Broward Health Commissioner Miguel Fernandez said he was surprised to learn a South Florida prosecutor has opened a criminal probe into an alleged conflict of interest between Fernandez’ board job and his full-time position as a sales manager with a vendor that sells equipment to the hospital district.
Ongoing investigations bog down Fla. system
“That’s news to me,” Fernandez said.
Word of potential disruption at Broward Health could hardly be news to the Fort Lauderdale community at this point, with investigations, lawsuits and attempts to get officials fired occurring in recent weeks.
The Fernandez case is now the fourth ongoing criminal investigation in the Broward County state attorney’s office involving current or former commissioners and employees at the publicly owned hospital district. Assistant State’s Attorney David Schulson confirmed all four open investigations last week.
The four-hospital district, the seventh-largest public hospital system in Modern Healthcare’s rankings (June 8, 2009, p. 26), also has a contract with a law firm to investigate a pattern of alleged Stark law violations, Fernandez confirmed. And two former lawyers for the district have filed federal whistle-blower lawsuits claiming they were wrongfully fired for bringing ethical and legal concerns to light, including the alleged Stark violations. The district is countersuing one of the litigants, former General Counsel Marc Goldstone.
On advice of legal counsel, system President and CEO Frank Nask declined to grant an interview about the ongoing criminal investigations or ethics complaints, but said in a written statement that he was not aware of any alleged Stark law violations involving physicians.
Meanwhile, one of the district’s commissioners, Robert Bernstein, had placed a discussion item on the district’s Jan. 27 public meeting agenda to consider firing Nask because of his job performance amid recent ethical and legal developments. That meeting was never held for lack of a quorum.
Bernstein no longer can pursue the matter. On Jan. 28, he and other members of the seven-member board were replaced by four new commissioners appointed by Gov. Charlie Crist. And last week, Patrick Maloney, the CEO of Broward Health’s 182-bed Coral Springs Medical Center, announced he would resign at the end of the month to pursue “other opportunities in healthcare.”
“If you worked at that hospital district, you would be amazed that it is functioning quite nicely and delivering care. But it’s a horrible distraction and a bit of an embarrassment to read everyday that something goofy is going on at the corporate offices,” said Joseph Truhe Jr., a healthcare lawyer working of counsel with Waller Lansden Dortch & Davis in Nashville, and a former associate general counsel at Broward Health.
Truhe, however, is no dispassionate observer. He’s one of the two whistle-blower litigants, and claims in his lawsuit that he was fired for raising concerns that the hospital was paying physicians above-market rates in exchange for referring patients to Broward hospitals, which, if true, could violate the Stark law.
The hospital district argues in legal filings that Truhe and the other whistle-blower litigant, Goldstone, were both fired because neither was admitted to the Florida bar. Truhe and Goldstone say hospital officials were aware of their status with the Florida bar before they were hired, and that they had planned to use an exception to the rules that would have allowed them to temporarily act as “authorized house counsel” without local bar admission until they could take the Florida bar exam. (May 18, 2009, p. 4)
Schulson, the prosecutor, said Truhe and Goldstone are both under investigation over allegations of practicing law without a license.
Goldstone, in his federal lawsuit against the district, says the reasons he was fired include voicing his concerns about how Commissioner Joseph Cobo allegedly used his position to reward or punish clients and potential clients of his outside physician consulting firm.
Cobo is the subject of the fourth, and the longest-running, ongoing criminal probe by Schulson. The district spent more than $100,000 to have an outside investigator look into the Cobo allegations and produce a report, which contained enough evidence that the board sent the report on to Crist’s office for further consideration last summer.
On Feb. 5 of this year, the Florida Commission on Ethics received a request from the district to investigate whether Fernandez’ employment as a general manager for sales in Latin America and Europe for Bothell, Wash.-based SonoSite violates state laws prohibiting an official from serving on a public body that does business with a company in which he has a private interest. Broward Health buys SonoSite’s hand-held ultrasound equipment, according to public records.
Graham Cox, senior vice president for international business at SonoSite, said the firm does not believe Fernandez is violating the conflict of interest laws, and he noted that Fernandez himself requested the advisory ethics opinion after Bernstein raised the issue on the board.
John Joseph, a partner with Philadelphia law firm Post & Schell, said in general that conflicts of interest by healthcare board members can often be managed by disclosing financial interests and abstaining on votes that could affect them.
Records on file with the Broward County Supervisor of Elections show that Fernandez disclosed his employment with SonoSite in July 2009.
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