WEST VIRGINIA (LOOTPRESS) – A federal jury has awarded Memorial Health $5 million in damages in a lawsuit accusing WVU Medicine Camden Clark of participating in a civil conspiracy tied to an earlier federal case against the Marietta-based hospital system.
The verdict was returned in the U.S. District Court for the Northern District of West Virginia. Jurors found Camden-Clark Memorial Hospital Corporation engaged in a civil conspiracy and was vicariously liable for the actions of Todd Kruger, the hospital’s former general counsel.
The dispute stems from a federal qui tam lawsuit filed in 2016 by a group that included Kruger, former Camden Clark CEO Michael King and Dr. Michael Roberts. That lawsuit accused Memorial Health of violating the Stark Law and Anti-Kickback Statute by overpaying physicians in exchange for patient referrals.
The allegations prompted a federal investigation that continued for more than three years.
In its lawsuit, Memorial Health alleged Camden Clark was involved in developing the earlier case from the beginning. Memorial Health pointed to a report Camden Clark submitted to the U.S. Department of Justice in 2013 that it said closely resembled allegations later made in the 2016 lawsuit.
Memorial Health also alleged Kruger helped plan and pursue the case while employed by Camden Clark but was not initially identified as a party in an effort to conceal the hospital’s involvement.
Federal investigators ultimately found the allegations against Memorial Health were unsubstantiated, and the Department of Justice declined to intervene in the case. The lawsuit was dismissed in 2020.
Memorial Health argued the investigation cost it hundreds of thousands of dollars and disrupted its efforts to recruit and retain physicians in the Mid-Ohio Valley. The hospital system cited an increase in physicians declining employment offers while the investigation was underway.
Jurors rejected several other claims brought by Memorial Health, including malicious prosecution, abuse of process and fraudulent legal process. The jury also declined to award punitive damages after finding no evidence of malice.
Camden Clark Health Services and West Virginia United Health System, the corporate parent associated with Camden Clark, were cleared of liability.
The jury assigned 52% of the fault to Kruger individually and 30% to Camden-Clark Memorial Hospital Corporation.
