Lawsuit: Corrupt giveaway at Broward Health to cost $2.5 billion over 25 years

By Dan Christensen, FloridaBulldog.org 

Fort Lauderdale’s Broward Health Medical Center, flagship of the North Broward Hospital District.

A corrupt deal at Broward Health that “gave away” the public hospital district’s radiation business for treating cancer patients is costing the troubled public hospital system an estimated $100 million a year in revenue.

That stunning allegation about taxpayer-supported Broward Health’s 25-year contract with 21st Century Oncology is contained in an amended complaint in the federal whistleblower case brought by former Broward Health chairman David Di Pietro and unsealed last week.

Florida Bulldog reported in February 2016 that Gov. Rick Scott had a financial interest in 21st Century when Broward Health’s board awarded it the unprecedented 25-year, no-bid contract to provide radiation oncology services at the district. Republican Scott, who as governor appoints Broward Health’s board, was then an investor in a private-equity firm that owned 21st Century.

“Under the terms of the original deal over the course of a 25-year contract, [former Broward Health President/CEO Frank] Nask gave away in excess of $2.5 billion in potential revenues to 21st Century Oncology with a potential profit margin in excess of $500 million,” says the complaint.

“In return, Broward Health would receive annual lease payments from 21st Century for the radiation equipment and hospital space. The lease payments totaled approximately $880,000 a year.”

The original length of the contract is for 10 years, with an option for the company to extend the contract three times for five-year periods.

Gov. Scott’s appointments ‘controlled’

According to the complaint, Nask accepted kickbacks delivered by the governor’s friend, 21st Century’s Fort Lauderdale lobbyist William “Billy” Rubin, to make the deal happen. The complaint says Rubin “controlled” the governor’s appointments to Broward Health’s board.

Lobbyist William “Billy” Rubin, left, and Gov. Rick Scott

Following the board’s approval of the contract in January 2012, 21st Century contributed nearly $400,000 to Gov. Scott’s re-election campaign, Florida Bulldog previously reported. The company likewise gave generously to the Republican Party of Florida.

Nask did not respond to an emailed request for comment. Rubin did not respond to a message left at his office.

The governor’s office released this two paragraph statement:

“Neither the Governor’s office nor the Governor are named as a party in this lawsuit, which was filed against a private company four days after Mr. Di Pietro resigned from the board in April 2016. Governor Scott has acted to make sure that the North Broward Hospital District is accountable to the taxpayers they serve and will continue to do just that.

“In fact, after Governor Scott took office in 2011, he put all his assets in a blind trust so they would be under the control of an independent financial professional. As such, the Governor has no knowledge of anything that is bought, sold or changed in the trust.”

The governor’s statement is at least partially incorrect, however. The trustee of the governor’s blind trust is Hollow Brook Wealth Management, a New York firm whose chief executive is Scott’s longtime business crony, Alan Bazaar.  Further, U.S. Securities and Exchange records show that Gov. Scott personally filed required reports disclosing large stock sales while those securities were in the “blind trust.”

The amended complaint has not yet been filed in the whistleblower case now before Fort Lauderdale U.S. District Judge Kathleen Williams. It was, however, filed last week in federal bankruptcy court in New York, where Fort Myers-based 21st Century is seeking to reorganize and shed more than half of its $1.1 billion in debt.

21st Century announced its voluntary filing for Chapter 11 bankruptcy protection in May in the wake of declining revenues and two expensive settlements with the Justice Department of alleged Medicare billing fraud in 2015 and 2016. The total cost of the settlements: $54.5 million.

Lawyers for Di Pietro, appointed by Scott to Broward Health’s board in September 2011, filed the amended complaint as part of an adversary action in bankruptcy court that asks the court to declare that, unlike 21st Century’s other debts, Di Pietro’s whistleblower action under the federal False Claims Act should not be discharged by the court.

