FACT FINDER: Legal Case Costs Renown $ 15 million

Reported by: Joe Hart
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Updated: 3/26/2013 1:58 pm
RENO, Nev. (KRNV & MyNews4.com) - Five million dollars: That's how much Renown Medical Center is paying out in a recent court settlement.  
That lawsuit, the money spent to settle it, and a fine handed down by the Federal Trade Commission are raising questions about how our area's largest hospital is being run.

The settlement came about after Renown President and CEO Jim Miller spent an entire day on the witness stand during the middle of a bitter court battle.

Sierra Nevada Cardiology sued  Renown claiming the hospital cheated them by changing the terms of the doctors contracts and cutting their pay, after an agreement was in place.

Reno cardiologist Dr. Kosta Arger was one of the doctors who sued.  He's also a former Renown board member.
"It was clear the administration decided at some point to change the contract without informing us," Arger said.
The hospital's board of directors won't tell News 4 why they decided to settle the case in the middle of a four week trial. But it's clear Judge Brent Adams was frustrated with the sworn testimony provided by the Renown president and CEO.  First, questioning him about what the judge called a phony letter from a high ranking Renown administrator.

"You ( Referring to Miller ) don't know who created it,  you don't know who gave the authority for it, you don't know why it was prepared, you don't know to whom it was sent.  What's going on ?"  Judge Adams asked Miller.    The judge then commented on Miller's evasiveness on the stand at another point , saying: "Mr. Miller, not every decision in a hospital is someone else's decision.  Some decisions, somewhere, must be made by you," The judge told Miller.
Several Renown Board members were in the courtroom watching it unfold.

"My view of it was the Renown defense had hoped Mr. Miller would clarify and clinch things for them. And as it turned out it was an embarrassment for them.  And that point they realized they had to throw in the towel," Dr. Arger said.

Sources tell the Fact Finder Team that just two days after Miller's testimony, Renown's board of directors held an emergency meeting on Superbowl Sunday.   And 24-hours after that a settlement was in place, with Renown agreeing to pay the Sierra Nevada Cardiology Group five million dollars. That's money the doctors say Renown guaranteed them when the hospital acquired their practice, but never paid.

But that five million dollars is just the tip of the iceberg in money spent.  The Federal Trade Commission conducted a thorough investigation in conjuction with the Nevada Attorney General's office and found those deals gave Renown 88-percent of the cardiologists in the market.  A monopoly, in violation of the law.

"We did have competition concerns about this deal, which ultimately can harm consumers," said Senior Deputy Attorney General Brian Armstrong.

Following that investigation, Renown reached a settlement with the Nevada Attorney General's Office and agreed to reimburse them for more than $550,000 legal fees.

Multiple sources close to the deal also tell News 4 that Renown, a not-for-profit hospital, paid at least seven million dollars to acquire the area's two cardiology groups, creating an illegal monopoly.  Those actions raised such concern with the F-T-C that it now requires any proposed acquisition, merger or consolidation of Renown Health to be  reported to the F-T-C 30 days prior to a deal being struck.  And that order is in place through the year 2022.  Renown is also required to  provide the same notification to the Nevada Attorney General's Office through 2016.   

And while Renown will not confirm it, our sources tell us the hospital likely paid out at least another three million dollars in legal fees for all of this: one million to fight F-T-C case, and another two million to fend off charges by the cardiologists.

Add in the court settlement and you're talking 15 million dollars all told.  All of that spent after Renown insiders say the Federal Trade Commission warned Renown's president and C-E-O not to move forward with the deal in the first place.  "It was recommended to them that they not do that as there could be potential implications with the F-T-C, monopolization of cardiology care in this community,"  said Dr. Arger.

So, where does that 15 million dollars come from?

The hospital administration would not answer that question. And they wouldn't tell us if it would be passed on to you the consumer, or if employees would be impacted.

What we do know is  it will now be up to the hospital's board of directors to decide If that 15 million dollar bill, and the C-E-O's actions are acceptable, and what if any changes will be made as Renown looks to heal following a painful and expensive legal battle.

News 4 tried to reach Renown President and C-E-O Jim Miller to get his side of the story. We were told he is on vacation and not available to comment.

