Healthcare Conglomerate Associates’ (HCCA) days in Tulare are numbered, some three years after the company entered into a contract with the Tulare Local Healthcare District.
Hon. Judge Rene Lastreto ll ruled Wednesday that the company’s contract with the district could be rejected and terminated as soon as an alternate management company was lined up; or, alternatively, on November 27.
Finding An Alternative
If a management alternative isn’t found by the 27th, the hospital could temporarily suspend its license, as the California Department of Public Health has previously stated that any management of the hospital must be approved by the department first.
As of October 19, the department hadn’t received an application to manage Tulare Regional Medical Center from any company.
Craig Rust, an attorney for the California Department of Public Health (CDPH), had previously stated that any application may take “a few days.”
The current leading alternatives for a management company in Tulare would be a partnership between Community Medical Centers and Sante Health, both of Fresno.
Under a plan submitted to the bankruptcy court — though deemed insufficient by CDPH — the partnered companies would attempt to hire existing staff and providers, and work to ensure adequate staffing.
“We are going to do what’s in the best interest of the patients of the district,” Dr. Benny Benzeevi, HCCA’s CEO, told the Voice after the ruling
He declined to comment further.
Mike Jamaica and Xavier Avila, members of the district’s board of directors, were at the hearing.
“We’re going to serve the people of the district as they deserve to be served,” Avila said. “[The order] exceeded what we had hoped.”
Both Avila and Jamaica stated the board would attempt to bring the hospital’s employees — currently those of HCCA — back to the employment of the hospital district. HCCA currently employs approximately 525 employees to work at Tulare Regional Medical Center.
“We will be asking employees if they would like to re-submit applications,” Jamaica said.
The judge in the case dismissed many of the arguments from Healthcare Conglomerate Associates’ attorneys, Mark Levinson and Hagop Bedoyan, before making his final ruling.
The company had stated that the board members had a clear agenda when they were elected to remove HCCA by any means necessary — and that the rejection of the contract was thus a business decision made in bad faith.
“If the court assumes all of that,” Lastreto asked, “is pursuing an agenda by an elected official capriciousness — and does that make a decision unsound?”
It did not, he stated.
“The consequences of the board’s decision belong to the district’s electorate,” he stated.
“Sound business judgement,” he continued, “does not mean perfect business judgement.”
Lastreto stated that although the contract was rejected, that would not preclude the company from seeking its termination fee as an unsecured claim in bankruptcy court.
He also noted that while the contract isn’t up until the 27th, HCCA could unilaterally exit their obligations sooner.
“If HCCA chooses not to perform, it’s up to them,” he said.
The Tulare Local Healthcare District’s board of directors will meet Wednesday, Oct. 25 at 6:30pm for a regularly scheduled board meeting.