The whistleblower suit

The lawsuit against 21st Century and 100 “John Doe” defendants seeks to recover money wrongfully billed to Medicare, Medicaid and other federal healthcare programs. Federal prosecutors recently declined to intervene in the case, but are keeping a careful watch on developments. Di Pietro stands to receive a substantial reward if his lawsuit leads to any recovery.

Kickback schemes traditionally involve payments that are doled out to facilitate an illicit scheme. But the alleged kickback scheme described in the complaint does not involve cash-stuffed envelopes.

Rather, the lawsuit contends that lobbyist Rubin told CEO Nask that if he supported approval of 21st Century’s contract, the governor would appoint board members who would protect his job, $680,000 annual salary and pension.

Nask allegedly accepted Rubin’s offer and later paid what the complaint calls “hush money” to buy the silence of the operators of another cancer care company, HealX, that Nask pushed out to pave the way for 21st Century. In all, the lawsuit says, Nask authorized the payment of $830,000 to Heal X and Dr. Anurag Agarwal.

Nask did not tell the board about the kickbacks that induced the deal or his hush-money payments, and led the board to believe that HealX had quit, the complaint says. Further, Nask “obscured” financial information about the deal, including “major losses” and the fact that the contract let 21st Century “bill, collect and keep all global revenues associated with outpatient radiation oncology services” – a “major change in the billing arrangement” for the district’s oncology services, the complaint says.

Broward grand jury hears first witnesses in criminal probe of Broward Health

By Dan Christensen and Buddy Nevins, FloridaBulldog.org 

Broward State Attorney Michael Satz Photo: Tom Tracy, Florida Catholic

A Broward grand jury began hearing testimony Wednesday about alleged criminal conduct at long-troubled Broward Health, the taxpayer-supported public medical system for the northern two-thirds of the county.

A panel of 18 grand jurors were on hand to examine potential criminal violations of Florida’s Government-in-the-Sunshine Law and state ethics laws by the seven-member commission appointed by Gov. Rick Scott that runs the health-care agency.

The grand jury may also take a broader look at Broward Health, which has been buffeted by allegations of mismanagement and insider dealing for years. Grand jurors have the power to recommend changes in the system’s governance and have done so with various governments in the past.

“I decided our office should focus on possible Sunshine Law violations and related matters that had come to our attention,” said Broward State Attorney Michael Satz.

Office spokesman Ron Ishoy indicated that grand jury testimony would reach into many areas of the public health-care system.

“We are in the midst of a wide-ranging investigation,” he said.

News of the county grand jury’s probe comes amid an ongoing federal grand jury’s look at suspicious purchasing practices at Broward Health. Florida Bulldog reported in February 2016 that the federal grand jury has subpoenaed Broward Health’s records about former procurement officer Brian Bravo and 16 companies, including MedAssets, a publicly traded, Georgia-based group purchasing organization.

‘No overlap’

Satz was reluctant to convene a grand jury on Broward Health last year because he felt that it might duplicate or get in the way of the federal investigation. On Tuesday, he indicated that was no longer an issue. “There continues to be good cooperation between the investigative agencies involved and no overlap,” Satz said.

Former Broward Health General Counsel Sam Goren entering the grand jury room on Wednesday. Photo: Florida Bulldog

Grand jury proceedings, both federal and state, are secret. Wednesday morning, however, subpoenaed witnesses began showing up outside the grand jury’s new home — Courtroom 10175 on the 10th floor of the new Broward County Courthouse Tower.

The kickoff witnesses were Broward Health’s former general counsel Sam Goren and ex-board chairman David Di Pietro. Goren, accompanied by his colleague attorney Jacob Horowitz, testified for an hour and 15 minutes. Di Pietro testified for nearly two and a half hours. Neither man would discuss his testimony nor disclose what matters he was asked about.

Appearing to testify in the afternoon were Pam Hatfield, senior executive secretary to Broward Health’s president/CEO, and former Broward Health Commissioner Maureen Canada.

