Attorneys for Piedmont Augusta have forced a lawsuit filed by hospital retirees into U.S. District Court, raising old questions about ownership of the hospital.
Robert Taylor and approximately 173 more University Hospital retirees with 30 years of continuous service filed suit in Richmond County Superior Court against new owner Piedmont in March. They are demanding Piedmont guarantee it will continue to pay for a Medicare supplemental policy for the rest of their lives.
The group, the oldest of whom are in their 90s, banded together last year after Piedmont started warning it could cut the benefit, despite University promising it in writing many times as a retention tool.
“The fact that people who are ill and compromised have to worry about what they thought they had title to – that’s one of the least things they should worry about. But that’s why we’re fighting,” Taylor said.
While most of the retirees aren’t following the legal wrangling closely, they know one thing – it isn’t the guarantee they want from Piedmont, he said.
“I think a fair assessment is waiting and just observing the legal process at work. Frankly most of us don’t understand the details of how this happens, so it feels like just more waiting than anything else to us,” Taylor said.
Piedmont’s response to the lawsuit was to contend the benefit was covered under the federal Employee Retirement Income Security Act of 1974, or ERISA. Intended to set minimum standards for employer-sponsored health insurance and retirement plans, ERISA cases must be heard in federal court.
And under ERISA, the retirees don’t have a case, because Piedmont hasn’t ended the benefit, hospital lawyers said in a motion to dismiss the claim.
The retirees are arguing that paying for their supplemental Medicare policy isn’t covered by ERISA – it’s merely a free-standing perk or “hidden paycheck” that Piedmont is now bound by its promise to provide. In addition, had it been an ERISA plan, Piedmont should have mentioned to the court it was unfunded, they say.
Lastly, ERISA doesn’t cover government-sponsored plans, and Piedmont remains a quasi-government entity subject to the will of the Richmond County Hospital Authority.
The plaintiffs have filed a motion to remand the case to state court, which Piedmont opposes.
In 1984 the authority outsourced operations of the county public hospital to University Health Services, a nonprofit, in a 40-year lease. It has been amended multiple times including a in 1985 to add open-meetings and open-records requirements and rules for the appointment of trustees to what then was originally a seven-member board.
Three authority members could serve as trustees and the authority had power to select the rest from nominees made by University.
In 2006, the lease was extended to 2045, and in 2017, University’s purchase of the Summerville Campus was added. Last year, as Piedmont was finalizing its merger with University, the lease was extended to 2062.
The merged hospital’s new bylaws call for a board of at least 13 directors, with 10 “community directors” residing in the service area and two appointed by Piedmont Healthcare, with the parent corporation and authority able to reject community directors. Three directors may be from the authority.
