Methodist Le Bonheur Healthcare and West Clinic

As a mission-driven, not-for-profit, faith-based health system serving the Memphis community for over 100 years, Methodist Le Bonheur Healthcare (MLH) provides care of the highest quality to anyone who comes through our doors, regardless of their ability to pay.

Building on that legacy, in 2011, MLH entered into a seven-year affiliation with The West Clinic oncology practice group to perform clinical cancer care, management services, academic training and research services. The resulting West Cancer Center not only succeeded in achieving superior cancer care but expanded access to services and eased cancer treatment disparities in the mid-south. Such arrangements are common; many health care systems around the country have entered into similar agreements with medical specialty practices.

MLH compensated West Clinic for the clinical services its physicians provided and for managing the hospital’s oncology program, according to business terms developed with the advice of respected outside experts. In 2017, however, a former President of one of MLH’s hospitals and a former executive dean at the University of Tennessee Health Science Center sued MLH and two former hospital executives in federal court, claiming that the payments to the doctors exceeded fair market value for their services. The suit further claimed the payments were intended to induce the doctors to refer more patients to the hospital, in violation of federal laws related to Medicare and Medicaid reimbursements.

On October 8, 2021, the Justice Department filed a motion to intervene in the qui tam lawsuit, despite previously declining to intervene in September 2019. The court granted the motion, and the government will now take over the case from the original plaintiffs and press the case forward.

As we said when the litigation began: We uphold the highest standards and comply with all legal and regulatory requirements. MLH entered into the arrangement to elevate cancer care in its community. MLH’s professional agreements with West Clinic provided needed medical services for cancer patients, and our payments for those services were appropriate.

We cooperated fully with the Justice Department’s investigation of the allegations in the suit as it was deciding whether to intervene in 2018 and 2019. We are confident that a balanced and accurate assessment of our affiliation with West Clinic will present an entirely different picture than the one alleged in the suit and now led by the Justice Department, which is why we believe the claims are without merit and why we will vigorously defend ourselves.

We will respond in detail to the allegations during the course of the legal process. But in advance of that, in light of our role in the community as a major health care provider and employer, we believe it is appropriate to offer some additional comments about the allegations. While we provide general responses to the main allegations in the suit elsewhere on this site [see “Allegations vs. Facts”] we want to underscore a few key points to provide important context about the case and our affiliation with West Clinic:

• This case has nothing to do with patient care; there are no allegations about the cancer care received by any patient.
• Despite the litany of allegations in the complaint, this case boils down to a dispute over the appropriate level of payments MLH made to West Clinic for the services provided by its physicians. The lawsuit amounts to after-the-fact second guessing of the compensation structure that respected outside experts representing MLH and West Clinic determined reflected fair market value for such services.
• There was no attempt by MLH to generate more patient referrals through excessive physician compensation – the payments for various services were agreed to after extensive negotiations based on the input and advice of outside experts.
• The lawsuit seeks to portray customary and legal business arrangements between MLH and West Clinic physicians as illegal activities, in effect penalizing the hospital for forging a successful partnership with West Clinic that did exactly what it was intended to do: create an integrated cancer diagnosis, treatment and surgical service that improved cancer care and led to better patient outcomes for the Memphis community.
• Among other outcomes, the partnership:
  • Resulted in improved long-term breast, lung, uterine, and colon cancer survival outcomes.
  • Increased the number of patients screened for clinical trials and receiving genetic and molecular testing and palliative and hospice care.
  • Reduced cancer-related hospital admissions, re-admissions, and emergency room visits and admissions; reduced surgical-site infections, central-line infections, and post-op infection rates.
  • Met or exceeded national benchmarks for medical oncology, gynecologic oncology, transplants, and radiation oncology.
• The success of the affiliation also led to significant investments in health care for the Memphis community, including $138 million for uncompensated care and a Stem Cell Transplant Program that by 2018 had increased the number of patients treated to more than 100 a year from 10-12 before the affiliation. The program also enabled patients to be treated in Memphis and ranked in the top 10% for survival rates in the nation.
• Our investments also included hiring more full-time employees who have served as patient navigators and helped reduce barriers to cancer care, as well as nutritionists, geneticists, and spiritual counselors.

We are proud of what we accomplished through our affiliation with West Clinic. We set ambitious goals when we entered the partnership and met them. We will continue to enhance our cancer care services, as we pursue our mission to serve our patients and our community and provide them with the best health care possible.