May 2018 file photo of Tulare Regional Medical Center

After the keys to Tulare Regional Medical Center (TRMC) were returned to the Tulare Local Healthcare District in November, the occasion was marked with a “victory lap” by the Board of Directors and members of the Tulare community, in which those present were able to walk through the halls of the hospital for the first time since it closed.

“You know, a lot of communities in the country face catastrophes and they come together,” said Kevin Northcraft, president of the TLHCD Board of Directors. “And they say it takes a village.”

For the current board, the hard work of reopening TRMC is only the beginning, but they have wrested power back from their former management company, Healthcare Conglomerate Associates. In the three years that HCCA held the reigns, critics say the company locked the Board out of the hospital and bled it of its funds.

 

Shut out of TRMC

When the TLHCD signed into a Management Services Agreement with HCCA in May 2014, they signed a contract with many clauses that have drawn the ire of critics. One part of the contract to gain criticism was the barring of the District’s access to hospital grounds and data systems without prior approval by HCCA.

“The District representatives shall not access the hospital and the clinics and other facilities, except upon prior arrangement with [the] manager,” the contract reads. “Except in the event of an emergency.”

Unannounced visits, even by the Board of Directors, meant being escorted from the premises, as was witnessed by Tulare dentist and Citizens for Hospital Accountability member Patricia Drilling.

“We went over to the hospital to post a special meeting… and they went over to post that in the hospital and I went with them,” Drilling said. “A few of us did—and they actually—we had security guards to usher us out.”

HCCA officials also had TLCHD replace its legal representation by Herr, Pedersen & Berglund with attorney Bruce Greene of the BakerHostetler office in Los Angeles, who also represents HCCA CEO Dr.“Benny” Benzeevi.

“Virtually any attorney will acknowledge that this situation set up an obvious conflict of interest as it related to the advice that was being given to the District on an ongoing basis,” said Tulare attorney Dennis Mederos, a Citizens for Hospital Accountability member. “Mr. Greene constantly appeared to be in a position where he had to give advice when the District was in a conflict position with HCCA.”

The Business Journal reached out to Mr. Greene, but has not heard a response.

 

Send in the clowns

As a part of the contract, the TLHCD Board of Directors had to sign a non-disparagement clause with HCCA. This meant the shutdown of all criticism of Benzeevi and his company.

“He would threaten board—Northcraft especially—if he said anything,” Drilling said of Benzeevi. “Once in a while at a board meeting, Kevin would say something just in response that was needling a little bit and Benzeevi would say: ‘Better not do that.’”

The Business Journal reached out for comment to Mr. Greene regarding Dr. Benzeevi’s leadership, but has not heard a reply.

Employees of the District/hospital were also transferred to HCCA. Like the directors, they were reportedly not allowed to speak negatively against their new employers. Those who did risked losing their jobs.

Benzeevi, however, did not hesitate in speaking harshly against past board members and detractors like Deanne Martin-Soares, as was witnessed at a February 2017 board meeting, in which he referred to them as the “charlatans of the past.”

“He had a full power point presentation which he said was property of HCCA… and he had pictures of people that were in our Citizens group that had been former board members and they had been pictured as clowns,” Drilling said. “Deanne was pictured in stockades and people started yelling at him from the audience and he yelled right back, which was Benzeevi.”

Drilling elaborated that the images used were stock photos with the names of the board members beneath the images of clowns and stockades. Martin-Soares said that she had brushed off the insult, more bothered when Greene personally emailed her a letter.

The letter, dated March 9, 2016, brought up Martin-Soares’ financial records, citing troubles she had in the past.

“In light of your own history of personal and business financial failures, coupled with your apparent lack of knowledge of the basic facts concerning current Hospital operations, the Board cannot give any credence to your accusations or insinuations,” the letter said. “We would expect that once your fellow community members learn the true facts, they won’t give your e-mail any credence either.”

The e-mail in question was one by Martin-Soares in February 2016, which criticized operations at the hospital.

 

Financial concerns

A number of issues have been raised regarding TRMC’s finances. This included a management starting $225,000 per month. This amounts to $3 million for the first year.

“That was one of our points that we always brought up was, then they’d say: ‘Well, they’re producing returns, so how can you argue with it?’” Drilling said.

Critics, however, argued that the returns were not all they seemed. Over time, the hospital saw a sharp decline in patients and it has been argued that the profits shown by HCCA were the results of the hospital no longer paying vendors.

One such vendor was Firstsource Solutions USA, a health care service company. In July 2015, they filed a lawsuit for more than $700,000 in the California Eastern District Court in Fresno against the hospital. Adding on interest and attorneys’ fees, the total proof of claim for the suit at the end of last September was $1.4 million.

“There’s also an issue where they said they had 550 employees, but HCCA collected 130 percent of payroll,” Drilling said. “So what we were hearing is that people were there, but they were just sitting around because there was nothing to do. One, the volume was down and two, there were too many employees there.”

The organization has also taken notice of the apparent lack of budget accountability with HCAA leadership and the old Board of Directors.

“At the time, when you saw board meetings, it seems as though there was very little dialogue, very little asking questions,” Martin-Soares said. “And then obviously when Kevin Northcraft and Mike Jamaica were elected, they started asking questions and quickly what they did is they moved the financials to quarterly instead of monthly.”

Towards the end of HCCA’s management, employees’ paychecks also started to bounce. Before this, Martin-Soares added that 401k payments also started bouncing and COBRA insurance for employees was also cut off. This meant the cancellation of continued health coverage for employees after being let go.

Eventually, TRMC went into bankruptcy. In October 2017, the TLHCD Board of Directors was able to break away from its contract with HCCA and the hospital closed its doors temporarily the same month. Officials at TLHCD are now working to reopen it.