Two things were made clear during Wednesday’s three-hour-long Tulare Local Healthcare District (TLHCD) Board of Directors meeting: there are now two distinct factions of board members — and they’ve got distinctly different ideas on how to end up with a successful hospital.
The faction of existing board members — comprised of Dr. Parmod Kumar, Richard Torrez, and Linda Wilbourn–continue to trust Healthcare Conglomerate Associates (HCCA) with the management of the hospital’s operations and business decisions, and want to ensure stability and unity around the company’s management operations so that the hospital can qualify for loans that would enable it to finish its tower construction project.
In that vein, the board retroactively approved the $500,000 loan to the Southern Inyo Healthcare District, though members Torrez and Wilbourn said they were not aware of the loan ever being made.
The new faction, comprised of Kevin Northcraft and Mike Jamaica, were recently elected, and Wednesday marked their first meeting. Their self-described platform was to hire outside legal counsel, ensure fairness in the district’s contracts with HCCA, which runs Tulare Regional Medical Center (TRMC) and make the hospital’s operations more open and transparent.
The first goal is, for now, a non-starter. A motion by Northcraft, seconded by Jamaica, to begin the process of hiring outside legal counsel, was voted down by the faction of existing board members.
In addition, Visalia lawyer Michael Lampe revealed that TRMC is financing an appeal of a lawsuit brought by Dr. Kumar and Dr. Benny Benzeevi, the CEO/Chairman of HCCA, against Dr. Abraham Betre–to the tune of $78,603.78.
The $78,000 Lawsuit
Lampe spoke during the public comment section of the meeting, revealing a document–which he had brought on posterboard–that showed a cashier’s check drawn against a TRMC Bank of the Sierra account.
“As I think everybody probably in this room knows, Dr. Betre has won that litigation in the trial. Judge David Mathias ruled against Dr. Kumar and Dr. Benzeevi and ruled in favor of Dr. Betre,” Lampe said. “And now, there’s attorney’s fees that have to be paid to Dr. Betre, and that is being appealed.”
In an August ruling, Mathias found that Kumar and Benzeevi with the hospital were wrong to seek sanctions against Betre, and in a later ruling Mathias found that the officials were not able to seal certain documents, which are available here.
Lampe stated that the payment was to continue an appeal in a private case between Benzeevi and Kumar’s against Betre, which the district had initially put funds towards.
Lampe represents plaintiffs in a suit against the district, arguing that the use of taxpayer funds in the Benzeevi/Kumar/Betre lawsuit constituted an improper use of taxpayer money, since the district was not named anywhere in the suit–essentially using public funds to finance a private lawsuit.
“It shows as the remittor, it shows Tulare Regional Medical Center,” Lampe said. “This is to bond against the appeal in that private litigation for Dr. Kumar and Dr. Benzeevi against Dr. Betre.”
“If the board didn’t take any action on November 30, and the board didn’t take any action on this case in October either, how did Dr. Benzeevi have authorization to use taxpayer funds to bond against that attorney’s fees award? And I think that needs to be answered.”
The matter was not responded to during the meeting.
“Bring It To Us Next Time”
The board discussed, for the first time in public session, the recently revealed $500,000 line of credit that HCCA unilaterally extended to the Southern Inyo Healthcare District.
Even though the move was made as invoices piled up from a major pharmaceutical supplier, Benzeevi said the arrangement was chiefly created to shore-up profits for the hospital, but he said that HCCA would not engage in such an arrangement again.
He said the arrangement allowed the hospital to profit to the tune of $17,958. In addition, HCCA received $3,125 in the form of a fee for guaranteeing the line of credit — that was passed on to TRMC as well.
“Bring it to us next time, that’s all I’m asking, prior to doing something like that,” Torrez said.
“We’ve expressed individually that we do not want any other kind of connection with [Southern Inyo] financially, and I guess the only problem that I had with it,” Wilbourn said, “is that it would have been nice to know that it was going to go ahead.”