Investigators led by Assistant State Attorney Tim Donnelly, chief of the office’s Public Corruption/Special Investigations unit, brought nine boxes of documents with them to the grand jury room. Accompanying Donnelly at yesterday’s proceedings were prosecutors Whitney MacKay and Chris Killoran.

Broward corruption prosecutor Tim Donnelly outside the grand jury room on Wednesday. Photo: Florida Bulldog

Broward Health is an independent special district whose legal name is the North Broward Hospital District. It operates four hospitals, including its flagship Broward Health Medical Center in Fort Lauderdale, and additional urgent care and outpatient centers.

The governor appoints a board of commissioners that runs the district and levies property taxes to help support its mission, which includes providing treatment for indigent patients. The board has seven seats, but two are currently unfilled. All five commissioners are Republicans appointed by Gov. Scott.

Di Pietro blows whistle

Di Pietro filed a federal whistleblower suit last year shortly after he quit the board. The lawsuit was unsealed late last week, and Florida Bulldog reported Monday that it contains a number of politically explosive allegations about insider influence, including kickbacks and “hush money” payments at Broward Health that reach up to the governor himself.

Former Broward Health chairman David Di Pietro exiting the grand jury room on Wednesday. Photo: Florida Bulldog

Prosecutors have fielded numerous complaints about the governance of the public-health system during the past 18 months. At least two of the complaints involve the controversy swirling around the hiring of Interim President/CEO Beverly Capasso.

One complaint alleges Capasso, who was a Broward Health commissioner at the time, violated Florida ethics laws when she voted to give herself her current job. Florida law on voting conflict states that “no county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss.”

The CEO job pays Capasso $650,000 annually. A search for a permanent chief executive is underway.

Another allegation is that board members discussed hiring Capasso in private, thus breaking the Sunshine Law, which requires most public matters to be discussed in the open.

An abrupt hiring

She was hired suddenly as CEO during a May 8 Broward Health Commission meeting. Before the vote, fellow board members did little questioning of her background, her health care experience or how she would approach the job. Because of the lack of meaningful debate at the meeting when Capasso was hired, the move appeared preplanned.

After her hiring, information about Capasso’s background surfaced that was never publicly discussed before she was hired. The Sun-Sentinel reported that Capasso held a master’s degree from an unaccredited mail and online university that a federal investigator called a diploma mill during congressional testimony.

Broward Health Interim President/CEO Beverly Capasso talks with Commissioner Christopher Ure after Monday’s board meeting. Photo: Florida Bulldog

Gov. Scott appointed Capasso, a registered nurse whose experience included a stint as chief executive of Jackson Memorial Hospital, to Broward Health’s board in October 2016.

Another complaint filed with the State Attorney’s Office alleges that Broward Health Commissioner Christopher Ure used his position to get an investigator to threaten his mistress.

“I filed the complaint and went in to talk to Tim Donnelly about it. Donnelly told me they were going to hold a Grand Jury concerning Broward Health” but gave no timetable, community activist and blogger Dan Lewis said.

Lewis outlined his allegations in an Aug. 21 post on his Broward Health Blog.

WestonGuy954

“Christopher Ure and Jane Doe met online late in 2015.  He used ‘Guy Weston’ and ‘WestonGuy954@gmail.com’ as his online profile (clever, he lives in Weston and he’s a ‘guy’).  He also used an anonymous Google voice number 770-580-4009 to keep his communications secret,” Lewis wrote.

Lewis posted pictures that Ure allegedly texted the woman, including one he described as taken outside his daughter’s school play.

Dan Lewis

Late last year, Ure and the woman had a falling out.  She felt she was jilted and tried to contact Ure’s wife and Ure’s minister, Lewis wrote. Then one day she received a call from a private investigator trying to warn her off.

“As you know, um, our friend has a very important job and I, uh, look out after these guys so you can look it up,” the investigator said in a message that was recorded and given to Lewis.

