Ex-Missouri hospital owners accused of carrying out elaborate billing scheme

Earlier this month, a judge dismissed part of a lawsuit filed by the former owners of Putnam County Memorial Hospital in Unionville, Mo., against the hospital's board of trustees and Missouri Auditor Nicole Galloway. However, the legal fight is far from over, according to local NPR station KCUR.

In April 2018, the former owners of the 15-bed hospital, Jorge Perez and David Byrns, sued the hospital's trustees and Ms. Galloway. Mr. Perez and Mr. Byrns, who ran a company called Hospital Partners, filed the lawsuit after a 2017 report by Ms. Galloway's office raised concerns about a $90 million billing arrangement Hospital Partners set up with Putnam County Memorial Hospital.

The lawsuit accused the hospital board of trustees of illegally ending Hospital Partners' management contract and alleged that Ms. Galloway overstepped her authority by auditing a privately managed hospital.

A judge dismissed the case against Ms. Galloway on April 15, and the hospital's trustees recently filed a counterclaim against Mr. Perez and Mr. Byrns. The counterclaim alleges the pair used Putnam County Memorial Hospital to run a billing scheme.

"The Board had not authorized billing agreements allegedly entered into by Byrns or Perez with a number of labs who submitted bills on behalf of 'Putnam County Memorial Hospital' or 'Hospital Partners Inc,'" the counterclaim states, according to KCUR.

The board of trustees filed the counterclaim to establish jurisdiction and plans to file a motion to dismiss the claims against them, the trustees' lawyer told KCUR.

The allegations in the counterclaim mirror accusations in other lawsuits pending against Mr. Perez and Mr. Byrns. The litigation ensued after Ms. Galloway released the audit, which included details on how the elaborate billing scheme was allegedly carried out.

"We found that the hospital essentially acted as a shell company for questionable billings that were happening across the country," Ms. Galloway told KCUR earlier this month. "There are now lawsuits by insurance companies, federal investigations, because of the work that we did."

Access the full KCUR article here.

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