UPMC seeks $100M in civil suit over alleged pension error

Pittsburgh-based UPMC and UPMC Altoona (Pa.) are moving forward with a $100 million civil lawsuit accusing a financial services company of underestimating the health system's pension liability, the Altoona Mirror reports.

The UPMC lawsuit is against CBIZ, its affiliates and a retired employee, Jon Ketzner of Cumberland, Md. CBIZ sought to dismiss the case, but U.S. District Judge Kim R. Gibson with the Western District of Pennsylvania earlier this month refused to do so, according to the Altoona Mirror. The trial is scheduled to begin May 4 and last four to six weeks.

At issue in the lawsuit is the pension liability that UPMC was accepting when Altoona (Pa.) Regional Health System, now UPMC Altoona, merged with UPMC in 2013. 

In the lawsuit, UPMC claims that Mr. Ketzner — who was an employee of CBIZ and prepared annual financial reports for the facility in Altoona — underestimated the amount of pension obligation the hospital had through its pension funds for union and nonunion employees, the Altoona Mirror reports. 

UPMC said the pension funds were ultimately incorporated into its overall company pension program, but that led to financial suffering. The health system also claims underreporting of the pension liability didn't allow the Altoona hospital the opportunity to seek help through government insurance agency Pension Benefit Guaranty Corp. 

CBIZ sought to dismiss the case, arguing that UPMC's claims were "speculative" and that the health system did not suffer damages because of Mr. Ketzner's estimates, according to the Altoona Mirror

The newspaper reports that the financial services company also claimed the Altoona hospital had enough money to meet its increased funding obligations.

UPMC seeks more than $100 million in damages.

Read the full report here

 

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