ER contract at AVH called into question
Contract negotiations worth as much as $1.2 million are under way between a local, publicly funded entity and a private firm, and it’s all being done without bids or even an opportunity for competing firms to comment on the situation.
The contract in question is the emergency room services agreement between Aspen Valley Hospital and Aspen Emergency Medicine, a local group of emergency medicine physicians. It hasn’t been put out for bid anytime in the recent past, and it’s not being put out to bid this year either.
Whether that’s OK, depends on whom you ask.
Aspen Valley Hospital attorney Paul Taddune says it’s just fine, because Colorado law doesn’t require public bidding for essential services – as in the emergency room – at public hospitals.
But a pair of local orthopaedic surgeons say it is not OK for the hospital to keep them from bidding on the contract.
Dr. Gary Brazina and Dr. Stephen Nadler haven’t sued over the fact AVH, a public hospital supported with property taxes, is unwilling to consider a competitive bidding process for a very large contract. But they have brought the issue up in their antitrust lawsuit, filed two months ago in federal district court.
Aspen Emergency Medicine and the hospital are named in the suit with Orthopaedic Associates of Aspen and Glenwood Springs, a practice that includes some of the most familiar bone and joint specialists in valley. The suit alleges all three have conspired since 1996 to keep Brazina and Nadler out of the local market. And from a business standpoint, their practice, Aspen Orthopaedic and Sports Medicine, has been a failure.
While the antitrust suit doesn’t directly allege wrongdoing with the emergency room contract, it does point out that the hospital refused to even discuss a bid from Brazina and Nadler, adding to the long list of alleged abuses and manipulations that the defendants undertook to keep the newcomers at bay.
“When Dr. Brazina and Dr. Nadler inquired of the hospital about submitting a bid on the new contract for operation of the emergency room, they were informed that the contract would not be put through a public bidding process,” the suit says.
“Obtaining the contract for operation of the ER at AVH would enable Aspen Orthopaedic and Sports Medicine to earn income sufficient to maintain its medical practice in the Aspen area. Refusing it the opportunity to even bid on such contract is another means of attempting to drive Aspen Orthopaedic and Sports Medicine from the marketplace,” the suit says.
“I think the lawsuit speaks for itself – that professionals would suggest that they should have the opportunity to control the emergency room so they can refer to themselves,” said AVH’s Taddune.
He points out that state law specifically exempts hospitals from having to bid out for vital services so that long-term relationships can be established, even when short-term contracts are involved.
“I couldn’t imagine a scenario where the hospital would contract with a group of physicians who aren’t specialists in emergency care. You want physicians in the ER who are certified in emergency medicine,” said hospital CEO Randy Middlebrook. He added that the doctors at Aspen Emergency Medicine have never given the hospital cause to look elsewhere to staff its emergency room.
Under the existing emergency room contract, Aspen Emergency Medicine provides physicians and physician assistants, while the hospital provides the rest – facilities, equipment, nursing and billing. The one-year contract will expire on Dec. 31.
In 1998, according to hospital records, AVH paid $1.17 million to Aspen Emergency Medicine, which is owned by Dr. John Glismann, Dr. J. Stevens Ayers, Dr. Marion Berg and Dr. Christopher Martinez.
The amount they’re paid is based on the previous year’s collection rate at the hospital. In 1998, the hospital collected 82 percent of the total amount it billed for all services, so this year, the emergency room contract requires the hospital to pay Aspen Emergency Medicine 82 percent of emergency room billings. If the hospital collects more than 82 percent, it keeps the difference; if not, it eats the difference.
“It’s set up so they do no better or no worse than the hospital. You can’t be any fairer than that,” Middlebrook said.
At Vail Valley Medical Center, a private, nonprofit hospital, the arrangement is similar to the one here, with a private group of physicians staffing the emergency room with qualified doctors, and the hospital doing the rest. Although a hospital spokesman declined to say how much the contract is worth, he did say it is reviewed every year.
Valley View Hospital, a for-profit institution in Glenwood Springs, contracts individually with emergency medicine physicians and currently pays them $65 an hour. The hospital reviews the pay and its relationship with the doctors once every three years, said a hospital spokeswoman.
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