By Deb Murphy
The management company, Healthcare Conglomerate Associates, has been removed from Southern Inyo Hospital accounts by a Fresno court and the hospital will be filing a supplement brief next week to sever the contract.
“When we saw the board action at Tulare, we saw they had the same bad fiscal problems we had,” said SIH board chair Richard Fedchenko. Those problems included cash flow issues and massive loans. “We saw the pattern and started to look to see what to do as a result.”
To add to the mix, the board had had requests for financial records ignored. Once the records were handed over, the reason behind HCCA’s reluctance became obvious. The management group was, in essence, playing fast and loose with SIH and Tulare funds.
According to the brief filed with the Fresno court, district monies were transferred out of SIH accounts with no reason given or board approval. A $700,000 payment was made against HCCA’s line of credit to the hospital but bank records indicated the line of credit at the time was zero. One of the primary sources of SIH’s operating funds is Intergovernmental Transfers through the Prime program. In essence, the hospital pays in X amount and receives back twice X in federal funds. HCCA failed to make that initial payment, costing the hospital hundreds of thousands of dollars. After reviewing the financial records, it was apparent Tulare owed SIH more than $400,000.
It was also apparent during SIH board meetings dealing with a broken CT Scanner that CEO/CFO Alan Germany, an HCCA employee, was more interested in the financial implications than the need for the vital diagnostic tool.
To make matters more dire, Tulare District Attorney issued a search warrant on SIH Tuesday. The purpose—to determine if property belonging to Tulare ended up in Lone Pine. They left only with files downloaded to a couple of thumb drives according to an article in the Valley Voice.
Fedchenko relayed the update from the SIH parking lot, after securing a short-term $650,000 loan from the Inyo County Treasury Oversight Committee to pay for the Scanner and electronic medical record software. During the phone interview, he was watching the Scanner delivered to the hospital.
“We worked hard to get the hospital in a position to access the Treasury funds,” said Fifth District Supervisor Matt Kingsley. “I’m proud of this board. They’ve shown leadership far beyond what is normal.”
There are significant differences between the Lone Pine and Tulare hospital. Staff at Tulare are employed by HCCA and leased to the medical center; staff at Lone Pine are paid by SIH. While Germany will disappear if the bankruptcy court allows SIH to sever ties with HCCA, associate administrator Brian Cotter will stay. “He’s experienced and has worked at a high level,” Fedchenko said.
Community members who attended a day-long meeting in January 2016 may remember board member Mark Lacey say “this is not a decision I would make for my own business.” That statement came as the then three-member board had to make a quick decision to contract with HCCA or let the hospital be closed down with little hope of getting it re-opened.
“We didn’t have time to do our due diligence,” Fedchenko said. “It’s different now. We understand more. At the time, we couldn’t even have afforded to file for bankruptcy.”