Judge Refuses to Dismiss Hospital Suit : Courts: Community Memorial contends county facility has wrongly siphoned off patients from private sector.

A Superior Court judge refused Wednesday to dismiss a Community Memorial Hospital lawsuit that claims the nearby county hospital is illegally wooing private patients--and he indicated that he would allow the case to go to trial.

Judge Frederick A. Jones said he would review Assistant County Counsel Noel Klebaum’s argument that statutes governing unfair business practices and competition do not apply to counties.

But Jones said he felt that Community Memorial had grounds to sue because Ventura County Medical Center has been acting as a “quasi-corporation” by trying to attract paying patients. He also criticized the county for trying to get around key issues raised by the lawsuit.

“I really don’t see the county squarely facing the complaint as brought,” Jones said before taking the case under submission.

Attorneys expect a ruling in a few days. If the case is allowed to proceed, the county will have 30 days to respond.

Community Memorial Hospital sued the county in July. The private hospital in Ventura contends that the county has overstepped its mandate as medical safety net for the poor by siphoning off paying patients from the private sector.

Community Memorial, located just two blocks from the county medical center, claims the county violated state and federal laws in setting up a network of clinics and forging contracts with local doctors to refer patients to the medical center.

But Klebaum argued Wednesday that the private hospital’s bid to limit the county to treating poor and indigent patients cuts across the county’s right “to treat any class of patient.”

He said that limiting California counties to treating only the poor would deprive patients of freedom of choice and force public hospitals to check whether patients have private health insurance and whether they sought treatment elsewhere before admitting them.

John McDermott, an attorney representing Community Memorial, agreed that counties should be able to accept paying patients under certain circumstances such as emergencies or when private facilities cannot meet a specific medical need.

But he said poor patients should be the county’s first priority, and that county hospital efforts to recruit paying patients--especially pregnant women who bring generous Medi-Cal reimbursements--could ultimately take beds away from the poor.

“By taking beds out of service that otherwise would be available for indigents, they’re reducing the flow of indigent patients they have to take,” McDermott said in an interview.

He said the poor are already suffering under a year-old county policy that encourages county employees to be treated at county facilities, while the poor “sit and wait.”

“The county is the single largest employer in Ventura County. This is an important patient base,” he added.

Aside from displacing poor patients, the policy has hurt private physicians, McDermott said.

“Overnight, practices disappeared,” he said.