Fired Doctor Sues Hospital, Parent Firm For $37.1 Million

Claims Dismissal Violates Anti-trust Laws

March 08, 1992|By Alan J. Craver | Alan J. Craver,Staff writer

A Havre de Grace doctor is suing Harford Memorial Hospital, its parent company and three administrators for $37.1 million in U.S. District Court over his dismissal as the facility's chief of radiology.

Dr. Brad M. Cogan charges the defendants violated federal anti-trust laws when he was fired in February 1991 because of his plans to open aprivate radiology facility.

Cogan was fired from the Havre de Grace hospital in the middle ofa second five-year contract, which the doctor says did not prohibit him from operating a competing practice.

The nine-count, 70-page suit filed Wednesday names Harford Memorial and its parent company, Upper Chesapeake Health System, of Belcamp, as defendants.

The suit also names Leonard R. Cantrell Jr., president of Upper Chesapeake; Jeffrey Flick, senior vice president of the company, and Barbara R. Aselage, chief operating officer of the hospital, as defendants.

"Theactions were performed by the defendants for the specific purpose ofmaximizing the profit of Harford and Upper Chesapeake at the expenseof the care and treatment of their patients," the suit says.

In addition to Harford Memorial, Upper Chesapeake operates Fallston General Hospital and a health management organization that has about 16,500 clients.

Allan Acton, an Upper Chesapeake spokesman, said the company has not reviewed the suit. He declined further comment.

Cogan, who opened the Colonnade Imaging Center in Bel Air last fall, was hired as an independent contractor at Harford Memorial in 1984 under a five-year contract. The contract was automatically renewed for another five years in 1989.

The contract called for Harford Memorial and Upper Chesapeake to pay Cogan a minimum of $500,000 a year, requiring the doctor to maintain malpractice insurance and hire two certified radiologists to handle X-rays for hospital patients, the suit says.

Harford Memorial would provide the radiologists with equipment and billing services.

Cogan and a second radiologist handled about 20,000 patients a year, the suit says.

The suit contends hospital management failed to provide adequate equipment and that Cogan was never able to hire a third qualified radiologist because the hospital did not provide the money.

To generate money for better equipment and a larger staff, Cogan opened a small out-patient facility that charged patients a separate fee for its services, the suit says.

Cogan claims hospital administrators were aware of the facility and made no attempt to close it.

The facility, however, was phased out after it did not provide enough income.

Cogan later initiated plans toopen a private radiology facility to perform sophisticated X-rays that couldn't be done at the hospital and offered Upper Chesapeake a chance to invest in the facility, the suit says.

Cantrell, Upper Chesapeake's president, wrote Cogan on Feb. 4, 1991, that his "ongoing involvement with a competing imaging center while performing his contract with the hospital was simply unacceptable," the suit says.

Thedoctor was told that Upper Chesapeake would not send any patients tohis facility, although Cogan warned Cantrell that hospital patients would have to travel "many miles" to seek similar services, the suit says.

Harford Memorial offered Cogan a new one-year contract that would have prevented the doctor from opening a private facility within 20 miles of an Upper Chesapeake facility, the suit says.

The newcontract would have allowed the doctor to charge his own fees for services, but he would have been required to treat Upper Chesapeake patients on a non-profit basis.

Cogan said he rejected the proposed contract because it would have violated federal anti-kickback statutes.

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