[2013] Consequential Damages

by Joseph Hayes

  The early reports were even more encouraging than Rick had dared to hope for. Over one thousand representation letters had been mailed, and it had been only four days since the lawsuit was filed. Most people took some time to react to something like this. It would take awhile for them to dig up their medical bills and try to decipher them. Those people would eventually call. The firm’s advertising blitz would continue and news would spread by word-of-mouth. Thousands more would sign up, making it a cinch that the court would certify this case as a class action. When that happened, Sullivan & Leach would be representing every patient who was overbilled by USH, whether they had responded or not, unless they affirmatively elected to opt out of the class, which almost no one ever did.

  Rick had barely slept all week. He'd given countless interviews to reporters from all over the country. When he wasn't speaking to the media, he was returning phone calls to potential clients who had questions that the call center was unable to answer. He should have been exhausted, but he wasn't. He was elated. He felt like celebrating, and since the long week was about over, that's what he intended to do. But first, there was one more task to accomplish; one more set of wheels to put into motion. He asked his secretary to send in Mr. Fowler, the visitor who had been waiting patiently in the reception area.

  “Fowler!” Rick strode across the office, smiling brightly and extending his hand. “We’re in business, pal. This is going to be a big one!”

  Fowler shook his hand, but did not return the smile. Rick took no offense, because he’d never seen the man smile. He was all business. Rick had worked with Fowler several times in the past, when he needed an investigator who was highly skilled, resourceful, and not afraid to bend a few rules to get what he wanted. In fact, Rick was pretty sure Fowler didn't consider himself bound by any rules. His past was a mystery, but Rick knew better than to pry. Fowler would not have been forthcoming, and Rick was better off not knowing certain things. He suspected that Fowler had once worked for the government, in some sort of covert operations capacity, but now he was strictly freelance. He worked alone, and he worked for cash. He was expensive, but he was worth it. He got results. Just as importantly, he was discreet. Rick was confident that Fowler would keep confidences, no matter what, and that neither danger, legal threats nor torture would unseal his lips. That was just part of his makeup.

  Fowler got right to the point, as he always did. He spoke little, and when he did, he was economical in his use of the spoken word. “What's the mission?” he asked.

  “For starters, I need to know who I'm up against. I like to know my enemies.” Rick handed Fowler a copy of USH’s most recent annual report. Inside the front cover was a photograph of the company's officers. “I want to know everything there is to know about these guys. Have they been involved in any prior business scandals? Did they do drugs in college? Any extramarital affairs? I want to know anything and everything that might be harmful or embarrassing to these guys. If they ever got a parking ticket, I want to know about it.”

  “No problem. What else?”

  “Their lawyers—these guys.” He handed Fowler a picture and a short biography of Jake McShane and Demetrius Giannakis, along with a printout of the Samuelson & Reid website. “Same thing. I want any dirt you can find on them or their firm. Find out who they’ve represented. If we can’t find dirt on the lawyers, there's a decent chance that they’ve represented some bad apples in the past, and that kind of information may be useful. Dig into the courthouse records, particularly the criminal records, and see if you can find any connection between these guys and some scoundrels.”

  Rick knew that hacking into computer systems and navigating complex databases was one of Fowler's specialties. He didn't look like a computer geek. To the contrary, he looked more like a biker. He wore a black leather jacket, black jeans and black cowboy boots. Although he appeared to be in his mid-forties, his perfectly coiffed hair was snow white, in stark contrast to a very ruddy complexion. He was fit and muscular. Just plain scary looking, Rick had often thought, but a master of gathering information.

  “Anything else?” Fowler asked.

  “Yes, after you dig up whatever information you can find, I want you to follow this guy closely.” Rick pointed to Jake's picture. “I want to know where he goes, and who he talks to. He's careless. We may get some clues as to their strategy.”

  “What makes you think he's careless?”

  “I know this guy. We went to law school together and we were actually pretty good friends. He's a decent guy, but he’s always been sort of naïve, too trusting. When we were first-year law students, he had his entire semester’s worth of work wrapped up in his study outlines. He was at the library studying and left them just lying there on the desk while he went out for a snack.” Rick paused.

  “And?”

  “And I taught him a valuable lesson.” Rick laughed heartily, relishing the memory. “I snatched his outlines. I did it as a joke at first and planned to give them right back, but I never got the chance. He got campus security and the dean involved right away. At that point, I was afraid I’d get expelled if I came clean, so I didn’t. Anyway, my point is that any normal person would be extremely careful with something that important. Intellectually, this guy is smart. But he's careless. If we watch him closely, it may pay off somehow.”

  “Anything else?”

  “Yeah, one more thing. Can you get into USH’s e-mail system?”

