Employees at Tulare Regional Medical Center may not receive a paycheck on their scheduled pay date for the second time in a row, some employees of the hospital have told the Voice.
While employees’ normal pay date would be Thursday, October 12, employees told the Voice a meeting was called by Healthcare Conglomerate Associates (HCCA), the hospital’s contracted administrators, in which they were told their pay date would likely pass without a check in hand.
During the previous pay period, many employees were told the same thing, though they ended up receiving checks the following day.
In the meeting, held Monday, employees were told that their pay date would be indeterminate, one employee, who wished to remain anonymous, said.
That employee described hospital units that had decreasing number of patients, and similarly decreased levels of staffing.
“It seems as though the staff is starting to dwindle,” the employee said.
Another said that they were told “as the money trickles in, they will try to pay the employees.”
Additionally, the Tulare Local Healthcare District’s board of directors voted during an emergency board meeting to reject Healthcare Conglomerate Associates’ contract to run the hospital.
“The Board unanimously has authorized bankruptcy counsel to proceed with the rejection of the District’s contracts with Healthcare Conglomerate Associates, LLC and to do whatever is necessary to effectuate the rejection of the contracts and ensure the ongoing and continuous operation of the health care facilities,” a statement from Kevin Northcraft, the board’s president, read.
Ironically, such a move is itself a violation of the Management Services Agreement, the contract between Healthcare Conglomerate Associates and the district.
“In the event that the District becomes a debtor under the Bankruptcy Code, the District agrees, to the extent permitted under applicable law: (a) not to reject this Agreement; (b) to designate Manager as a vendor supplier that is critical to the District’s business and obtain a critical vendor order that (x) waives or releases any preference liability; and (y) provides administrative priority or other preferred status, acceptable to Manager, with respect to Manager’s pre-petition claims,” the contract reads.
The district’s bankruptcy judge would need to approve any rejection of the hospital’s contracts; and, if such a rejection is approved, HCCA could still be entitled to any damages for breach of contract. Those damages would be treated as lower priority, unsecured claims.
Additionally, all of the employees working at the hospital are currently employed by HCCA: the Management Services Agreement mandated that the district transferred all of its employees to the company.
The meeting was called as an “emergency board meeting,” a meeting which may only be called under specific circumstances, such as a “work stoppage, crippling activity, or other activity that severely impairs public health, safety, or both, as determined by a majority of the members of the legislative body.”
It was held at 4pm at the legal offices of Horswill, Mederos, Soares & Ormonde in Tulare.
Northcraft declined to comment beyond the statement provided to the Voice, which was issued to multiple local media outlets.
Dr. Benny Benzeevi, CEO of Healthcare Conglomerate Associates, did not return a request for comment. If one is received, this article will be updated.