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Economy and Business

Ohio Supreme Court sides with Mercy over Aultman in the battle of the Canton hospitals
Mercy won $6.1 million after suing Aultman in 2007 over unfair business practices

Kabir Bhatia
In The Region:
The state Supreme Court ruled yesterday in an unfair business practices case between two Stark County hospitals. WKSU’s Kabir Bhatia reports on the dispute between Mercy Medical Center and Aultman Health Foundation.
Mercy prevails in Canton hospital trial

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Mercy sued Aultman Health Foundation in 2007 over payments that Aultman made to independent brokers for switching patients’ health insurance to Aultman subsidiaries, AultCare and McKinley Life. The brokers would make up to $200 per person in what was termed a “conversion-support payment” program.

Two lower courts upheld the decision in Mercy’s favor, but Aultman appealed to the Ohio Supreme Court, saying the payments were no different than other commissions paid in the health-care industry. The Ohio Chamber of Commerce supported the appeal, saying the award to Mercy “creates new liability … for common competitive practices.” 

Aultman also has said state and federal regulators have taken no action over the payment program.

But Lee Plakas, lead attorney for Mercy, doesn’t see it that way.

“These millions of dollars of payments were camouflaged under the entries of ‘research and development’ and, before that, ‘supplies.’ So that tells you that, if it was business as usual, then there should be no reason for calling millions of dollars of payments, rather than ‘payments’ or ‘commissions,’ they were calling them ‘pens’ and ‘papers’ and ‘paperclips’ under the section of ‘supplies’.”

The court ruled unanimously in favor of Mercy and awarded it $6.1 million. An attorney for Aultman told the Canton Repository that the hospital is exploring its legal remedies after the decision.
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