Atlantic City clears medical provider of improper practices, costs
By MICHAEL CLARK Staff Writer, 609-272-7204
Published: Wednesday, August 06, 2008
ATLANTIC CITY - City officials are clearing the name of a Pleasantville medical provider accused of improperly practicing medicine and abusing its ability to hike up costs.City Solicitor Kathleen Kissane said the resort researched allegations made by former City Council solicitor Nestor Smith against Reliance Medical Group and found no wrongdoing."We had independent legal counsel look into the situation and received an opinion," Business Administrator Carol Fredericks wrote in an e-mail. "I believe Mr. Smith made some inaccurate allegations."According to several city memos obtained by The Press of Atlantic City, Smith accused Reliance of deliberately seeking change orders solely to boost its payments from the city.Smith also claimed Reliance was in violation of the Corporate Practice of Medicine Doctrine, which prohibits a general business from practicing medicine.
However, a letter from city-hired attorney Catherine Tuohy to Kissane discounted the accusation.Referring to a New Jersey statute, Tuohy wrote: "A practitioner may practice in a partnership, professional association or limited liability company as long as the entity is composed solely of (state licensed) healthcare professionals."Therefore the City of Atlantic City may properly do business with and enter into a contract with Reliance Medical Group," Tuohy wrote.Smith declined comment for this report.Smith suggested the city hire him to conduct an investigation into Reliance because of its corporate status and a suspicious number of change orders amounting to $1,830,769.Smith cited six change orders from 2006 in his memos to various City Council members, claiming the company improperly seeks them to increase the value of its contract.Kissane did not discount the existence of the change orders, but said they appeared to be handled properly.In June, Mayor Scott Evans told The Press the city would investigate the change orders, but Reliance owner Dr. Jon Regis said the administration told him they were not being examined.Change orders normally are awarded when services go beyond the scope of the original contract.Kissane said the city will continue to review Reliance's contract and any future change orders with the same attentiveness that they give all vendors.Reliance owner Dr. Jon Regis said Tuohy's letter vindicates him and his company."Needless to say, this most recent written evidence pleases me, as I always knew that neither Reliance, nor I, were guilty of any type of wrongdoing in this regard," Regis wrote in a letter to The Press.Regis previously claimed the change orders were issued because the company's services contract had expired, but the city asked that the services continue.Regis has also couched Smith's allegations as a means to obtain a contract with the city. Smith had asked the city to pay him $200,000 to investigate Reliance's corporate status and its change orders. According to memos from Smith to various City Council members, the Evans administration told him there was no available money to pay him and opted to investigate the company themselves.E-mail Michael Clark:Michael.Clark@pressofac.com
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