- 68 -
c. Coordination of Activities of Redlands Hospital and
the Surgery Center
In arguing that it plays an active role in the conduct of
the Surgery Center’s activities, petitioner cites a number of
ways in which Redlands Hospital has integrated its activities
with those of the Surgery Center since the General Partnership
acquired its interest in the Operating Partnership. These
include Redlands Hospital’s use of the Surgery Center as a site
for training and surgeon proctoring, as well as various other
cooperative training and educational activities between Redlands
Hospital and the Surgery Center.19
Although there may be cooperation between the Surgery Center
and Redlands Hospital, nothing in the record suggests that these
various cooperative activities are more than incidental to the
for-profit orientation of the Surgery Center’s activities. Cf.
Harding Hosp., Inc. v. United States, supra at 1075-1076
19 The administrative record contains unexplained
inconsistencies regarding certain of these training procedures.
On the one hand, a letter in the administrative record, dated
Nov. 23, 1994, from Ernst & Young to respondent’s representative,
cites laproscopic cholecystectomy (gall bladder surgery) as an
example of a new procedure that Redlands Hospital was extensively
involved in teaching to physicians using the Surgery Center. On
the other hand, an affidavit of Gary J. Cottingham, president of
RHS and Redlands Hospital from Sept. 22, 1987, to May 12, 1995,
states that SCA Centers requested that the Surgery Center begin
to perform outpatient cholecystectomies at the Surgery Center,
but that the General Partnership’s managing directors rejected
the proposal. Mr. Cottingham’s affidavit states: “At least
through May 1995, * * * Outpatient cholecystectomies were not
performed at [the Surgery Center].”
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