  CHAPTER 33

  Three weeks had gone by since the USH lawsuit was filed. Jake had virtually taken up residence at USH’s corporate headquarters since that time, reviewing mountains of documents and interviewing countless employees, trying to develop an understanding of the past history and present state of USH’s billing practices. He was waiting outside of Demetrius Giannakis’s office, while Demetrius was finishing up a meeting with the governor. It was an election year, and the governor was making his rounds with the city's power brokers, enlisting their support. Demetrius Giannakis was on everyone's list as one of the most powerful and influential members of the Chicago legal community.

  To Jake’s surprise, Demetrius called him into his office while the governor was still there, and made introductions. Both men were all smiles and polished charm as they said their farewells. Immediately after the governor had departed, Demetrius’s smiling countenance abruptly became dark and impatient. Jake had requested this meeting to apprise Demetrius of his preliminary findings and had warned Demetrius that they were troubling.

  “So, what’ve we got?” Demetrius asked curtly.

  “Well sir, I'm afraid it's a bit of a mess. They—”

  “Don't editorialize. Just give me the facts,” Demetrius demanded.

  Jake composed himself. He had rarely worked with Demetrius before being assigned to this case, and he was beginning to understand why the firm's associates were intimidated by him. Although he oozed charm when dealing with clients and politicians, the tall Greek with the hawk-like features was known to be a brusque and impatient bully with the firm's younger attorneys.

  “Here's what we’re dealing with,” Jake began, coolly and firmly. “As you know, USH has been growing at a tremendous pace over the past ten years. They’ve gone from owning seventy-five facilities in five states to over six hundred facilities in thirty-four states. Their focus has been on growth through acquisition, and they’ve had great success on that front. Their revenues have skyrocketed, as has their stock price, because of the phenomenal success of their acquisition program. They’ve devoted their best people, their resources and their attention to that aspect of the business, and some of the back-office functions have not received the attention they need.”

  Demetrius threw up his hands. “Look, I don't need a dissertation on the history of USH. I'm well aware of it. Tell me about their billing practices.”

  “I was getting to that. Two years ago, the company installed a new software system to handle customer billings. Unfortunately, it was implemented before they had iro
ned all the bugs out. On top of that, there has been an ongoing effort to convert the billing systems of the newly acquired businesses into the USH system. That involves a great deal of complex programming, as well as a huge amount of data entry. A lot of errors were made in the process.”

  “What kind of errors? And how many?”

  “First, there are mistakes caused by simple human error in the data entry. The task of inputting this massive amount of information into the new system is enormous. They don't have adequate staffing to do this quickly and with good quality controls. They have a number of temporary employees assigned to the project, but they're working very long hours and their competency is marginal to begin with. Here's an example of what can happen.” Jake handed Demetrius an invoice. “This is a bill relating to a knee surgery. It was a fairly routine procedure to repair a torn ACL, which took less than two hours. The invoice shows that the patient was charged for twenty-two bags of IV fluid. That's an obvious error—someone simply hit the keystroke twice. The quantity should have been two, not twenty-two.”

  “Okay, so there's some quality control issues and human errors involving data input. What else?”

  “There are other problems resulting from the programming and the attempt to merge different billing systems. These are more widespread and more concerning. For example, when a certain procedure is performed at hospital “A,” there may be a standard group of services and supplies that are provided. However, that bundle of goods and services may be different at hospital “B.” They’re not identical in every hospital. USH is trying to standardize that throughout their network, but they're not there yet. As a result, when the bill is generated using the USH system, it assumes a group of services and supplies that may be different than what the customer actually received, particularly if the facility in question is new to the USH network. The customer may wind up paying for items he didn't receive. Similarly, the billing systems of the various hospitals use codes that are not identical from one facility to the next. The USH system may translate a code from a newly acquired facility inaccurately, and again, a customer could be charged for something he didn't receive.”

  “I assume that sometimes the customer is better off, and is charged less than he should be?”

  “No question about it, although I'm not sure we'll get much credit for that. USH's prices are generally a good deal higher than the businesses it acquires. What frequently happens is that a patient received certain services at a facility before it was acquired by USH. The billing is not generated until after the acquisition, and the billing reflects USH’s pricing structure, which is not what was in effect at the time and place the patient was treated.”

  Demetrius was getting visibly more agitated. “What a goddamned mess! What about the specific examples cited in the complaint. Are the facts accurate?”

  “I'm afraid so, every one of them. As you may recall, one complaint involves a patient who was double-charged for various items in her hospital room—tissues, latex gloves, petroleum jelly. Those items are supposed to be included in the price of the room, but due to a programming error, she was charged for each of them separately, in addition to paying for them as part of the room charge. The complaint also included an allegation that a patient was charged an exorbitant rate for an antibiotic that she allegedly did not receive and wouldn't have used because she is allergic to it. That allegation appears to be true as well. Her medical charts clearly indicate she is allergic to that drug, and that the doctor canceled the order for it. Then there's the allegation involving the Turner baby.”

  “Which is?”

  “That the family was charged $300 for a circumcision allegedly performed before the baby left the hospital.”

  “Is there something unusual about that?”

  “Yes—the baby was a girl.”