The investigator worked for a law firm that in the past had sued Broward Health for malpractice.

Lewis complained to the State Attorney’s Office that Ure received “a favor” because he was a Broward Health commissioner involved in a lawsuit with the investigator’s employer. If proved, such a favor would constitute unlawful misuse of public office.

Ure did not return phone messages requesting comment.

Tools for change

Grand jury reports can be powerful tools for change, but their success has been mixed in Broward.

In 2009, grand jurors recommended tougher regulation of pain clinics that had proliferated in Broward, where 33 of the nation’s 50 leading dispensing physicians of Oxycodone were then located. The report helped bolster the argument that stricter laws were needed, and Tallahassee acted.

Repeated examinations of the Broward schools construction practices by local and state grand jurors failed to produce the same results.

In 1997, the grand jury blasted the Broward public schools for shoddy construction and overspending. But as a 2002 grand jury report noted, it changed nothing.

A 2015 report from the State Attorney’s Office again slammed the School Board for not following earlier grand jury recommendations, including those by a statewide grand jury.

Attorney General Bondi gives Broward Health deep discount in fraud settlement

By Dan Christensen, FloridaBulldog.org 

Florida Attorney General Pam Bondi

Eighteen months ago, the office of Florida Attorney General Pam Bondi demanded Broward Health pay more than $5.3 million to settle state Medicaid fraud claims uncovered during a federal whistleblower probe that cost Broward Health $69.5 million.

On Monday, Broward Health’s commissioners gleefully approved paying instead $1.5 million to settle with the state.

“Obviously we would have preferred zero, but we need to get this behind us and have it over done,” said Commissioner Linda M. Robison, the board’s secretary/treasurer.

Commission Chairman Rocky Rodriguez called the settlement payout “a drop in the bucket.”

No explanation was given to explain the deep discount that Broward Health got.

Florida Bulldog reported the state’s claim on Broward Health in March 2106 after Bondi’s office released a copy of the state’s demand letter in response to a public-records request.

The precise amount originally sought was $5,325,671, which Assistant Attorney General Jill Bennett informed Broward Health’s lawyers “represents damages recoverable under the Florida False Claims Act.

“This settlement demand amount is based upon (the) North Broward Hospital District having entered into financial relationships with physicians that violated the Physician Self-Referral Law, the Florida Anti-Kickback Statute, Florida statutes and the Florida False Claims Act,” Bennett’s letter said.

The North Broward Hospital District is Broward Health’s legal name.

Scheming to defraud

The letter accused Broward Health of scheming to defraud Medicaid with nine of its doctors who had been given improper and illegal contracts. The various contracts were in force for between six and 14 years. The doctors named in the letter were George Caldwell, Michael Chizner, Violeta McCormack, Hector Rodriguez-Cortes, Rudolph Roskos, John Rozanski, Ashok Sharma, Erol Yoldas and Shazia Zafar.

Coincidentally, commissioners on Monday renewed for two years Broward Health’s employment agreement with Dr. Rodriguez-Cortes. Rodriguez-Cortes is the Medical Director for pediatric hematology oncology services at the Salah Foundation Children’s Hospital at Broward Health Medical Center in Fort Lauderdale.

The state’s allegations mirrored the federal Medicare/Medicaid fraud case against Broward Health.

Broward Health General Counsel Lynn Barrett announced the settlement at Broward Health’s regular board meeting. “We thought this is a very, very good settlement,” she told commissioners while recommending they approve the deal.

Negotiations that led the state to significantly discount its own claim also put an end to concern that the state might go through with its threat to sue in Leon County Court and seek treble damages and civil penalties of not more than $11,000 for each false claim that Broward Health submitted.

Florida and the federal government share the cost of the state’s Medicaid program, which provides medical coverage to low-income individuals and families.

