Ohio doctors sue over debt repayment responsibility

Physicians say they are unfairly being asked to pay back part of the group's debt. Hospital organization says the lawsuit is without merit.

By Tanya Albert, AMNews staff. Nov. 5, 2001.

Nearly two dozen Toledo, Ohio, doctors are suing their physician hospital organization, accusing the group of unjustly trying to make them help pay back a portion of the organization's debt.

The physicians, part of Mercy Health System Physician Hospital Organization, say the group is asking them to pay back $4.2 million of $22 million the physician hospital organization has lost over the past couple of years.

The doctors are asking the court to stop the organization from collecting any of the debt from them and to award the doctors punitive damages of at least $25,000 each.

Physicians say they first heard of the change from their original agreement with the PHO through a letter that informed them that the agreement had been "revised."

The new agreement required doctors to take a 2.41% compensation cut for a portion of the managed care business that the physician hospital organization contracts.

If a physician were to leave the group, he or she would be required to pay back a lump sum that covered his or her estimated portion of the debt, according to the lawsuit filed in Lucas County (Ohio) Common Pleas Court. The letter sent to the physicians does not outline a formula to calculate the dollar amount a physician would owe if he or she left the group, stating only that physicians "will be required to contribute their proportionate share of the debt."

"I don't think I should be held responsible for someone else's mismanagement," said Toledo cardiologist William P. Schafer, MD, one of 23 doctors who filed the lawsuit. "The hospital lost the money, not me. I was told to take it [the agreement] or leave it." [...]