Tulare Heads Back to Court Today, Could Partner with Community Medical, Sante Health

Tulare Regional Medical Center could be managed on an interim basis by Sante Health and Community Medical Centers, both of Fresno, according to legal filings from the Tulare Local Healthcare District. But that’s only possible if a bankruptcy judge allows the district to reject its contract with Healthcare Conglomerate Associates (HCCA) at a hearing Thursday afternoon.

The district will head back to court seek a judge’s approval to reject the contract with the company.

If the judge doesn’t allow the rejection of the contract, one consultant for the district states that it could be forced to temporarily close the hospital.

“While this is not the ideal option because it results in the temporary closure of the hospital, which is not what the Board or the public wants,” Richard Gianello, a consultant with HFS/Wipfli LLP, stated in a legal filing, “it may be the only option if HCCA’s contract is not rejected and/or it continues to refuse to work with the [district] in transitioning out.”

HFS/Wipfli is a consulting firm retained by the board to assist in transition away from HCCA and toward a new management firm.

In opposition filings, officials with HCCA state that the board’s declaration of fiscal emergency was made in bad faith and that the board is using bankruptcy as a way to get out of the multiple contracts prior board members signed with the company.

HCCA’s opposition filing also claims that Citizens for Hospital Accountability, the group which has endorsed Kevin Northcraft, Mike Jamaica and Senovia Gutierrez — the majority of the board — has materially harmed the district and attacked its “perceived enemies” through “falsehood, innuendo, and name-calling.”

Dr. Benny Benzeevi, HCCA’s Chief Executive Officer, has claimed that calls have been made to the office of Rep. Devin Nunes impersonating his wife, and that unknown person(s) have called the hospital claiming that the,“Federal Attorney General is coming.”

Community, Sante, and Interim Management

Community Medical Centers and Sante won’t come in unless HCCA is out, Gianello writes.

“HCCA has suggested and alluded to its intent to sue for tortious interference any company who attempted to provide services to the [District]. Selection of CMC and Sante Health as interim manager is the preferred avenue for the District as it could potentially keep the hospital operational and may provide a good basis on restructuring the hospital with an eye towards increasing revenue and profits,” Gianello writes.

In exhibits included with his declaration, the district’s transition plan is made clear: use “unencumbered buildings and land” as collateral for a loan with Community Medical Centers.

Community would finance the hiring and payroll of staff and providers “for the first 30-60 days.”

The district would work to ensure that existing staff was employed with the new CMC/Sante/TRMC partnership, and utilize staffing agencies if there is not enough staff.

It would also work to “recruit providers who historically used TRMC back to TRMC,” likely including physicians who previously left the hospital after the prior board voted to disassociate with the prior medical executive committee, an issue still under review in the Tulare County Superior Court.

Gianello also states that HCCA’s contract is “not in line with the fair market value of comparable services being provided.”

“HCCA is considerably over market with price and is unfavorable to Debtor from a price perspective,” Gianello claims. “In addition, since HCCA is paid a 30% markup of employees compensation there has been no incentive to operate the hospital at an appropriate staffing level due to the substantial reduction in occupancy and utilization of hospital services that has occurred over the past year.”

Anonymous employees have previously claimed to the Voice that the hospital has been overstaffed for the level of patients being seen.

HCCA: Board’s “Game Plan” To Claim Bankruptcy Is Only Option

The management company’s legal filings claim that a group of “dissident physicians” actively back Citizens for Hospital Accountability and the Tulare board’s efforts.

“When the MSA was signed, I had personal knowledge of the fact that there was a powerful physician group which sought to control the Hospital and its finances which, if achieved, would permit them to operate the Hospital as if it were an extension of their private pracitces,” Benzeevi wrote in a declaration.

HCCA’s focus was on the “larger interest of the Hospital rather than those physicians’ financial interests,” Benzeevi wrote, causing those physicians to turn against the hospital; he further claims that the physicians turned “even more completely against HCCA” after the board voted to disassociate with the prior medical executive committee.

The company’s opposition, written by Marc Levinson, an attorney for HCCA, claims that the district’s board acted imprudently, capriciously and in bad faith in moving to reject the company’s contracts and declare a fiscal emergency.

