Tulare hospital district agrees to lease Tulare Regional Medical Center to Adventist Health; hospital settles lawsuit with former medical staff
TULARE – After years of infighting, intrigue and insolvency, Tulare Regional Medical Center got some good news last week.
On June 27, the Tulare Local Healthcare District (TLHD) board of directors voted to exclusively negotiate with Adventist Health to lease the shuttered Tulare Regional Medical Center with plans to reopen the hospital at the end of October.
The 4-1 vote came at the end of a lengthy discussion including presentations by Adventist Health and Community Medical Centers (CMC), which both presented plans for how to reopen the facility.
Adventist Health, which operates a large hospital in Hanford as well as hospitals in Reedley, Selma, Bakersfield and 16 other communities, said its timeline would be to negotiate a lease in the next 30 days, and open the facility in September or October. An initiative will be prepared for voter approval on the November ballot.
“We are grateful to the Tulare board, Citizens for Hospital Accountability and community for their courage and tenacity in getting to this next step in reopening the hospital,” said Andrea Kofl, president of Adventist Health Central Valley Network. “We’re blessed to serve with the Tulare team and eager to see what we accomplish together.”
Community Medical Centers indicated it was not prepared to move so quickly and said its timetable would be to negotiate a lease in the next three to four months, place the ballot measure before voters in the second quarter of 2019 and reopen the hospital in the third quarter of 2019.
The longer timetable to reopen the hospital and the stipulation that voters in Tulare would have to approve a second bond measure to complete construction on the hospital expansion before they would agree to the lease, weighed against CMC in the final decision.
The Tulare hospital district board voluntarily suspended its acute care license in October of 2017 after declaring bankruptcy and learning the former management company planned on closing the hospital. That suspension ends this October, although officials indicated it is possible that could be extended if needed.
Efforts to reopen the hospital as quickly as possible grew more difficult with every day and because the former CEO of the hospital had placed liens on hospital property, blocking any attempts to borrow funds needed to reopen.
TLHD board president Kevin Northcraft said Wednesday’s decision is one of many that will be needed. Adventist and the district need to come up with a contract, the ballot needs to be placed before voters and work needs to be done to the hospital before it can open. At some point, voters will likely be asked to approve a bond in order to complete the construction of the new tower, but Adventist did not have that as a stipulation to its proposal.
Board member Mike Jamaica said he was swayed by Adventist Health’s commitment to opening the hospital about a year sooner than what CMC planned.
“I think the majority would like to see the hospital open as soon as we can,” he said.
Northcraft, after explaining CMC had been a good partner and had showed a willingness to open the hospital sooner, but then backed off that, said Adventist Health will be a good fit.
“Thank God we’ve been able to consider Adventist Health. Thank God they want us,” he said.
Board member Xavier Avila said the risk of having to pass another bond measure before the hospital would open was too much for him. Board member Senovia Gutierrez was the lone negative vote. She pushed for CMC, arguing it provided the opportunity for more services.
Both health care facilities said they would operate the Tulare facility as an acute care hospital with surgery, imaging and emergency services, among others. Dignity Health and Kaweah Delta Medical Center had both expressed an interest in leasing or managing the hospital, but declined to make a presentation. “It’s been a good week for the district,” Avila said. “First we partnered with Adventist Health to help get the hospital reopened. Now with this settlement we’ve taken an important step toward getting our doctors back.”
Avila was referring to the settlement of the Tulare Regional Medical Center Medical Staff’s (MEC) lawsuit against the hospital and its former management company. The settlement concludes a lengthy legal dispute over TRMC’s former board’s violation of the self-governance rights of its medical staff by terminating its duly-elected officers on Jan. 26, 2016, and replacing it with a new medical staff with a different set of leaders and bylaws.
“Doctors make any hospital successful,” Northcraft said. “We are especially grateful for the MEC’s willingness to put the past behind us, resolve this matter and move forward with us toward reopening the hospital.”
This settlement brings back into the fold the medical staff and doctors who served the hospital prior to 2016, which will be necessary to reopen the hospital in the next few months. The previous action was taken by the old board, none of whom serve today. The new board made it a goal to get the suit settled and improve its standing with the medical staff.
“Today’s settlement is a significant victory in protecting the ability of doctors, individually and through their medical staffs, to care for patients in Tulare County,” said California Medical Association (CMA) President Theodore M. Mazer, M.D. “This settlement brings closure to a long legal fight over the improper interference into the physician-patient relationship and the autonomy of a medical staff’s responsibility for medical decision making and peer review. It sends an important message well beyond Tulare, but most importantly, it allows for the Tulare Regional Medical Center to begin the process of reopening its doors to the patients of Tulare County, who have suffered tremendously from its closure.”
The hospital was closed in October 2017 after the newly comprised board filed for bankruptcy protection and a bankruptcy judge ended the contract with the former management company.
“To have a successful reopening, we need our doctors back, and the settlement of the lawsuit with our doctors is a critical step to our reopening. It also reverses one of the horrific mistakes of the former board that led to our hospital’s bankruptcy,” added Northcraft.
Ben Nicholson, an attorney with McCormick Barstow, LLP,which represents the hospital district, said the settlement fully reinstates the medical staff, its bylaws and leadership to how it existed prior to its termination on Jan. 26, 2016.
“The basic idea of the settlement is to restore the status quo that existed before January 26, 2016,” Nicholson said.
Besides restoring the doctors’ privileges and the executive committee, the settlement stipulates that the hospital’s previous board actions violated the medical staff’s right to self-governance.
The lawsuit, filed in 2016, had been heard in 2017 by Superior Court Judge David Mathias, but his ruling was stayed by the bankruptcy filing. The parties’ proposed stipulated final judgment, which found the hospital violated the medical staff’s rights, is included with the settlement and will be sent to Judge Mathias with a request that he enter the judgment.