Tri-City district wants suit postponed

$583,000 in doctor's debt at core of case

By Michael Burge
San Diego Union-Tribune
January 23, 2009

The Tri-City Healthcare District has asked a San Diego Superior Court judge to delay a decision on a lawsuit that the district filed against a surgeon it recruited who owes them money, but who claims he was recruited on false pretenses.

Tri-City sought out Dr. Thomas d'Amato in 2002, promising there were enough patients in the public hospital district, which covers most of Oceanside, Vista and Carlsbad, to support a third cardiothoracic surgeon.  However, two years after he signed the agreement and joined the practice of another surgeon, d'Amato took a leave of absence, saying there weren't enough patients and the recruitment violated federal law. ...D'Amato, a former Navy surgeon, has returned to his home state of Pennsylvania and is practicing on a contract basis.

... the district's new law firm filed a letter in Superior Court saying, “We no longer seek a default judgment against defendant.”  The letter from Burke, Williams & Sorensen says only that the district is “pursuing a resolution with the defendant.”

[Maura Larkins' comment: As well they should.]

HOSPITALS AND BRIBES

...One of the issues in the d'Amato lawsuit was the surgeon's contention that the relocation agreement violated a federal law that prohibits one doctor from benefiting directly from the recruitment of another physician.

The law was pivotal in 2002 when the the U.S. Attorney's Office in San Diego prosecuted Tenet Healthcare Corp. and Alvarado Hospital, contending the hospital and its chief executive signed relocation agreements with doctors that violated a federal anti-kickback statute. 

The law makes it illegal for a hospital to pay any bribe, kickback or compensation to established physicians through contracts with other doctors, with the aim of attracting patients to the hospital.  Two trials on the charges at Alvarado, which involved more than 100 such agreements, ended in hung juries. Tenet agreed in May 2006 to pay $21 million and sell the San Diego hospital to settle the outstanding criminal and civil charges.

According to the agreement between d'Amato and Tri-City, the district promised to lend d'Amato as much as $750,000 over 24 months to help him start a medical practice.  The agreement called for d'Amato to work for Dr. Theodore Folkerth, whom d'Amato paid $410,526 between 2002 and 2004, court documents show, plus $12,000 in monthly expenses.  In July 2005, d'Amato gave up his practice, leaving $583,333 of the Tri-City loan unpaid. In May 2007, the district sued him to get it. 

The court rejected d'Amato's legal argument on procedural grounds, ruling he couldn't represent his corporation and needed an attorney. D'Amato said he couldn't afford one.

...[The] board of directors placed eight top administrators, including Chief Executive Arthur Gonzalez, on paid leave Dec. 18...Board members Larry Schallock and Ron Mitchell were absent from the Dec. 18 meeting, and Dr. Madeline Rodriguez arrived late, after delivering a baby.