ONE OF STEWARD HEALTH CARE SYSTEM’S largest physician groups has filed a fraud and breach of contract suit for as much as $60 million against the for-profit hospital chain, triggering a threatened countersuit and allegations of doctors wrongfully retaining receipts.
Compass Medical Group of East Bridgewater, which has been part of the Steward circle since 2011, filed the suit in Suffolk Superior Court claiming Steward has failed to make mandated incentive payments since 2014 as well as fallen behind on rent and equipment leases. The suit seeks in excess of $20 million but it was filed as a Chapter 93A action, a statute for unfair business practices that could treble a jury award.
“We have worked for over two years to secure this reimbursement and have complied with every request made by Steward to supply needed information and data, and now for the good of our providers and patients, we must take this action,” Compass said in a statement.
But Steward launched a take-no-prisoners counterassault against the 104-provider group and its CEO, charging the group kept in excess of $3.5 million it was not entitled to and refused to forward it to the company.
“Steward has held firmly to its ethical and regulatory obligations by refusing to accede to Compass executives requesting additional payments beyond those that are contractually obligated,” said Dr. Sanjay Shetty, president of Steward Medical Group, which is the defendant in the suit. “Compass executives, including CEO Jamie Barber, have refused to participate in any meaningful or lawful resolution of these concerns, forcing us to take legal actions to protect our patients and the physicians who still practice under the Compass corporation.”
According to the Compass suit, Steward began withholding the mandated incentive payments in 2013, claiming the bonuses would violate “fraud and abuse laws” by exceeding fair market value for services. Compass officials said they disputed the claim and asked for a review, which Steward promised in 2015 but never delivered.
In addition, Compass claims, Steward also began charging administrative fees for processing Tufts Medicare Advantage claims, a unilateral decision and violation of the contract. Also, the suit says, Steward is in arrears for at least $1.4 million in rent and equipment leases, but Steward insisted it was owed the money.
In total, Compass says its damages exceed $20 million.
In a press release, Steward denied the allegations and said Compass is the one engaging in “deceptive financial practices” by hiring “non-physician providers” and billing the same rate as doctors. Steward claimed it tried to negotiate a settlement with Compass, including bringing in the Department of Justice, but Compass officials “walked away” from the talks.
Barber, the Compass CEO, said the threatened Steward suit and statements are an “alternate reality” meant to muddy the waters and deflect responsibility.
“Steward Health Care’s response to our lawsuit reflects an alternate reality that bears no resemblance to any actual event, and we categorically reject all of it,” he said in a statement. “We look forward to justice being served through our legal system and will save our response to Steward’s baseless allegations for that venue.”