  “Son of a bitch,” Demetrius muttered in disgust as he dialed Paul LaDuke, USH's general counsel. “Find him, and have him call me immediately,” he demanded, after being informed that Mr. LaDuke was traveling.

  “How many individual patients have actually been harmed?” Demetrius asked. “With health insurance as prevalent as it is, I would think that it’s mostly insurance companies that get stuck footing the bill when there's an overpayment.”

  “There’s no question that many insurance companies have been overcharged,” Jake replied, “but there are far more individual patients who were victimized, either because they had no medical insurance or because they had to pay deductibles or copayments, even when they did have insurance. Sullivan & Leach will be representing most of the insurance companies too, but that will be a separate lawsuit. They’ll push the lawsuit for the individual plaintiffs first, because a jury is much more likely to react emotionally and award large punitive damages when the plaintiffs are a bunch of little people with compelling individual stories. Then, if the verdict goes their way in that case, it gives them a lot more leverage in their case involving the insurance companies.”

  Within minutes, Paul LaDuke called and proceeded to receive a serious tongue lashing from Demetrius. Jake had never heard one of the firm's lawyers speak this way to a client before. Demetrius was ranting. Two reasons occurred to Jake. First, Demetrius didn't like the idea of his firm being on the losing end of a high-profile case, and this one was shaping up to be a loser. Second, he was setting his client's expectations and protecting the firm from possible criticism. He was making it abundantly clear that USH had gotten itself into a royal mess and that the best legal counsel on earth could not protect them from a costly adverse judgment.

  “Are you aware that you’ve got serious problems with your billing systems, Paul?” Demetrius had raised his voice, almost to the point of yelling.

  “We're not perfect, I realize that,” LaDuke replied, sounding defensive.

  “It sounds like you're a far cry from perfect. What have you been doing about it?”

  “We're taking a serious look at this, I can assure you, and we have been for some time. We established a task force over a year ago, and they've made various recommendations. Basically, the recommendations involve a full-scale audit, using an independent auditing firm, and then, once we identify mistakes, we would proactively follow up with the affected patients, providing a refund or billing adjustment to anyone that's been overcharged. Does that sound like a sensible approach?”

  “It makes perfect sense, only you should've done this a long time ago.”

  “Won’t it help our legal position that we've been looking into these issues and have been developing plans to address them? We’ve been trying to do the right thing. I'm completely confident that you won’t find the slightest evidence of any intentional wrongdoing.”

  Demetrius gave Jake a look, indicating that he wanted to hear Jake’s thoughts on that point. Jake chose his words carefully. “From what I've learned, I agree, Paul. I have seen absolutely no evidence that anyone working for USH did anything remotely fraudulent or inappropriate. And the fact that you've taken measures to address this is good. That will be a major part of our defense. What hurts us is the fact that we haven't actually implemented the plan and started issuing refunds. The plaintiffs will try to use that against us. They’ll argue that this demonstrates that USH had knowledge of this problem for a long time, and did nothing.”

  Demetrius jumped in again. “Paul, listen to me. Fix your goddamned system—now! Whatever resources it takes, get it done. Get that auditing firm in there immediately. We need to identify any and all errors ASAP and start issuing refunds—immediately!”

  “I understand, Demetrius. We'll get right on it.”

  “Good. Just one more thing, Paul. This plaintiffs’ lawyer has a source, someone who knows your organization. That's obvious. There’s no way that six people with billing errors involving USH facilities just happened to call this guy out of the blue at the same time. I don't believe in coincidences like that. That son of a bitch solicited them somehow, and he ought to be disbarred, but we’ll never prove that. But the fa
ct is, someone has to be feeding him information. He's got an ideal batch of clients with very compelling stories. I want you to think about that. Who would be in a position to serve up those cases? Find out if there are any disgruntled employees or former employees who have access to that kind of information.”

  The door to Demetrius's office opened and Jake’s secretary timidly stuck her head inside. Demetrius shot her a look of irritation, as he continued talking into the speakerphone. It was clearly inappropriate to interrupt a meeting with Demetrius Giannakis and Kimberly ought to know that, Jake thought. She beckoned to him urgently. “Judge Trainor’s clerk just called,” Kimberly whispered. “There's been some development with the case. He wants to discuss it with counsel for both sides immediately. She wouldn't say what it was about, except that it was urgent.”

  Judge Trainor, who'd been assigned to the USH case, was known to be a very slow, deliberate judge. Neither Jake nor Demetrius had known him to order an unscheduled hearing on short notice.

  “This can't be good,” muttered Demetrius.

  CHAPTER 34

  Nearly five years had gone by since his incarceration began. To Jerome, it seemed like a lifetime, but the day was finally here. He had survived, and now he was free. It had been a bleak and depressing existence, but he had managed to avoid the many forms of abuse that were common inside the prison walls. He had established his reputation early on as one very dangerous character. An intense dedication to weightlifting had added bulk and definition to his already massive frame, so the other inmates gave him plenty of room.