“The Board cared only to advance the politically charged environment it had fostered over a two year period to terminate the District’s relationship with HCCA,” Levinson wrote. “In doing so, it ignored all of HCCA’s efforts to get the District on sound footing and instead rushed to file for bankruptcy.”

Credit Extended from HCCA

Benzeevi’s declaration also elucidates prior reporting from the Visalia Times-Delta on promissory notes which, at the time of publication, were seemingly signed by Benzeevi on behalf of the district to pay his own company.

Benzeevi lays out a list of numerous “requests for funds,” funding requests allowed under the Management Services Agreement. If the district could not provide HCCA the funding, the district would issue promissory notes “for funds advanced by HCCA for ongoing District operations.”

Some of these were previously mentioned by the Visalia Times-Delta in a September 15, 2017 report.

One promissory note provided by Benzeevi as an example differs from documents received by, and published by, the Times-Delta.

A request for funds for December 21, 2016, was provided to the court by Benzeevi and to the Times-Delta in a prior Public Records Act request.

Benzeevi’s copy includes a note from Dr. Parmod Kumar, the former Vice-Chairman of the Board, and states that the district must provide funds by 7am December 21.

“The District is unable to advance the funds at the this time,” Kumar notes, signing the document with his name and position.

The copy provided to the daily paper under the Public Records Act doesn’t include Kumar’s signature, and appears to include a digital approximation of Benzeevi’s signature. Benzeevi’s copy of the note appears to be written on paper and scanned.

It also lists a different time for payment due: 7pm on December 21.

The Potential Loans

Legal filings from both sides reveal the loans that Alan Germany, CFO of HCCA, and Benzeevi previously claimed were available.

MedEquities Realty Trust and Leasing Innovations are the two companies that engaged in discussions with the two HCCA officials.

Correspondence with the two companies and HCCA are dated in August. Members of the board voted July 27 to rescind HCCA’s approval to seek and execute loans; because there was controversy over Senovia Gutierrez’ status on the board, HCCA did not consider the July meeting a valid, legal, or binding meeting.

In June, the Tulare board authorized HCCA to seek and execute a loan to fund operations. In July, Kevin Northcraft, Mike Jamaica and Senovia Gutierrez voted to rescind that authorization. HCCA officials stated that Gutierrez was not a board member, as even though she was elected, the board had not announced her seating. In August, HCCA officials prepared documents stating that they were authorized to proceed with the loan based on the June authorization.

Much more was available about a potential loan with Leasing Innovations.

The company had previously filed a universal commercial code lien against the hospital, pursuant to a “State and Municipal Lease-Purchase Agreement No. HGF070117.”

The documentation made available shows the same agreement number in the paperwork described by HCCA as a potential loan, includes signed paperwork, and a first invoice.

Benzeevi did not return a request for clarification on the status of the potential Leasing Innovations loan.

The loan would have provided $7,000,000 in funding across 72 payments of $121,600; totalling $1,755,200 in interest across the life of the loan.

Scant documentation was made public in filings regarding the MedEquities loan.

A letter of intent, dated September 25, 2017, states that MedEquities was ready to provide HCCA with “an immediate combined $20,000,000 capital funding,” comprised of a $8m “bridge mortgage loan” and a $12m “acquisition/leaseback” of the Evolutions building.

“I personally, along with my staff, am ready to meet in Tulare in the coming weeks with [Benzeevi and Germany] and your team to discuss and help facilitate a right-sized capital funding/facilities development structure (in a potential combined capital amount up to $100 million from MRT),” William C. Harlan, MedEquities president, wrote.

Harlan stated that his funding would ensure that the tower project would be completed and “bolster and enhance the Hospital’s current cash position.”

TLHCD: “While HCCA May Be Unhappy With The Loss of A Cash Cow..”

“While HCCA may be unhappy with the loss of a cash cow, this is not the test for rejection,” the district’s attorney wrote in response. “This decision is supported by sound business judgement and the Contract should immediately be rejected.”

