Fresno County Supervisor Garry Bredefeld is sounding off on the alleged kickback scheme that led to Community Health System accepting a $31.5 million from the Department of Justice to settle legal violations.
New CEO Craig Wagoner also issued a message to all employees saying Community did not meet the standards that it holds itself to. Wagoner also claimed that the allegations made in the complaint by the whistleblower were not completely accurate, but he did not provide any specifics.
Driving the news: Community agreed to pay $31.5 million on Wednesday to resolve allegations that physicians were getting extravagant kickbacks to refer patients to Community.
- Community and Physician Network Advantage Inc. (PNA), an affiliate of Community, allegedly provided executives and physicians with cash, expensive wine, cigars, strip clubs, trips with private planes and other benefits in exchange for referrals.
- Some of the allegations included former Community CEO Craig Castro taking a trip to Paris with his family, which PNA paid $63,000. The claims also detailed allegations of Community executives having trips to Las Vegas strip clubs paid for.
- Much of the claim revolved around PNA’s north Fresno office, known as HQ2, which included a state-of-the-art wine and cigar lounge with $750,000 to $1.2 million worth of alcohol on hand. Community allegedly used HQ2 to recruit physicians to join their networks and had them make reservations to HQ2 for free food and alcohol.
What he’s saying: “The corrupt conduct exhibited by Community Health System and the Community affiliate Physician Network Advantage, Inc. (PNA) is disgraceful and shameful,” Bredefeld said. “They violated the trust of their patients by providing extravagant benefits and kickbacks to executives and some physicians in order to entice them to refer their patients to Community.”
- Bredefeld said the medical community already lost the confidence and trust of the public with their mishandling of the COVID-19 pandemic, “and now this corruption has been exposed which will further diminish the trust.”
- “I applaud the DOJ for their work and ensuring that there now will be greater oversight of these institutions so this corruption never occurs again,” Bredefeld said.
Wagoner’s message: Wagoner, who has been on the job since early February, sent a message to employees on Wednesday after the settlement was announced.
- Wagoner said his most important responsibilities as CEO are to ensure that the healthcare provider carries out its mission to better the lives of those it serves and to do so with integrity, accountability and transparency.
- “I want to be clear that this situation is not related to patient care, nor does it reflect our current business practices. More than a decade ago, Community established a vendor relationship for the installation and implementation of Epic in physician practices,” Wagoner wrote. “Community was among the early adopters of electronic health records, enabling patients throughout the region to benefit from coordinated care using health data that could be accessed regardless of where they received care. While we are confident our vendor successfully fulfilled its role of managing a complex, multi-year rollout of a new EHR system across multiple physician practices, we now realize that we could have had more careful oversight of its operations.”
- Wagoner said Community was informed of the complaint nearly three years ago and began an internal review. Former PNA controller Michael Turpening filed the complaint as a qui tam claim in December 2019.
- “Although the whistleblower complaint included overly broad claims and inaccuracies, as a result of this issue, we’ve improved monitoring around vendor activities, oversight of their expenses, as well as compliance with all federal requirements,” Wagoner said. “We are confident that no patients were inappropriately billed in connection with this issue. However, we ultimately agreed to a financial settlement to conclude the U.S. Attorney’s investigation and move forward.”
- He continued, “I know that news like this is discouraging. Any potential threat to the trust in our system and the patient care we provide is, for me, personally disheartening. The financial settlement, particularly during an uncertain time, is difficult. However, we will press forward, learning from this situation while intently focused on making sure that Community Health System remains a strong, stable partner to the communities we serve and an outstanding workplace for all of you.”
Zoom in: While Castro was accused of being one of the executives to take extravagant trips on PNA’s dime, he left Community just months before the allegations were made public.
- Castro started with Community in 2002 and was named as CEO in 2020, succeeding former longtime CEO Tim Joslin. Both Castro and Joslin were named as defendants in the complaint.
- Community announced Castro’s retirement last November, with him officially exiting earlier this year.
- At the time, Community Board Chair Roger Sturdevant praised Castro for making his mark on the region’s healthcare system, including his work to launch Community Provider Network, which now includes around 500 providers.
