St. Luke's Magic Valley Regional Medical Center has sued a Washington attorney who once represented the hospital in an ongoing dispute, saying the attorney did not adequately defend against claims of Medicare fraud and other alleged improprieties.

The complaint, filed Jan. 17 in U.S. District Court in Boise, claims that Tom Luciani intentionally breached his fiduciary duty and committed professional malpractice while representing the hospital and Farmers Insurance between July 2003 and early 2006. Luciani was brought on by the insurance company to represent the hospital during litigation that started in 2001 with a tort claim against the hospital by two former employees.

According to court documents, Cherri Suter and Mindy Harmer came on board at then-Magic Valley Regional Medical Center in October 2000 after the hospital acquired their business, Cornerstone Therapy LLC. The LLC operated the hospital's pediatric therapy program and also provided separate speech therapy to a number of other clients in the region.

The two reported what they described as improper Medicare billing and record-keeping practices in the hospital's transitional care unit and adult outpatient clinic, and were fired by the hospital in March 2001, according to court papers. Hospital officials said the pair used hospital resources for their own business, a claim the pair's lawyers said was simply a pretext for the firing.

The pair filed a tort claim against the hospital in June 2001, and the matter moved to federal court in Boise in June 2003, with Suter and Harmer claiming violations of the federal False Claims Act in their firings.

According to the hospital's most recent court filing, Luciani had a longstanding relationship with Farmers, which brought him in to replace another lawyer when the case moved to federal court. Following the desires of the insurance company, the complaint states, Luciani's strategy focused on protecting Farmers from any damages while leaving the hospital open to a possible $22 million judgment.

After the hospital discovered Luciani had no plan to produce an expert witness to counter testimony from a plaintiff's witness it hired its own counsel in 2006 - Chicago-based McDermott, Will and Emery LLP, one of the largest law firms in the country.

That firm, the complaint states, helped discredit the plaintiffs' witness and also commissioned an audit of the hospital's payments to fight the billing charges.

The hospital requests a jury trial and seeks to recover what it paid McDermott - some $4 million and rising. It also names two law firms as defendants. Both are based in Spokane, and each represents elements of the single firm that had employed Luciani. He is employed at Stocker, Smith, Luciani and Staub PLLC, one of the surviving firms.

Reached there by telephone Thursday, Luciani said he was aware the hospital was litigating the issue with Farmers, but did not know about the most recent filing naming him as a defendant. Representatives from Farmers could not be reached last week.

"It seems to be yet another tactic on the hospital's part," Luciani said.

St. Luke's Magic Valley spokeswoman Jody Tremblay declined further comment on the suit Thursday, saying the case was "very complex" and still in litigation. She said she does not know if Farmers still insures the hospital.

According to the Jan. 17 complaint, the hospital's 2006 audit failed to find "statistically significant" violations in its Medicare payments in 2000. It could not be determined Friday whether Medicare officials had ever requested their own audit of the payments.

The dispute between the fired therapists and the hospital remains active, said Newal Squyres, Suter and Harmer's attorney with the firm Holland and Hart in Boise.

Nate Poppino can be reached at 735-3237 or npoppino@magicvalley.com.