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HOSPITALS: Law professor sees mixed bag in hospital suit

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OCEANSIDE -- An expert in health care law said Friday that Tri-City Medical Center's suit against Scripps Health Inc. could have merit in one aspect if Tri-City can back up its claims that Scripps is forcing patients to travel to distant facilities for treatment.

"If, in fact, Scripps is telling their Medicare or Medi-Cal patients, for example, that 'you can only go to Scripps Clinic or a Scripps emergency department,' that's very questionable," said Brian Liang, a Harvard-educated law professor who teaches at the California Western School of Law in downtown San Diego.

Scripps officials have denied they're ordering patients to go anywhere.

The suit was filed Tuesday in Vista Superior Court, before being moved to federal court Wednesday. It accuses Scripps of endangering North County patients by forcing them to travel to Scripps hospitals in Encinitas, La Jolla and elsewhere for care. The suit also claims that Scripps' referrals constitute unfair business practices.

Liang said he saw no traction in another aspect of the lawsuit in which Tri-City alleges Scripps is illegally referring patients to Scripps hospitals.

Friction between the two health care entities began in 2008, when Scripps purchased the Sharp Mission Park Medical Group, whose offices are near Tri-City.

In early January, 64 Sharp Mission Park doctors -- who, according to the lawsuit, treat about 60,000 patients in Vista, Carlsbad and Oceanside -- began using Scripps hospitals, rather than Tri-City, for surgeries and other procedures.

The number of surgeries performed at Tri-City subsequently dropped 30 percent and hospital administrators have said the trend has helped contribute to an $8 million loss for the current fiscal year.

Scripps has denied repeatedly that it forces patients to receive care at any specific facility or that its referral practices don't square with complex health care law.

Liang said the law that governs physician referrals for Medicare and Medicaid patients clearly allows patient transfers and referrals within a health care system such as Scripps.

Likewise, he said, contracts between hospitals and physician groups are common in the health care industry.

"This contract issue, I think, is a nonstarter for Tri-City," Liang said.

However, he said he found claims of steering patients more persuasive, especially where it applies to emergencies.

In an emergency, Liang said, paramedics are obligated to take patients to the nearest hospital or trauma center, depending on the severity of their injuries. A receiving hospital must diagnose each patient's illness and also must stabilize each patient.

Tri-City, in its lawsuit, alleges that Scripps diverts emergency patients, making them drive 20 miles south to Scripps Memorial Hospital Encinitas for treatment. Likewise, Tri-City alleges that, in some cases, Scripps forces transfers of patients who first arrive in the Tri-City Emergency Department. In one case, the lawsuit claims, a patient died after being transferred.

Liang, who specializes in health care law and policy and has written extensively about subjects such as health care access and prescription oversight, said the law is clear on patient transfers: A transferring doctor is responsible to make sure that any patient they send to another hospital is stable.

"If, in fact, Tri-City is transferring patients that they do not think are stable, then they are in violation, and the feds will crack down on them," Liang said.

However, he added that if Scripps is somehow intercepting patients at some point in the 911 emergency process or forcing emergency patients who arrive at a doctor's office to go to a Scripps hospital 20 miles away, then that could be illegal. Tri-City officials have said, in a press conference and in a telephone interview, that paramedics or other health care workers will sometimes call referral numbers on the back of a patient's health care card and be told to send patients to Scripps, even though Tri-City is closer.

Oceanside paramedic Capt. Shawn Fernandes said he has not heard of that practice.

"We take patients to the nearest hospital no matter what," Fernandes said. "If we start getting into the insurance game, that's not our business. Our business is the patient's welfare."

Liang said that part of Tri-City's case "could have legs, but only if they (the hospital) can prove it,"

Scripps, through its medical chief medical officer, has said repeatedly that it does not interfere with the normal emergency process and that Scripps doctors have sent 20 to 30 percent of their patients in coastal North County to Tri-City when their injuries require immediate treatment.

Don Stanziano, a spokesman for Scripps, said Friday that the company has scoured its records and cannot find any details on the patient that Tri-City claims died after being transferred to Scripps Memorial Hospital Encinitas.

"We don't know what this is about, it's really baffling," Stanziano said.

In a previous interview, Dr. Brent Eastman, Scripps' chief medical officer, said he would "love the chance to refute" Tri-City's claims.

"I'm aware of multiple cases where our patients have chosen to go to Tri-City," Eastman said.

Tri-City attorney Daniel Callahan said he is equally confident that he can prove his allegations against Scripps.

"I'd say we are very confident," Callahan said.

Call staff writer Paul Sisson at 760-901-4087 or psisson@nctimes.com.

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