[A]s Springfield Hospital begins a contract with Quorum Health Resources to understand its financial woes, the hospital’s physicians and staff are sharing concerns about Quorum’s financial mismanagement and lawsuits.
Quorum, the Tennessee-based company that manages about 200 hospitals in 38 states, and its parent corporation, have faced numerous lawsuits over the past two decades for negligence, fraud and secrecy.
“We’ve been wondering — were they picked on purpose?” asked Springfield physician assistant Cary Stratford.
In 1997, Emanual County Hospital Authority alleged Quorum Health Group altered Emanual’s financial statements to show a $196,000 profit instead of the hospital’s actual $1.1 million loss.
In 2000, Quorum Health Group and its subsidiary, Flowers Hospital in Dothan, Alabama, paid the government $18 million to settle claims that it defrauded Medicare by inappropriately charging the health care system between 1988 and 1998. One improper charge included rent for a building owned by the former CEO, according to a U.S. Department of Justice press release.
Quorum agreed to pay another $428,000 to the government in 2002 after inappropriately charging Medicare for employee salaries of people who did not work for the company.
Springfield Hospital hired Quorum Health Resources after doctors, employees and community members said the hospital was about a year behind paying bills. But some wonder how one struggling company can help the other.
“They’re exactly like Springfield,” said one physician who asked not to be identified out of concern for possible retaliation. “This is an internal coup and nothing has changed.”
Attempts to reach the Springfield Medical Care Systems board and its spokesperson were not successful.
Quorum spokesperson Rosemary Plorin said Quorum is under different leadership now.
“That’s 20-year-old information,” she said of the previous charges. “That’s old news.”
However, the company and its subsidiaries continue to face lawsuits.
Quorum Health Resources is a subsidiary of Quorum Health Corp., which owns about 27 hospitals. Investors filed a lawsuit against the company in 2016, alleging Quorum provided false and misleading public statements and failed to disclose that its hospitals were underperforming.
The lawsuit alleges the company lied about its public statements to boost revenue.
The corporation reported a third quarter loss of $53.9 million, up from $29.2 million reported in the same period last year. Net losses total $179.5 million so far this year—more than double last year’s $87.4 million.“It doesn’t sound like a very good choice,” said John Bond, a former Springfield physician assistant and Springfield resident.
Springfield Hospital’s three-month contract with Quorum began Dec. 4. Quorum will conduct an evaluation of the hospital’s operations, finances and strategic direction. It will also help Springfield find a new management team.
“Like many rural health care organizations in Vermont and around the country, we are facing challenges created by a declining population, rising costs, below-cost reimbursements from payors, and an increase in the number of patients who are unable to pay for care,” said Springfield Medical Care Systems chair George Lamb in a press release Dec. 19. “The board remains committed to securing SMCS’ financial future while maintaining – and improving – its high level of quality and service.”
Quorum has 21 hospital clients in the northern region. It has worked with Gifford Medical Center in Randolph for about 16 years and managed Northwestern Medical Center in St. Albans for about 30 years.
Despite concerns, Northwestern board President Leon Berthiaume praised Quorum.
“We have been well-served by Quorum and we’ve had no reservations with what services they’ve provided to Northwestern Medical Center,” he said.
Quorum helped Northwestern hire CEO Jill Bowen about nine years ago. Bowen, a Quorum employee, said she speaks with Quorum’s executive team monthly to discuss quality and financial outcomes.
“They’re really responsive to the needs of our hospital,” she said. “They take the time to understand exactly what we want.”
However, Northwestern and Quorum have also faced serious allegations in Vermont.
Raymond Long, a former orthopedic surgeon at Northwestern, accused Quorum and Northwestern of knowingly contaminating five of his patients with a life- and limb-threatening bacteria while he was employed there from 2001-04.
Long said just before the contamination was discovered, NMC personnel were aware he was planning to build an MRI machine for his office, which could put him in “direct economic competition” with NMC, according to court documents.
The lawsuit was settled for $4 million in 2008.
Tom Huebner, the former CEO of Rutland Regional Medical Center, who Gov. Phil Scott tasked with assisting Springfield Hospital, wasn’t concerned about Quorum’s reputation.
Huebner said he’s worked with Quorum on statewide issues in the past. He praised the company for working “tirelessly” at Springfield Hospital through the holidays.
“I couldn’t be more happy with the quality of work they’ve done,” he said. “We’re trying to understand the current situation accurately so we’re making good decisions.”
Huebner said Quorum has recommended a new interim CEO and CFO for Springfield Hospital after CEO Tim Ford and CFO Scott Whittemore abruptly resigned within a week of each other.
Interim leaders will be announced this week, he said.
“They are a very well-regarded company,” Huebner said. “They come with lot of experience.”
