491182 

IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

THE CHESTER COUNTY HOSPITAL 

 v. 

INDEPENDENCE BLUE CROSS, 

QCC INSURANCE COMPANY, 

KEYSTONE HEALTH PLAN EAST, and 

KEYSTONE MERCY HEALTH PLAN 

NO. 02-CV-2746 

DEFENDANTS’ REPLY MEMORANDUM IN SUPPORT OF THEIR 

MOTION TO COMPEL PHOENIXVILLE HOSPITAL TO 

PRODUCE DOCUMENTS

Defendants, Independence Blue Cross, QCC Insurance Company, Keystone Health Plan 

East and Keystone Mercy Health Plan (collectively “IBC”), respectfully submit this reply 

memorandum in support of IBC’s motion to compel Phoenixville Hospital (“Phoenixville”) to 

produce documents. 

I. PHOENIXVILLE CONTINUES TO WITHHOLD 

DOCUMENTS FROM IBC 

Although Phoenixville has suggested that IBC’s Motion to Compel is moot, this is simply 

untrue. Phoenixville represented that it would produce all documents responsive to IBC’s 

subpoena by October 17, 2003. See Exhibit “K” attached to Response of Phoenixville Hospital 

to Defedants’ Motion to Compel. Phoenixville has not kept that promise. The deficiencies that 

remain after Phoenixville’s assorted piecemeal productions prove IBC’s assertion that an Order 

to compel production remains the only way to ensure Phoenixville’s compliance with IBC’s 

subpoena. 

Phoenixville told this Court that, after “the penultimate document production,” a “small 

number of remaining documents” would be produced on October 17, 2003, thus completing the 

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491182 2

hospital’s production. See Response of Phoenixville Hospital to Defendants’ Motion to Compel, 

at 1. Following its “penultimate document production,” Phoenixville belatedly produced three 

more installments of documents. The first two installments were produced on Monday, October 

20, 2003—one set in the morning and one in the evening. Phoenixville’s (presumably) final 

installment came on October 23, 2003. 

As of this writing, Phoenixville’s production is deficient as follows: 

(1.) Strategic business plans—generally and by service line—and any plans to 

expand or cut services from 1998 to 2002. 

Phoenixville produced various strategic planning documents for individual service 

lines—mostly from 2000 to 2002. However, IBC still requires the strategic plans by service line 

for 1998 to 2000. Likewise, Phoenixville produced its Hospital Strategic Plans for periods 

starting in 2002 and 2003 (UPHS 03538 — 03678; UPHS 12034 — 12045), but has not 

produced the plans for periods starting in 1998 through 2001. 

(2.) All Phoenixville cost containment reports, in electronic format, from 1998 to 

the present, including submissions to the Pennsylvania Healthcare Cost Containment 

Council (PHC4). 

Phoenixville has not produced this information. IBC requires that Phoenixville produce 

all cost containment reports submitted to the Pennsylvania Healthcare Cost Containment Council 

(PHC4). To the extent that Phoenixville has produced some files, in electronic format, 

containing monthly submissions to the Delaware Valley Healthcare Council for 2001 and 2002, 

IBC also requires that Phoenixville produce these same types of files, in electronic format, for 

1998 through 2000. 

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(3.) Phoenixville’s summary and executive level budgets and financial statements, 

including by department and service line, for each year from 1998 to present. 

Phoenixville has produced sections of some financial statements from 2000 to 2002 

(UPHS 09221 — 09268). However, Phoenixville has not produced statements for 1998 and 

1999. Further, given Phoenixville’s prior broad objections, it remains unclear whether the 

financial statements are complete in any respect, even for the years provided. Notably, 

Phoenixville has failed to produce any of the demanded budgets. 

(4.) Phoenixville’s summary and executive level analysis of profitability by 

healthcare insurance payor. 

Phoenixville has produced a significant amount of material pertaining to its internal 

analysis of its profitability regarding IBC, and to a lesser extent Aetna. However, Phoenixville 

has failed to produce this type of analysis for any other healthcare insurance payor. 

(5.) Phoenixville’s utilization rates, including by line of service, for each year 

from 1998 to the present. 

Phoenixville has produced files, in electronic format, containing monthly submissions to 

the Delaware Valley Healthcare Council for 2001 and 2002 that include utilization rates. 

Phoenixville has failed to produce these same types of files for 1998 through 2000. 

(6.) Phoenixville’s patient counts including: inpatient admissions, outpatient 

admissions or visits, births, and patient days, for each year from 1998 to present. 

