Baptist Hospital drops lawsuit against whistle-blower

A local whistle-blower no longer faces an N.C. Baptist Hospital lawsuit after the hospital voluntarily dismissed its case against him.

Baptist confirmed Friday the withdrawal of its lawsuit against Joseph Vincoli, a former administrative director who alerted state officials that the State Health Plan was overpaying the hospital. Vincoli, a Clemmons resident, was terminated by the hospital in October 2007.

The lawsuit was dismissed "without prejudice" in Forsyth Superior Court on Oct. 18, which means Baptist could refile a lawsuit against Vincoli. Both parties will pay their own costs and attorney fees.

Baptist said in a brief statement Friday that "while we do not normally comment on litigation, we believe the decision to dismiss is best for all parties involved."

When asked for further details about its decision, Baptist spokesman Chad Campbell said: "There is no additional information we can provide."

Vincoli declined to comment.

Phil Michael, who served as one of Vincoli's attorneys, said: "This is an appropriate disposition. Mr. Vincoli had acted honorably."

The State Health Plan is a self-insured plan that uses taxpayer money and employee premiums to provide coverage to more than 663,000 teachers and state workers.

Vincoli alerted state officials in January 2009 that Baptist was collecting more than it would have been entitled to if the State Health Plan had known about hospital rate increases and had insisted on getting rate discounts for which it was eligible.

The Baptist lawsuit, filed Jan. 26, accused Vincoli of breaching a May 2008 confidential settlement by contacting the plan and other state agencies about his concerns and "providing disparaging and/or confidential information."

Vincoli worked at Baptist as its managed-care director from July 2006 to October 2007.

The Baptist lawsuit said Vincoli's actions caused the hospital "to suffer embarrassment, negative false publicity, loss of goodwill with the state of N.C. and the communities the hospital serves, and financial loss including, but not limited to, attorneys fees."

Baptist also accused Vincoli of "unjustified, vindictive, malicious and gratuitous actions."

However, a state auditor's report released Sept. 7 appears to confirm Vincoli's complaints had validity. The report determined Baptist received $1.34 million in reimbursement rate overpayments from July 1, 2003, through June 30, 2008.

The hospital was suing Vincoli for damages of more than $10,000 to recover the more than $10,000 it paid Vincoli in the settlement, and to prevent Vincoli from further breaches of the agreement.

Baptist said Vincoli had no legitimate reason to involve himself in the State Health Plan contract issue as a private citizen and later as an employee of two state agencies. Vincoli now works for the N.C. Department of Corrections.

A website dedicated to Vincoli's defense fund said more than $7,000 in donations had been received to help defray his attorney costs, which were about $2,000 a month since January, according to Terry Henderson, treasurer and trustee of the fund. He received $5,000 from the State Employees Association of N.C.

Baptist and at least 20 other hospitals have said they had contracts that didn't require them to notify the State Health Plan of rate increases, so they didn't.

State auditor Beth Wood concluded in September that Baptist met the requirements of the contract and is not required to repay any money, primarily because the contract already had expired when the overpayments came to light.

Wood said a poorly written contract by the State Health Plan, along with a faulty job of monitoring the contract, seems to be at the root of the overpayments.

However, Wood said at that time she was disappointed with Baptist's statement that wording in the report led to what it called a "misinterpretation of what actually occurred under the contract." Wood said the report clearly showed the $1.34 million in overpayments did occur. Baptist disputes the use of the word "overpayments" to describe the $1.34 million.

Wood said she thinks Baptist has an ethical obligation to pay some, if not all, of the overpayment.

On Friday, Wood said Baptist did the right thing in dropping the lawsuit given that the audit gave credibility to Vincoli's whistle-blower efforts.

"Whistle-blowers can play a critical role in state agencies and officials getting key information," Wood said. "I hope this decision by Baptist will be encouraging to other whistle-blowers to come forward with their information."

Wood also said Friday that Baptist has not approached her office about paying any of the overpayment back to the state.