August 19, 2016

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The State

Palmetto Health hospital systems made it clear Friday it will fight the $50 million lawsuit brought against it earlier this week by Sisters of Charity Providence Hospitals Legacy Corp.

“Palmetto Health will vigorously defend the integrity of our organization and our people against this action,” the hospital said in a statement released Friday afternoon.

“We were extremely disappointed when we learned that the Sisters of Charity, who chose to stop providing health care services to the people in our community and sold Providence Hospitals to an out-of-state corporation, have decided to waste valuable resources on a meritless and unfounded legal matter,” the statement said.

In their lawsuit, the Sisters of Charity asserted that Palmetto illegally wrested orthopedic surgeons and staff – some 330 people in all – from Providence’s Moore Orthopedic Clinic on the eve of the Sisters of Charity’s sale of Providence to LifePoint, a national hospital chain, instantly deflating the proposed sales price by millions. Orthopedic surgery practices generate huge revenue streams for hospitals, and orthopedists are among medicine’s highest-paid doctors.

In its Friday statement, Palmetto Health made it clear it wants the public to know that they have done nothing wrong and have done much good for the Columbia area. Each year, they give millions to Columbia area charities –some $50 million in all in the past 18 years, their statement said.

Their statement also criticized the Sisters of Charity for selling Providence to an out-of-state hospital chain in 2015 and pointed out that Palmetto is “locally owned.”

“This is our home: our team members, our physicians and our families live and work here,” the statement said.

“As a not-for-profit, locally owned health care system, we welcome others to join us who recognize the value of local ownership and leadership and our mission to serve, including the orthopedic physicians who chose to leave Providence Hospitals and join Palmetto Health in 2015,” the statement said.

“These physicians help Palmetto Health ensure community members have access to even more complete and comprehensive orthopedic care,” the statement said.

Although the Sisters of Charity lawsuit asks for $50 million, the group is seeking punitive and other damages that could cost Palmetto Health hundreds of millions in all were it to lose the lawsuit.

In its lawsuit, the Sisters of Charity assert that several of Providence Hospital’s own top officials illegally conspired with surgeons at the Moore Clinic and Palmetto Health officials in 2014 and 2015 in enticing Moore Clinic staff to quit Providence and join Palmetto Health. Palmetto Health gained access to confidential Providence insider financial information and improperly used that information to get the Moore Clinic to leave, the lawsuit said.

The lawsuit also said that the acquisition of the Moore Clinic by Palmetto Health has resulted in near monopolistic power that hurts Midlands consumers and limits their choices. The Moore Clinic was Providence’s “most lucrative line of business,” its lawsuit said.

Palmetto Health, which was created years ago by the merger of Baptist Hospital and Richland Memorial, is the largest and most comprehensive hospital system in the Midlands. It has more than $1 billion in annual revenues.

Sisters of Charity legacy group chairman Michael Kapp said Friday any insinuation that the Sisters of Charity Foundation, the Catholic entity that founded Providence and remains in Columbia, doesn’t care about South Carolina is wrong.

The foundation, which will get the proceeds of any damages awarded in the current lawsuit, will give that money back to low-income South Carolinians through the foundation’s various initiatives, including early childhood education and helping fathers and families, Kapp said.

“The Sisters are not abandoning South Carolina at all,” said Kapp. “They made a strategic decision on the hospital sale, but their work continues and is a shining star in the Midlands.”

The Sisters seek a jury trial. Federal Judge Terry Wooten will hear the case.

In the case, the Sisters are represented by attorneys John Moylan and Matthew Richardson of the Wyche firm in Columbia. Palmetto Health is represented by Celeste Tiller Jones of the McNair firm and its chief legal counsel, Howard West.