Allegation: Methodist Le Bonheur Healthcare (MLH) intentionally entered into the arrangement with West Clinic to “buy referrals from them”.
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. 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 respected outside experts. These allegations amount to after-the-fact second guessing of the compensation structure that these experts determined reflected fair market value for such services.
Allegation: Methodist paid West large amounts to induce West to refer patients to Methodist.
The affiliation’s compensation structure was developed by reputable experts and reflected fair market value. Methodist received all the services it paid for under its affiliation agreements with West.
Allegation: MLH overpaid West Clinic physicians in several ways, including inflating the standard metric used to set compensation, using funds from a drug discount program and paying for management services that were never performed.
First, the compensation structure under the affiliation with West Clinic was well within acceptable parameters and developed with the advice of outside experts.
Second, as a health system that provides extensive care to underserved populations, MLH is eligible for a federal drug discount program that enables MLH to provide more treatment to more needy patients, which is how MLH has always utilized and continues to utilize the program. The savings from the federal 340B Drug Discount Program enabled the hospital to increase spending on oncology care for indigent and uninsured patients from $3.2 million in 2011 when the affiliation began to $20.3 million by 2017. The savings also enabled the funding to expand cancer care services.
Finally, MLH received the services due under the management services agreement. The proof of that is well documented, significantly increased care and improved outcomes.
Allegation: West executives admitted in interviews after settling the case on behalf of West Clinic that Methodist paid them for management services they did not perform.
West, in public court filings, has vehemently denied this assertion; the allegation is also rebutted by interview notes and recorded interviews.
Allegation: Methodist paid West to perform inpatient management services at six hospitals but West only performed such services at two hospitals.
West’s work impacted all Methodist facilities and it was paid fair market value for its services. Methodist’s oncology services have historically been consolidated at two hospitals because of their cancer expertise and for resource efficiency. Not surprisingly, the majority of West’s services were concentrated at these hospitals.
Allegation: If the Department of Justice has decided to intervene now, there must be truth to the lawsuit’s claims.
Our professional agreements with West Clinic provided needed medical services for cancer patients and our payments for those services were appropriate. Nothing about that has changed since the Justice Department’s initial decision not to intervene in 2019 and this matter became public. 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 allegations are without merit and why we will vigorously defend ourselves.
Allegation: MLH profited with over $1.5 billion in increased revenues from business generated by West Clinic physicians suggesting the exclusive arrangement to secure referrals achieved its goal.
We set ambitious treatment goals when we entered the partnership and met them: The West Cancer Center not only succeeded in achieving superior cancer care, but also expanded access to services and eased cancer treatment disparities in the mid-south.
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.