Broward Health data breach released patient information to tax fraud ring

By Dan Christensen, FloridaBullog.org bhmcentrance

For the second time in three years, a data breach at Broward Health has caused the release of personal patient information in what one district executive called “a ring of thugs.”

Broward Health disclosed the breach on its website last month, saying it was advised by “law enforcement authorities” on May 12 that “patient information was discovered at an individual’s home during a routine investigation.”

Broward Health’s internal investigation later determined the sensitive patient information “was taken from Broward Health Imperial Point” in Fort Lauderdale by “an unidentified individual.”

The stolen information were hospital Facesheets that contain a patient’s full name, date of birth, address, phone numbers, Social Security number, primary insurance provider, insurance guarantor, reason for visit, emergency contact/next of kin information.

“The data removal is believed to have occurred between November 2011 and March 2012. We have notified 126 former patients or their listed next of kin of the privacy breach by mailing a letter to their last known address on September 23, 2016,” Broward Health’s disclosure said. “We also offered them an identity theft protection service at no cost.”

No explanation was given for the gap in time between the breach and the date it was discovered. Broward Health, however, said it has completed its internal probe and is “reviewing and enhancing safeguards to better ensure the security of patient information.”

Doris Peek, Broward Health’s senior vice president and chief information officer, said the breach is the latest in a series of data thefts at Florida hospitals, including Fort Lauderdale’s Holy Cross, Hollywood’s Memorial Regional and the University of Florida’s Shands Hospital in Gainesville.

‘Busted last year’

“This ring of thugs got busted last year,” said Peek. “They send in tax information to the IRS about persons to get their tax refund. They targeted the older and sick population.

Peek said the identity theft ring has paid hospital registrars, among the lowest paid of hospital workers, to provide them with printed copies of the Facesheets.

Police in Coral Springs, responding to a domestic violence report, found the Broward Health Facesheets, and turned them over to Broward Health’s security department, said Peek.

Broward Health disclosed a larger data breach in 2013 at Broward Health Medical Center, the hospital district’s flagship in downtown Fort Lauderdale. That time Broward Health sent letters to approximately 960 former patients notifying them of the breach involving their personal information.

Again the breach involved misappropriated Facesheets. However, Broward Health managed to identify the culprit as “an employee who no longer works at the hospital.” The ex-employee was not named. The breach was said to have occurred between October and December 2012.

In September 2013, Holy Cross notified 9,900 former patients that a former employee had wrongly accessed their personal information. CBS Miami reported then that an investigation by the hospital found “the employee may have wanted the information to file fraudulent tax returns.”
Holy Cross suffered another breach in 2010 when an identity theft ring obtained emergency room files to steal Social Security numbers and other information of about 1,500 patients, according to a report in the Sun-Sentinel. Four people were arrested, including an emergency room employee.

In 2012, Memorial Healthcare System notified about 9,500 patients of an investigation into two ex-employees who improperly accessed patient records. The former employees were apparently using the private information in those records to file false tax returns, according to a story at the time by Modern Healthcare.

Report: Taxpayer-supported Broward Health engaged in ‘cultural civil war’

By Dan Christensen, FloridaBulldog.org bhcompliance2

The law firm that’s overseeing taxpayer-supported Broward Health’s compliance with conditions imposed by the U.S. last year when it paid $70 million to resolve alleged lawbreaking has concluded the troubled hospital district is in a state of “cultural civil war.”

Baker Donelson was hired in December to serve as the “Independent Review Organization” (IRO) under the terms of a five-year Corporate Integrity Agreement between the North Broward Hospital District (NBHD) – Broward Health’s legal name – and the U.S. Department of Health and Human Services.

The IRO’s 137-page annual report, obtained by Florida Bulldog using Florida’s Public Records Law, lays out what it says are Broward Health’s “numerous systems deficiencies” while also defending itself from anonymous, yet widely distributed accusations that it was not truly independent and was hired thanks to insider connections.

