultman Health Foundation and its subsidiaries – Aultcare Corp., Aultman Hospital and McKinley Life Insurance Co. -- have set out to destroy competition and achieve monopoly power in Stark, Tuscarawas, Wayne, Carroll and Holmes counties,” said TimesReporter.com of New Philadelphia and Dover, Ohio.

Like in the past, Aultman defended its business practices.

“Aultman takes very seriously our commitment to making high-quality, cost-effective health care accessible and affordable to Canton-area patients,” said spokesperson Leslee Dennis.

Aultman and its subsidiaries faced similar complaints in the past, once settling with an accuser on the eve of a trial. Aultman has admitted to financing brokers’ marketing efforts but claims the practice is legal.

However, Mercy said Aultman contracted with nine health care insurance brokerage firms and paid millions in commissions to convince corporate clients to join or remain with Aultman-sponsored plans. The Mercy suit also alleges Aultman provided lavish vacations and golf excursions to brokers.

Mercy Claims Aultman Didn’t “Play Fair” and its Profits are Proof

“Rather than compete in the marketplace on the merits of the hospital services that they provide, Aultman has resorted to bribery,” Mercy’s filing stated.

According to details in TimesReporter.com, Mercy’s allegations support its complaint:

AultCare’s enrollee numbers increased 233 percent from 1999 to 2004. From 1999 to 2004, AultCare increased its enrollee companies by 87 percent. McKinley Life, the complaint alleges, increased enrollees from 500 in 1999 to 2,220 in 2004. To that end, Aultman Hospital’s patient admissions rose dramatically since 1996, fueling a revenue spike from $195 million in 1998 to $346.4 million in 2004, the TimesReporter.com reported.

Mercy alleges in its suit Aultman abused its tax-exempt status, spending public donations for personal profit.

“The claims are whether medical and insurance consumers are entitled to choices and transparency in the market,” said Lee E. Plakas, Mercy’s attorney, “and whether a tax-free foundation can secretly spend millions of charitable dollars to attempt to monopolize the market.”

Mercy seeks compensatory and punitive damages for seven counts, including restraint of trade or commerce, conspiracy to monopolize and exclusive dealing -- all in violation of the state Valentine Anti-Trust Act; tortuous interference with business relations, violation of the Deceptive Trade Practices Act, unfair competition and civil conspiracy.

Aultman’s track record isn’t without blemish. In 2006 the company faced a lawsuit by Hometown Health Plan, stating Aultman conspired to create a health plan and hospital services monopoly. That suit is pending. In 2003 Professional Claims Management sued Aultman for $30 million, claiming similar broker payments destroyed its business. The day before trial, the suit was settled when Aultman bought PCM.

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