West Virginia Record

Friday, September 20, 2019

Lawsuit involving R&V Associates, Weirton Medical Center moved to West Virginia

Federal Court

By Kyla Asbury | Sep 5, 2019


WHEELING — Another lawsuit involving R&V Associates and Weirton Medical Center was filed in federal court — this one in Pennsylvania before it was transferred to West Virginia.

The lawsuit, originally filed in the Court of Common Pleas of Allegheny County, was removed to U.S. District Court for the Western District of Pennsylvania at Pittsburgh in July. It was transferred to U.S. District Court for the Northern District of West Virginia at Wheeling in August.

Federal Judge Arthur J. Schwab noted that transferring the case to West Virginia federal court, where it logically will be assigned to the district court judge already assigned to the related litigation and consolidated, should make the trial easier, more expeditious and less expensive. He said the trial could become piecemeal, duplicative, possibly contradictory and more expensive if the two federal lawsuits between the two parties continued in separate jurisdictions.

"Therefore, the court finds that there exists a 'local interest in deciding local controversies at home,' i.e., a West Virginia court should be deciding whether a West Virginia hospital breached a management services contract," Schwab wrote.

R&V argues it entered into a consulting agreement with Weirton Medical Center in 2012 and that agreement was extended. The company alleged in March, it commissioned an internal compliance investigation and audit at the hospital to be performed by outside counsel to evaluate physician compensation arrangements and, in connection with that investigation, it raised a concern pertaining to Tri-State Pharmacy.

Without consulting with or obtaining approval from the plaintiff, the defendant's board of trustees resolved to change the law firm conducting the investigation, and R&V was then informed it was not to have any role in connection with the internal investigation, according to the suit.

On May 20, an attorney sent R&V's outside counsel a letter containing several incorrect assertions and false accusations, according to the suit.

R&V alleges the hospital breached its contract and is obligated to pay an affiliation services fee of $1.75 million. R&V seeks the fee, as well as all other proper relief. It is represented by attorney Mark F. McKenna of McKenna & Associates.

In a related lawsuit, Weirton Medical Center is suing R&V Associates over allegations it breached its contract with the hospital for its benefit.

That suit was filed in the U.S. District Court for the Northern District of West Virginia and accuses R&V of directing the hospital's legal matters for its own benefit and not the benefit of the hospital.

The suit mentions the United States intervened in part in a whistleblower lawsuit filed against the defendant over allegations it committed health care fraud by illegally compensating physicians and causing false claims to be submitted to Medicare. The plaintiff alleges the defendant began directing its legal and compliance matters for the defendant's benefit in connection for the defense in the whistleblower lawsuit.

U.S. District Court for the Northern District of West Virginia Case number: 5:19-cv-00246

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U.S. District Court for the Northern District of West Virginia Wheeling Division

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