A judge yesterday threw out most counts in a lawsuit in which the parent company of Prince George’s Hospital Center accused county officials of improperly withholding millions of dollars in bailout money.
Circuit Court Judge Dwight Jackson ordered the county to temporarily provide $2 million within two weeks, but said county officials need not be forced to pay Dimensions Healthcare System $12 million next year because there was no legally binding contract.
“We’re disappointed as we understand the decision by the judge,” Dimensions Chief Executive Officer G.T. Dunlop Ecker said after the hearing in Upper Marlboro. The health system’s private team of attorneys is considering an appeal.
The dispute stems from a decision by the Dimensions board of directors to decline several conditions imposed by county officials in exchange for additional bailout money. The conditions included a shake-up of the Dimensions board and the forced ouster of board Chairman Calvin Brown. Mr. Brown declined to comment yesterday.
County officials think the hospital system has been mismanaged and insisted on new board leadership. Dimensions officials counter that the hospital system is underfunded and that its struggles are the result of a large volume of patients without health insurance.
The hearing opened with sharp words from associate county attorney Raj Kumar, who accused Dimensions of trying to extort money from county taxpayers. He called the company “the Enron of hospitals.”
Mr. Ecker defended the company’s performance and called Mr. Kumar’s remark “unfortunate.”
Despite the setback, there were no immediate plans for closing the health system, which also includes the Bowie Health Center and Laurel Regional Hospital.
Dimensions has petitioned the Internal Revenue Service to allow it to delay required pension payments of millions of dollars. That could help keep the hospital system operating until December or January. A spokeswoman for the health system said Dimensions expects to receive a response from the IRS sometime next month.
Mr. Ecker declined to say what might happen if the IRS does not allow Dimensions to defer its obligations.
“I’m not going to engage in what-ifs,” he said.
Mr. Ecker said all options, including closure, are being considered, but that bankruptcy is unlikely because Dimensions would have to spend too much money upfront on attorneys and consultants.
The uncertainty over the fate of the county’s largest health system has surfaced repeatedly in recent years.
Earlier this year, Mr. Ecker warned that the hospital could close after a state-backed plan failed in the legislature. He later apologized privately in a letter to county officials for acting too hastily. County Council Chairman Camille Exum, a Democrat, said the announcement was premature and created “public hysteria.”
Outside lawyers hired by Dimensions argued yesterday that the county government had promised to give Dimensions $9 million this year and another $12 million next year to avoid closure. The county paid $7 million this year but withheld the remaining $2 million after the Dimensions board refused to change the board’s makeup.