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Judge: NRMC lawsuit can continue

NATCHEZ — A federal judge ruled Friday that Natchez Regional Medical Center’s $46 million lawsuit against its former management company should proceed on schedule.

U.S. District Judge David Bramlette’s ruling came after attorneys for defendants Quorum Health Resources and two former hospital employees petitioned the court to throw out eight of the nine charges NRMC alleged in its December 2009 lawsuit.

QHR, a Brentwood, Tenn., health care management firm, had been contracted to manage NRMC for 16 years, from 1992 until the hospital board ousted QHR in February 2008.

QHR’s ouster came after board of trustee members felt they had been misled by phony financial information. Trustees said the inflated profitability numbers were provided by QHR in an effort to obtain an extension of the hospital’s management contract.

That extension was signed in June 2007. Questions of the hospital’s financial stability surfaced months later after an independent audit showed what hospital trustees say was everything from irregular accounting practices to outright fraud.

NRMC filed the lawsuit in December after a lengthy attempt to sell the county-owned hospital and right as it emerged from bankruptcy. The lawsuit is against QHR, former NRMC CEO Jeffrey Wesselman and former NRMC CFO Michael Anderson, both of whom were hired by QHR.

The lawsuit seeks $46 million in compensatory damages and an unspecified amount of punitive damages.

Attorneys for Quorum argued their motion for dismissal on two main points.

First, the defendants alleged that the eight counts — all except the breach of contract allegation — were barred by the statute of limitations since all eight counts occurred more than one year prior to the filing of the lawsuit.

NRMC attorneys successfully argued in opposition citing court precedent showing that since the hospital is, in fact, a public entity, it is not bound by the statute of limitations outlined in the Mississippi Tort Claims Act.

Second, the defendants argued that NRMC had failed to “state a claim upon which relief could be granted,” a legal phrase meaning that the original lawsuit didn’t adequately allege something upon which the court could rule or did not do so with sufficient detail.

On three of the counts, QHR argued they were essentially redundant with the allegation of breach of contract, the only count not disputed in the motion to dismiss.

The judge disagreed and allowed all the counts to stand.

“The hospital’s board of trustees is pleased that the court recognized that Quorum’s actions should be subject to the scrutiny of the judicial process,” NRMC’s board attorney, Walter Brown, said in a prepared written news release.

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