Phoenixville has not produced this information in a coherent and compete manner for the 

entire time period. Phoenixville produced this data for 2002 in a Microsoft Access file labeled 

“IBCFY2002.mdb.” IBC requires Phoenixville to produce, in similar electronic format, its files 

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for 1998 through 2001. Phoenixville has also produced no information related to outpatient 

visits for any years. 

(7.) Phoenixville’s average length of stay for each year from 1998 to the present 

for the following lines of service: cardiovascular surgery, obstetrics, emergency services, 

and oncology. 

Phoenixville has produced files, in electronic format, containing monthly submissions to 

the Delaware Valley Healthcare Council for 2001 and 2002 that include some average length of 

stay data. However, these files do not contain average length of stay for cardiovascular surgery, 

emergency services, and oncology. IBC requires Phoenixville produce these same types of files 

for 1998 through 2000 and other files sufficient to show average length of stay for cardiovascular 

surgery, emergency services, and oncology for 1998 through 2002. 

(8.) Phoenixville’s total costs of providing services by DRG code, for each year 

from 1998 to the present. 

Phoenixville has not produced this information in a coherent and compete manner. 

Instead, it has produced disjointed, incomplete and—without more—useless shards of 

information. 

II. THE COURT SHOULD COMPEL THE PRODUCTION OF DOCUMENTS 

IBC SEEKS, AND PUNISH PHOENIXVILLE FOR ITS RECALCITRANCE 

Phoenixville’s failure to produce the documents in question is inexcusable. Phoenixville 

has stated that it no longer objects to IBC’s document requests andthat it was about to produce 

fully responsive documents to IBC. Yet, Phoenixville repeatedly has failed to produce the 

promised documents. IBC submits that it is now indisputably clear that, despite its multiple 

promises, Phoenixville will not fully comply with IBC’s subpoena without an Order from this 

Court. The Court should not only compel Phoenixville to produce the documents IBC seeks, it 

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should also order Phoenixville to reimburse to IBC the costs and fees incurred in prosecuting the 

instant Motion. 

III. CONCLUSION 

For the foregoing reasons, IBC respectfully requests that the Court grant this Motion and 

compel Phoenixville to produce the documents demanded by IBC’s subpoena within ten (10) 

days of the date of this Order, certify that its production is complete, and pay to IBC reasonable 

attorneys’ fees and costs incurred in the preparing, filing, and presenting of this Motion. 

Respectfully submitted, 

OBERMAYER REBMANN MAXWELL & HIPPEL LLP 

BY: 

THOMAS A. LEONARD 

PAUL S. DIAMOND 

WILLIAM J. LEONARD 

WILLIAM K. PELOSI 

H. DAVID SEIDMAN 

One Penn Center, 19th Floor 

1617 John F. Kennedy Boulevard 

Philadelphia, PA 19103 

(215) 665-3000 

HOWREY SIMON ARNOLD & WHITE LLP 

JOHN DeQ BRIGGS 

JAMES G. KRESS 

1299 Pennsylvania Avenue, N.W. 

Washington, DC 20004 

(202) 383-7015 

Attorneys for Defendants, 

Independence Blue Cross, 

Keystone Health Plan East, 

QCC Insurance Company, and 

 Keystone Mercy Health Plan 

Dated: October 28, 2003

Case 2:02-cv-02746-JP Document 147 Filed 10/27/2003 Page 5 of 6
491182 

IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

THE CHESTER COUNTY HOSPITAL 

 v. 

INDEPENDENCE BLUE CROSS, 

QCC INSURANCE COMPANY, 

KEYSTONE HEALTH PLAN EAST, and 

KEYSTONE MERCY HEALTH PLAN 

 CA No. 2:02CV2746 

 

 

CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing Defendants’ Reply Memorandum in Support 

of Their Motion To Compel Phoenixville Hospital To Produce Documents was served, this 28th

day of October 2003 as follows: 

VIA HAND DELIVERY

John M. Myers, Esquire 

Montgomery McCracken Walker & Rhoads 

123 S Broad St 

Philadelphia, Pa 19109 

Counsel for Phoenixville Hospital 

VIA HAND DELIVERY VIA FACSIMILE & FEDERAL EXPRESS

Lewis R. Olshin, Esq. Richard A. Feinstein, Esquire 

Duane Morris, LLP Daniel A Kotchen, Esq. 

One Liberty Place, Suite 4200 Boies, Schiller & Flexner, LLP 

Philadelphia, PA 19103-7396 5301 Wisconsin Avenue, N.W., Suite 800 

Counsel for Plaintiff, Washington, DC 20015 

Chester County Hospital Facsimile No. (202) 237-6131 

 Counsel for Plaintiff, 

 Chester County Hospital 

 PAUL S. DIAMOND 

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