Rocky Mountain News (Denver, CO)

August 16, 2002

HEADLINE: NURSING COMPANY GETS SUED; NEW YORK HOSPITAL SAYS DENVER FIRM OVERBILLED MILLIONS

BYLINE: Michael Perrault

U.S. Nursing Corp., an 18-year-old Denver company that provides temporary nurses to hospitals nationwide during strikes, is being sued by a nonprofit New York hospital claiming it was overcharged millions of dollars.

"We are pursuing every dollar that we feel we have been overcharged," said Stephen Majetich, chief financial officer of Nyack Hospital in Rockland County, N.Y.

Administrators at the 332-bed hospital allege U.S. Nursing overcharged for replacement nurses during a six-month strike in 2000, according to a lawsuit filed in U.S. District Court in New York.

Executives at U.S. Nursing did not return phone calls Thursday. Nyack Hospital also has sued its former chief financial officer, Eric Broder, who has since joined Fastaff, U.S. Nursing Corp.'s nurse-staffing subsidiary, also based in Denver.

That lawsuit alleges that Broder told the hospital board the cost for the replacement nurses would be $3 million instead of the $19 million that was charged. Broder, in turn, is suing the hospital, alleging it owes him money never paid for consulting services.

The hospital hired U.S. Nursing in 2000 to supply workers after about 450 registered nurses walked off the job. It turned into a bitter labor dispute that lasted nearly six months.

Nyack Hospital's strike-related costs account for at least $19 million of the hospital's $34 million deficit, according to a report by Ernst & Young.

Privately held U.S. Nursing is often at odds with nursing organizations, which say it undermines nurses' efforts to improve working conditions and makes it possible for hospital management to prolong labor disputes, said Mark Genovese, a spokesman for the New York State Nurses Association.

U.S. Nursing typically pays all expenses to fly registered nurses into strike zones, house them and, if need be, bus them to hospitals under armed guard.

The staffing company gets paid a premium for its efforts, charging up to three times the regularly budgeted payroll for nurses. In turn, it pays nurses above-average wages and bonuses.

U.S. Nursing temporarily filled about 8,000 nursing jobs during fiscal 2002, pulling from an active database of 29,000 nurses, company officials said. The company's annual revenues have grown from $44 million in 2000 to about $230 million.