Charleston charity hospital says it shouldn't have to pay punitive damages award

The Charleston Gazette reports that the Charleston Area Medical Center (CAMC) seeks to avoid paying $20 million in compensatory damages that a jury awarded to a surgeon for the reputation harm CAMC caused when it revoked his privileges. The CAMC lawyer's Richard Neely says that the hospital shouldn't have to pay any punitive damages because it's a charitable hospital -- it provides 20% of all non-reimbursed health care in South Carolina -- and has immunity against such awards.  The lawyer also said that the state Supreme Court has never affirmed a punitive damages award against a nonprofit hospital,  If the $25 million award is upheld, patients, not CAMC administrators, "will end up paying the bill," according to Neely. 

In a string of colorful rhetorical questions, Neely said: "Let us assume that the CEO of CAMC is Adolph Hitler, aided and abetted by Joseph Stalin as general counsel, and Benito Mussolini, Pol Pot and Tojo as department heads," Neely wrote in a reply to Hamrick expected to be filed today in Kanawha Circuit Court. "So what? Will this award come out of their salaries? No. Will this award cause them to be fired? No."

These were some of the same concerns that prompted Congress to enact intermediate sanctions as an alternative to revoking a charity's tax exemption -- the bad guys should pay for abuses, not the organization itself or its intended beneficiaries.

rk