Weirton Medical suing R&V
WEIRTON — Weirton Medical Center is suing R&V Associates, its compliance consultant, alleging company officials attempted to tamper with witnesses and evidence and intimidate the hospital’s board of directors after it launched an independent internal investigation into R&V’s “financial, legal, regulatory compliance and physician staffing” decisions.
The suit, filed Tuesday in U.S. District Court in Wheeling, claims R&V principals Vincent C. Deluzio and Ronald Violi acted in their own interests, not the hospital’s, after the firm was named as defendant in a federal whistleblowing lawsuit 18 months ago.
That complaint, also being heard in the Northern District, alleges Violi, then Wheeling Hospital’s CEO, executed improper compensation agreements with physicians based on the volume or value of referrals. Violi, 79, retired in May. It also named Wheeling Hospital as a defendant, a charge the hospital has vigorously denied.
Filed by Louis Longo, a former executive vice president at Wheeling Hospital, the whistleblowing complaint alleged the hospital improperly paid millions in kickbacks to doctors.
The suit also claims the hospital provided compensation to a number of employed and contracted physicians that was well above fair market value in order to gain referrals.
Wheeling Hospital has characterized Longo’s lawsuit as baseless and in March filed a federal lawsuit against Longo, claiming breach of fiduciary duty and abuse of process. In its complaint, Wheeling Hospital said Longo “was responsible for identifying risks of fraud and reporting the existence of fraud or the risk of fraud to the board of directors of Wheeling Hospital” as part of its contract with Deloitte, with whom he’d worked prior to joining Wheeling Hospital’s staff.
Under R&V’s management contract, WMC maintains Deluzio is obligated to oversee legal and regulatory compliance matters “with a goal of improving the financial condition and (operating) results” of the hospital. But, after the whistleblowing suit was filed in December 2017, WMC’s complaint alleges Deluzio acted in his own, Violi’s and R&V Associates’ interests, and not theirs, including allegations he pressured the board of directors to accept his choice of legal counsel, a decision the hospital claims was not in its best interests.
WMC’s board retained Bowles Rice LLP for its internal probe of “certain matters relating to (the Weirton hospital’s) regulatory compliance.”
“(Their) actions and omissions created an irreconcilable conflict of interest in that it undermined its ability to provide management consulting services for the benefit of WMC,” the hospital complained.
R&V and Deluzio, the lawsuit alleges, “objected to, refused to cooperate with, and attempted to obstruct” the Bowles Rice investigation by threatening to sue WMC for breach of contract, and “wrongfully (attempted) to delay, obstruct, avert and otherwise influence” the board’s internal investigation.
The suit also alleges the defendants tampered with witnesses and altered “documents and policies” relevant to the hospital board’s investigation.
R&V’s contract was suspended on May 22.
WMC is seeking damages, attorneys fees and court costs from the defendants, as well as the return of $335,000 it had paid in advance for management services for the period of June 1 through Dec. 15.