“After HCCA threatened to shut down the hospital and reported. For the first time of the dire financial condition of the hospital, and it was out of money, the Board had no choice but to seek Chapter 9 protection,” the filing continues.

The filings also mention recent revelations that the Southern Inyo Hospital was served with a search warrant by members of the Tulare County District Attorney’s office, and claims by the Southern Inyo Healthcare District that its money was transferred to and from its accounts to Tulare.

“Based on HCCA’s actions and the new revelations of financial mismanagement, the public has lost any confidence it may have had in the services and operations of HCCA, as reflected by the number of patients who are utilizing the hospital,” the district’s filing states.

The district also claims that the company threatened to shut down the hospital on multiple occasions.

One threat to close the hospital is seen in documents filed by the management company.

“Without the District providing clarity as to how it will fund the payroll, HCCA will have no choice but to dismiss its employees at the end of the present payroll cycle at 12:01am on Saturday, October 8,” Levinson wrote in an email to Riley Walter, the district’s bankruptcy attorney. “HCCA will continue to honor its obligations under the MSA to continue to manage operations after the closure of the Hospital.”

The district and HCCA will be back in court on October 19 at 2:00pm in Courtroom 13 of the US District Court, 2500 Tulare St, Fresno.

In Depth: Tulare Regional Medical Center

22 thoughts on “Tulare Heads Back to Court Today, Could Partner with Community Medical, Sante Health

(Commenter ID is a unique per-article, per-person commenter identifier. If multiple names have the same Commenter ID, it is likely they are the same person. For more information, click here.)

  1. Welcome CMC
    Best choice we could have.
    Sante not so much.
    I guess they will try to keep us dependent on them so that Sante could expand its business here.
    Oh well, anything to get the e vil out of Tulare.

  2. Not sure Sante is best option, would like to see what they presented to consultants thay was so impressive. Did KDDH back out of their offer to help

  3. Benzeevi is such a liar and a joke! Someone impersonated his wife and called Devin Nunez?!? Maybe he should approach the people who run Drain The Swamp to see who’s really responsible for that garbage. Does he really think that will make him hold on to his ridiculous contract?!?!!! Lies? They worked before with a crooked incompetent board, but not now Benny. Especially considering lawyers for the board, bankruptcy, and now the DA has real facts, I’m really hoping the judge sees through HCCA’s lies. I particularly am glad that the DA is finally in support of removing this parasite from the hospital and terminating the contract. It’s really about time!

  4. Benzeevi said : “The Board cared only to advance the politically charged environment it had fostered over a two year period to terminate the District’s relationship with HCCA,” Levinson wrote. “In doing so, it ignored all of HCCA’s efforts to get the District on sound footing and instead rushed to file for bankruptcy.”

    If the thief Benzeevi had paid the water or electric bill, or if he had paid the vendors and employees, or if he had not flooded the district with law suits from people wanting to get paid, or if he had shared some financial information, maybe the board would not have had to “rush” into filing for bankrupcy.
    The statement about “two years’ is also a lie (but what else you expect from scumbag Benzeevi?), the direction of the board changed only a couple of months ago.
    Hopefully, eventually, there will be investigation, prosecution and jail time for embezzlement, for both Benzeevi and Germany, and maybe Kumar too.

  5. Agree with previous posting. Sante is not good and tied up with other problems in Fresno. I guess they need a new fresh market. Well there’s a new sucker born every day. I suppose any body is better than what we have now. Maybe what we need is a first rate urgent care clinic and just send the more complex patients somewhere else, cant make money on that stuff anyways. Maybe its time to rethink if we really need a hospital at all in the same model as we have had. We have private lab, pharmacy, doctor and walk in clinics, xray lab etc already in Tulare.

  6. I don’t understand the negativity toward Sante. They are one of the most stable healthcare management companies in the Valley. Their leadership is superb and very respectable. As a Sante HMO patient I have been very pleased with the customer service and navigation for my families healthcare needs. My doctors office is managed by Sante and I have nothing but good things to say about them.

  7. I agree with Kris. I am also a Sante HMO member and our family has received excellent care and service at our doctor’s office that is managed by Sante. They must be doing something right. They have been around a long time and continue to grow.

