Testimony focuses on billing as doctor's trial against hospital continues

David Yates Oct. 20, 2009, 5:00am

Computer problems kept the bill box empty during his first few months of employment with Memorial Hermann Baptist Beaumont Hospital, testified Dr. James Grubbs on Monday.

Over the past two weeks, the Southeast Texas Record has reported on the civil trial of Dr. Grubbs against Memorial Hermann Baptist Beaumont Hospital currently carrying on in Jefferson County District Judge Donald Floyd's 172nd Court.

Dr. James Grubbs alleges Baptist Hospital unjustly retaliated against him by terminating his contract after he reported alleged illegal Medicare billing – which he claims was a common practice at the hospital.

Conversely, the hospital contends Grubbs was let go only six months into his contract because he refused to use his "best efforts" to bill and collect patients.

Grubbs, a child psychiatrist, was recruited by the hospital in October 2003. The two parties entered into a one year contract wherein the hospital agreed to financially back Grubbs for one full year while he focused on growing his practice, court papers say.

On Monday, Oct. 19, Grubbs testified that in November 2003, a month after he was hired, he filed applications with Medicare and Medicaid to begin billing the federal programs.

However, even though the evidence shows that Grubs was eligible to begin billing the federal programs in the spring of 2004, he failed to collect a single dollar in the months of March, April, May and June.

Grubbs testified that he was experiencing computer issues and was not aware that he could begin billing Medicare and Medicaid until June 2004.

Defense attorney David Bernsen openly called Grubbs' computer problems an "excuse" as he testified, prompting plaintiff's attorney Gary Cornwell to object to his counterpart's "sidebar."

Case background

According to Grubbs' lawsuit, around six months into his stint with Baptist his contract was terminated for his alleged failure to use his "best efforts" to bill and collect as outlined in the contract.

During opening statements, Cornwell called his client's alleged breach of contract a "complete sham," and told jurors the doctor's termination was an act of retaliation for reporting that the hospital and staff did not act in the best interest of patients and illegally billed Medicare for doctor visits that never occurred.

Cornwell said Grubbs, disturbed by the hospital's dubious practices, began writing letters to department heads and even contacted state authorities, including the Texas Medical Board.

Shortly after making the reports, Grubbs said he was notified that he was failing to use his best efforts to bill and collect in accordance with his contract.

Thirty days later, Grubbs was fired, court records show.

"These are very serious allegations against good people," said Bernsen during opening remarks.

Bernsen said Grubbs failed to collect a single cent from patients he treated during the first months of his practice.

He also told jurors that Grubbs had not spent any of the $10,000 the hospital loaned him to promote and market his practice, insinuating that perhaps Grubbs was not motivated in growing his practice but was content to milk the hospital for the duration of his contract.

The contract, court records show, called for Baptist Beaumont to reimburse Grubbs up to $20,000 a month for one full year.

Hypothetically speaking, Bernsen said, if Grubbs collected $5,000 in the month of February 2004, then the hospital would be on the line to pay him $15,000 - and if Grubbs made nothing, then Baptist Beaumont would be on the hook for the full $20,000.

Jurors will have to decide if Baptist Hospital "maliciously and purposefully" terminated Grubbs' contract in an act of retaliation, or if the hospital was acting within the guidelines of the contract.

Grubbs is asking jurors to award him what could be millions for lost wages and compensatory as well as punitive damages.

Bernsen is attorney for the Beaumont law firm Moore Landrey.

Cornwell has a practice in Beaumont.

Case No. A173-730

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