Kumar argued that partnering with HCCA gave both the power of thinking–and doing–outside the box.
“The reason for the HCCA or a management company is that they can do these things–without hurting the district,” Kumar said. “It’s not illegal or whatever it is, it is just a pure business decision.”
Jamaica asked whether the agreement should have been brought up to the board, citing Torrez and Wilbourn’s comments.
“I don’t know if it was brought to your attention or if you knew about it, but it was brought up in March, when the loan was made out,” Jamaica said. “And it’s gone that long that none of the board members knew anything about it until we all read it in the newspapers.”
“HCCA does a lot of things out of the box. They are in charge of the operations. We look at the financials, and we look at the bottom line,” Kumar responded. “The board sitting here, we don’t make micro-management of HCCA. We set policies and procedures, which we have, and they go do their business deals.”
Kumar cited, as an example, HCCA’s work with Cerner Corporation, a vendor whose products the hospital has purchased in order to create an Electronic Medical Record system; however, the board has, at various times, voted to approve Cerner contracts and projects.
Wilbourn read from a printed motion–that carried 3-2, Kumar/Torrez/Wilbourn voting yes, Northcraft/Jamaica voting no–that retroactively approved, authorized and ratified the line of credit and its transactions to the Southern Inyo Healthcare District; and, acknowledging its full repayment, cancelling the credit line.
Though Benzeevi stated that HCCA would no longer engage the district’s funds in such arrangements, the motion did not have any content that would expressly prohibit such acts.
“We don’t need to keep talking about it in the papers, we don’t need to keep talking about it in board meetings,” Wilbourn said. “It’s done, it’s over with.”
Separate Legal Counsel Not Needed?
Northcraft attempted to make the case that TLHCD needed separate legal counsel appointed in case it had any conflicts or questions regarding its contracts with HCCA.
HCCA and TLHCD currently share the same legal firm, BakerHostetler–and the need for a separate firm was a no-brainer, Northcraft said. Bruce Greene, of Baker-Hostetler, currently represents both TLHCD and HCCA.
“Mr. Greene has already indicated he cannot advise us on [some] issues,” Northcraft said.
Benzeevi told Northcraft he did not believe separate counsel was needed, describing TLHCD and HCCA as part of the same figurative family and a cooperative relationship.
“In a cooperative relationship, those disagreements are discussed and worked through. It is not about seeing who can do what to the other. It’s about working together to try to make things better,” Benzeevi said.
Northcraft repeated that he had significant concerns about the contract that would require outside counsel.
“When we met with you and your brother Iddo, we made it clear that Iddo would never have a major contract with someone else, and share the attorney,” Northcraft responded. “And he concurred that is just a stupid idea for any agency to do.”
“It’s astounding to me that in one month, there’s so much conflict,” Benzeevi said.
Northcraft proposed that the district publish a Request for Proposals for outside legal groups to represent the district on matters involving the contracts between TLHCD and HCCA. That motion failed 2-3, with Northcraft and Jamaica voting yes, and Kumar, Torrez and Wilbourn voting no.
“We will have to discuss our concerns in a public venue, apparently,” Northcraft said, “because we will have no legal counsel to advise us. That’s very adversarial.”
“Mr. Northcraft, you have been discussing in the public opinion about me and my family for a very long time, so that’s nothing new for me. Nothing changes,” Kumar said.
Northcraft disputed Kumar’s claim.
At the end of the meeting, the board voted to appoint new officers: Wilbourn is now the board president, Kumar its vice-president, Torrez continues as its treasurer, and Jamaica is now the board secretary.
The board will hold a special meeting in the coming weeks to discuss financial statements and to schedule the recall of Dr. Parmod Kumar, the board’s longest-serving member.
According Emily Oliveira, County of Tulare Deputy Elections Supervisor, the board has until February 3 to order the recall election.
Audio from the meeting is available below.