Coming-up next Wednesday on News 4 at Five:  I'll look deeper into Renown's acquisition of the cardiology groups, and how patients are directly impacted by the hospital's moves.
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Here are the most recent story comments.View All

NVBackroader - 4/2/2013 6:31 PM
0 Votes
I spent 2 years working for the Reverend Jim Jones Miller cult. I only sipped the koolaid. Hopefully the work environment for the survivors will improve. There are a lot of employees there who really care for the patients. I am sure morale is sky high. I would like to see more first hand stories about Jim.

zuraiqui - 3/14/2013 5:57 PM
1 Vote
Since my previous comments dissappeared, I am repeating them: Well, I just watched the news clip. Of course Jim Miller refused to speak on camera, the board of directors met behind closed doors and the news people were sent away. This is how Washoe Medical Center/renown operates. I worked for them for over 20 years and they always put a spin on their story. They haven't had a chance to create a story yet that absolves them from guilt. They forced nurses to unionize years ago. Then, they never seriously negotiated, forcing us to strike THREE times. Many nurses were wrongfully terminated or just harassed so much, they had to quit. Much of the real story was either suppressed or the facts were skewed by Jim Miller and associates to try to keep them appearing honest. Having their own insurance companies gives Washoe Medical Center/renown just that much more control over doctors and the patients in the community. Why do you think the insurance companies were created? Mr Miller is now treating doctors as badly as he has been treating nurses for years. Unfortunately, most nurses don't have the finances that doctors do, otherwise Washoe Medical Center/renown would have been sued successfully many years ago. Why do you think they spent millions of dollars to change their name? It was all the bad press they got while destroying nurses who stood up for patient care. I knew it was only a matter of time before the community would see that money, not patients, is all they care about. Jim Miller, may you and all the rest of Washoe Medical Center/renown management get what you deserve!

zuraiqui - 3/14/2013 10:15 AM
1 Vote
I see my previous comments are gone. Why? We all know if/when miller is terminated, he will take with him millions of dollars in severence pay. Sounds like politics, doesn't it? You are a horrible person who only cares about yourself. You ruin the lives of hundreds of people, and you are rewarded by being overpaid with a secure retirement. If this were a just world, miller would live in a beat up car and scrub toilets for a living.

tryng2servive - 3/11/2013 3:37 PM
1 Vote
Last April, I went to the ER at Renown for a stomach ache...I was there about an hour..they gave me some pills and sent me home..I now have a bill for over $4300 which is in collections...I have been unemployed for three yrs now because I lost my insurance when layed off... I can barely affort food and shelter as it is .. I'll be danged if I am going to help pay for their greed,huge expansion and mismanagement !!

Butterflyangel - 3/10/2013 4:07 PM
1 Vote
Mr Miller as well as the Board of Directors are culpable for the deterioration of a fine, caring institution. The Board needs to go on permanent vacation as well. Hear a common thread, community? Experience has been "eliminated" and replaced by younger, lower waged employees. The experience is gone. Heaven help those who are hospitalized.

Anon md - 3/8/2013 10:22 PM
1 Vote
You may wish to look at all the private physicians Renown and their subsidiary HHP have run out of town. Consider that the next time you need to wait a month for a new patient visit or two weeks for an established patient visit with your physician or when you discover that the only pediatrician in Sparks isn't on HHP's panel (they dropped him with no reason).

Not Surprised - 3/8/2013 3:00 PM
3 Votes
I wonder if the other stations are afraid of losing advertising dollars? You would think a story this big would be on everyone's mind and on everyone's channel since it looks like a big impact on the entire community. 15 million is a lot of money to just write a check.

angeloschild - 3/8/2013 10:32 AM
4 Votes
renomom, I'm not surprised that the media has been mum. I have noticed that anytime a negative story emerges on most news channels and our local newspaper about Renown, the next day it is gone and not heard of again.

angeloschild - 3/8/2013 10:28 AM
4 Votes
Go and get'em. That smug smirking straw man Miller turned what used to be a caring environment and great workplace into a miserable corporate sterility. I worked there for 33 years before my job among others was eliminated in 2005. I guess they had to pay for that name change somehow. I remember that we had to agree with everything management came up with and keep pretending everything was fine even when we could see that the emperor had no clothes. Management didn't want to hear that people were not being properly trained or that procedures were being ignored. We were just supposed to keep smiling and attending happy assemblies where we patted ourselves on the back for the good job we were doing. I hope he will learn what it feels like to be let go. It couldn't happen to a more deserving person.

Paladin - 3/8/2013 9:27 AM
3 Votes
Koolbeanz, Sorry to hear you were one of the thousands of employees he has negatively affected over his much too long tenure at Washoe Med. My wife worked there for 14.5 years and was a salaried exempt. When her salary got high enough they "restructured" and eliminated her position, hiring a couple clerks to try and do most of her job. Guess what happened...in the years to follow everything went to hell in that office. Miller has NO regard for the employees or the patients. It's all about KING JIM. That's why the renown colors are "royal purple" to honor the king.
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