Not wanting to rock the boat, the West Volusia Hospital Authority board voted 4-1 April 21 to step away from litigation that could have resulted in the Hospital Authority receiving a cash payment from companies associated with the opioid crisis.
For years, municipalities across Florida and the rest of the country have pursued the litigation, seeking funds to combat the effects of opioid addiction..
In 2019, in response to the high number of people experiencing addiction, the Hospital Authority retained West Palm Beach attorney Eric Romano to represent the board in a lawsuit against opioid retailers and distributors, including pharmaceutical companies Janssen and CVS Pharmacy Inc.
With so many governments filing lawsuits against the same defendants, Romano explained to The Beacon, the Hospital Authority’s case was consolidated with numerous others in a Cleveland court.
But Hospital Authority members expressed concern that being involved in the litigation could put a target on the Hospital Authority, drawing unwanted attention from state or county officials who are already questioning the existence of special taxing districts, like the Hospital Authority.
An act of the Florida Legislature created the Hospital Authority in 1957, and authorized it as a special district able to levy taxes to pay for health care services for those unable to pay.
Initially, the taxes collected assured that West Volusia could build and maintain a hospital. However, in 2020, the Hospital Authority lost its financial ties to AdventHealth DeLand, which by then owned two West Volusia hospitals, and state and local lawmakers in recent years have questioned whether the Hospital Authority should continue to exist.
“Special districts are on the hot seat,” Hospital Authority Board Member Judy Craig said. “I think at this point we have to be very aware of how we are perceived.”
While the Hospital Authority’s challenge against the opioid companies was issued in federal court, the State of Florida challenged the same companies in state court and received hundreds of millions of dollars. Municipalities, including county and city governments, will receive payouts, but the Florida Attorney General’s Office, Romano said, has cut out the special districts.
“The state has kind of taken the position that it is Big Brother, and local governments and special districts are simply creatures of the state,” Romano told The Beacon. “If they don’t do what the state wants, it can step in and take over its claims for them.”
When Romano tried to talk to the Attorney General’s Office, he said, he didn’t make it very far.
“We did try to open a dialogue with the state through the Attorney General’s Office and really just got nowhere with them,” he said.
Others are discussing the settlement, too
The Hospital Authority isn’t the only party that has joined lawsuits against opioid companies. Volusia County joined the State of Florida as a defendant in lawsuits against providers like Johnson and Johnson, and has even created an advisory board to make decisions about how to spend settlement money if and when it comes in.
The advisory board will include representatives from various municipalities to help chart the course for how to spend the settlement monies.
Settlements from the lawsuit came with a requirement that the funds be spent on combating local effects of the opioid crisis, and some on the Hospital Authority board were worried about being able to comply with that requirement.
“That, to me, means if we want to accept this money, we have to implement an opioid prevention program, and, unfortunately, I just don’t see us able to do this,” Hospital Authority Chair Jennifer Coen said.
Commissioner Roger Accardi pushed back, pointing out that the Hospital Authority could adopt existing opioid-addiction prevention programs. Coen, however, noted that the Hospital Authority has already received its applications from partner agencies seeking funding for next year.
Accardi was the lone dissenting vote on the Hospital Authority board in stepping away from the litigation.
The Hospital Authority was also given the opportunity to join in a legal challenge against the State of Florida for shutting out special districts from the settlement money, but said no.
Sarasota-based attorney Steven Teppler represents large hospital districts in Lee and Sarasota counties in that effort, and asked the West Volusia Hospital Authority if it was interested in throwing in its weight, too.
Even more than funds, Teppler said, his concern is that the state asserting unchallenged dominance over special districts like hospital authorities would serve as a precedent to do it again, as he put it, “extinguishing their rights.”
The authority decided against that, too.
Meanwhile, the Hospital Authority is embroiled in legal battles of its own. The taxing district challenged the Volusia County Council over whether the West Volusia Hospital Authority should be responsible for paying the county back for Medicaid distributions, since it no longer owns — fully or in part — the hospital in DeLand, which is now operated by AdventHealth.
The County Council rejected the Hospital Authority’s position and filed a lawsuit in February seeking to force the Hospital Authority to pay its share of the Medicaid reimbursement, to the tune of about $2.5 million per year.
Halifax Health Medical Center — which represents another hospital taxing district on the Daytona Beach area — has sided with Volusia County, arguing that if the West Volusia district doesn’t pay, a larger burden will fall on the county’s other two hospital districts: Halifax and a district in Southeast Volusia.
That lawsuit is currently pending in Circuit Court in Volusia County.