  8. TRMC would be well served by CMC and Santé. The management teams of those two organizations have done phenomenal work to improve CMC’s performance & its physician network over the past 15 years or so. They are the best combination of local resources that TRMC could have hoped for. Negative comments above regarding Santé are unfounded. The truth is that Santé provides a wealth of valued administrative & advisory services to a very large number of physicians, physician groups & organizations in the Central Valley.

  9. My mother was a patient and were treated both at Clovis Community Medical Center and CRMC. She received wonderful care even though she is s Med-Cal patients. The care was wonderful both the doctors and the nurses. The providers were from Sante and they really did not make us feel like second class citizen even the reimbursement from Medi-Cal is so low. Tulare will be fortunate to have partners like these entities to serve your population.

  10. people let’s keep our eyes on the ball. Any selection is temporary, so let’s see how this plays out before knocking down anyone willing to step in this mess.

    Besides we still need to get HCCA out before anyone will come in

  11. The comments above are really incorrect. Sante has been around for over 20 years. They have grown while other physician groups have gone out of business. Sante will help save TRMC!!. They have personally helped me in some very serious medical times of need. I was at a crossroad and stand still. I made one call to the admin team and will be forever grateful. From my General Doc to my Urologist.. They are all managed by Sante. Nothing but Stellar care and ease.

  12. I was born in TDH and now live in Fresno. I’d love to see the hospital succeed. Sante and Community have excellent reputations in Fresno. If they can help in Tulare then God bless them.

  13. I too am confused with the negativity about Sante. I agree with the previous post from Kris. My family and I have been in the Sante system since 1995. We have received nothing but the best care from our primary doctors and the specialists we have seen.
    I received help just last week from Sante’s customer service department. They were incredibly helpful. When I called the main number, A real live person actually answered the phone and was extremely pleasant. I highly recommend Sante!!

  14. My wife has had multiple spinal related issues and the doctors offices and the care that she has received has been nothing but spectacular. The offices have been staffed by Sante for years with no problems. I feel that Sante’s long reputation and service speak for itself.
    If TRMC needs help, then let someone with experience and know how do the job better.

  15. Looking at the complaints against Sante it seems to be more with how they treat their employees rather than the quality of care they give.

  16. Sante and Community Medical Centers are great for Fresno and Tulare would be lucky to have them. 6 years ago my wife was diagnosed with stage 3 lung cancer. With their help she is now cancer free.

  17. I have been reading this thread this afternoon and really felt good about my job when I saw Sante patients writing in comments about their positive experiences. I am a Sante employee and would like to comment about the post from Tulare. As a Sante employee I can tell you that Sante treats its employees very well. I have been working for Sante for 20 years and wouldn’t look anywhere else. We are treated like family members. Even though we have grown, the family environment has not changed. I’ve been offered other jobs with competitors and would never leave the environment we have here. I am so happy to hear the positive comments from our patients. You are why we do what we do!! Thank you!!

  18. Who will feel threatened by Sante are physicians that don’t want competition. We deserve better than that. Let Tulare thrive.

  19. As a cancer survivor I have seen more Drs than I can count. I purposely chose Sante Drs because of the excellent reputation they have in the valley. I received the best treatment and they are the reason I am still here today. I have absolutely no regrets and would highly recommend Sante. I hope that Tulare gets the opportunity to experience the wonderful care and service they provide.

  20. Truth16, you are so correct. Ask the right questions about quality standards, HEDIS scores, re admission rates, c-section rates, prescribing practices on narcotics, immunization rates, care and practice for chronic disease, patient satisfaction scores etc.. these are fundamentals that were not in place with the previous physicians who are no longer at TRMC. If you have a chance to re-start, don’t go backwards.

  21. I think Sante’s and CMC’s involvement with Tulare Regional would be great. I have gone to Sante physicians for years and just this past year have enrolled in their HMO plan. On top of that, I just recently had a procedure at Clovis Community and had a great experience from beginning to end. I’ve had nothing but success with both organizations and am impressed with their stability and growth. Their involvement could only help TRMC in my opinion.

Use your voice

Your email address will not be published. Required fields are marked *