Issue of hospital foundation immunity goes to high court
By Alan Cooper,
The issue of whether foundations set up to support teaching hospitals have charitable immunity appears to be on its way to resolution by the Supreme Court of Virginia.
We need resolution of it obviously, said
Another judge who sat in
Earlier this month, Norfolk Circuit Judge Everett A. Martin Jr. became at least the fourth judge to make such a ruling, although in a decidedly equivocal manner.
Martin said, “If I were deciding this issue for the first time, I might conclude that the Foundation does not operate as a charity. It operates a very large medical practice. A very large part of its revenues comes from insurance payments. A very small part of the value of the services provided is attributable to indigent care
The foundation receives no contributions or donations from the public. It uses 70 percent of its net revenues to pay bonuses to physicians. It requires the physicians to sign contracts that contain covenants not to compete, Martin said.
He noted, however, in Wright, Admr v. Silver (VLW 007-8-050) that the evidence before him differed from what Hogshire heard in that there was testimony that the U.Va. foundation was created primarily as a billing system.
And he referred to testimony that the Hampton Roads foundation is necessary for EVMS to attract well qualified doctors to teach future doctors.
Although he was not bound by the decisions of his
Phillip J. Geib, the
The Supreme Court may get yet another case to consider.
Testimony has varied at the several hearings, but they have been consistent in the insistence of the plaintiffs attorneys that the foundations are not true charities because they were set up to funnel money to doctors who treat patients largely as private physicians in addition to teaching at the hospitals.
The foundations have countered that their role in providing education, research and medical care for indigents makes them charities.
Much of the debate about the foundations followed the 2005 Supreme Court decision in Ola v. YMCA of South Hampton Roads Inc. (VLW
The court established a multi-part test and found that the defendant had immunity. In the final analysis, whether an entity operates as a charity turns on the facts of each case and not on the particular type of institution, the court ruled.