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Hospital legal costs show contrast

Section: Business

Meghan Gordon

West Jefferson Medical Center spent $1.3 million on legal consulting this year, or about twice as much as its counterpart public hospital in Metairie.

East Jefferson General Hospital in Metairie paid Dave Sherman, its outside legal consultant, $617,000, while the Marrero hospital paid $1.2 million to Breazeale, Sachse & Wilson and $76,000 to Peter J. Butler LLC.

Some of the disparity is explained by the fact that East Jefferson has a compliance department with two in-house lawyers and paralegals. West Jefferson doesn't staff a similar department.

Lucas Giordano, a senior vice president of the Metairie hospital, said he estimates the department spends about 20 percent of its time on cases that might otherwise fall under the hospital's contract with Sherman. The department's budget is about $620,000, he said, meaning about $124,000 more would go to the attorney if the hospital didn't have in-house lawyers.

The two figures bring East Jefferson General's estimated annual lawyer bills to $741,000, or about 57 percent of the legal fees spent by West Jefferson Medical Center.

The Jefferson Parish Council extended legal contracts for both hospitals by three years last week without comment. The hospital contracts now run through April 2011.

Councilman-at-large John Young said the expense gap didn't trouble him. He said the bills sent to West Jefferson could be higher depending on the hospital's particular legal needs and whether its board of directors engaged the lawyers more than its counterpart board.

"You're comparing apples to oranges," he said.

Peter Butler Jr., a partner at Breazeale, Sachse & Wilson, said the firm has 390 open files with West Jefferson hospital. Peter J. Butler Sr., his father, is a retired partner of the firm who continues to do work for the hospital and regularly attends its board meetings.

Slightly less than half of their cases are medical malpractice cases, the younger Butler said, and 45 are lawsuits. The remaining files include fraud and abuse compliance, employment contracts, voluntary retirement plans and other matters.

"I have no idea what East Jefferson's legal needs are," Butler said. "We don't do any work unless it is required by either law or West Jefferson's administration. And when we do the work, we get paid an hourly rate that is almost 100 percent below market."

Sherman said his firm has more than 800 open files for East Jefferson.

Nancy Cassagne, interim chief executive of the Marrero hospital, said she's satisfied with the legal services provided. Nevertheless, she said the administration has a duty to search for ways to operate more efficiently and would include its legal contract in a review of all outsourced services, including dietary and cleaning contracts, that the board of directors plans to comb through during a January retreat.

The Butlers have had the West Jefferson hospital contract since 1997. The council gave the East Jefferson contract to Sherman in 2004. He is law partner of Jefferson Parish Assessor Lawrence Chehardy and campaign treasurer for parish President Aaron Broussard and Councilmen Louis Congemi and Elton Lagasse.

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