The report, often citing unnamed sources, is highly critical of Broward Health’s recently departed Chief Compliance Officer Donna Lewis for refusing to produce, among other things, requested information about employee complaints. Also singled out for criticism: Broward Health’s Interim CEO Pauline Grant and Chief Information Officer Doris Peek, who, along with Lewis, are accused of planting “negative articles regarding the IRO in the local media.”

Former Broward Health Chief Compliance Officer Donna Lewis

Former Broward Health Chief Compliance Officer Donna Lewis

Grant and Peek both denied the accusation on Sunday. “I never planted any negative articles,” said Grant. Lewis could not be reached for comment.

The report and its exhibits can be downloaded here.

“There has been a pervasive pattern of personal destruction in which former and some current members of the senior management team use public meetings, the media, self-serving reports disguised as work product, and frivolous ‘anonymous’ complaints through the disclosure program as a means to falsely attack the character of, pressure, or aid in the termination of NBHD’s Board of Commissioners, senior management, and others,” the report says. “In other situations, it appears the methods are used to enhance the influence of senior management’s departmental fiefdoms.”

The report goes on to assert that management actions “appear to be routinely based upon self-interest, protection of position and department, not for the betterment of the system.” That “lack of professionalism” fails “not only the patients the system services, but the taxpayers who help fund it.”

Anticipating the report’s release, Broward Health’s board voted last week to authorize management to request up to 60 days to respond to the IRO report which will be sent to a federal monitor and could lead to further government action against Broward Health.

A new CEO coming soon

Who will author the response is unclear. The board recently has interviewed several candidates to become Broward Health’s permanent President/CEO. A meeting to make that selection is set for Oct. 31.

Broward Health, with four hospitals, three outpatient facilities and nearly 9,000 employees all north of Griffin Road, is the ninth-largest public health system in the country. It is a special taxing district overseen by a board of commissioners appointed by the governor.

The report says Broward Health suffers from “operational mismanagement” to include “considerable understaffing” in key areas such as physician services and the compliance and ethics office. Likewise, the report notes, two seats on the governing board of commissioners remain vacant. (On Friday, Gov. Rick Scott appointed Parkland’s Bev Capasso, a former chief executive officer of Jackson Memorial Hospital, to one of those seats.)

The report traces Broward Health’s “cultural war” to the hospital district’s “pervasive physician-centric tradition, in which senior management and staff instinctively defer to physicians, particularly regarding compensation.”

Broward Health Interim CEO Pauline Grant

Broward Health Interim CEO Pauline Grant

Allegedly illegal pay deals between Broward Health and its physicians was the focus of the False Claims Act lawsuit brought by whistleblower Dr. Michael Reilly that led to the $70 million settlement in September 2015. Allegedly violated in the scheme: the Stark Law, which generally prohibits physicians from referring patients to hospitals with whom they have a financial relationship, and the Anti-Kickback Statute, which prohibits paying physicians for healthcare referrals.

Without naming names, the report says some physicians are involved in “repetitive upcoding,” or assigning improper billing codes for medical procedures to increase their Medicare and Medicaid reimbursements. Baker Donelson says it has “encouraged” Broward Health to hire “expert coders” to handle coding for it doctors “to help remove even the appearance of a conflict of interest in coding.”

The report is similarly critical of Broward Health’s “ineffective response to the implementation” of compliance monitoring and auditing procedures, notably the lack of what’s known as a “Focus Arrangements” database that can track government-reimbursed physician referrals and sales.

‘Lack of commitment to compliance’

Baker Donelson’s report, prepared under the direction of attorney J. Scott Newton, accuses Broward Health of a “lack of commitment to compliance” both before and after the embarrassing federal investigation and costly settlement. It says problems began after Lewis was hired as chief compliance officer in April 2011.

One month later, a federal subpoena announced the start of the government’s fraud probe. It sought a multitude of records about physician contracts and other matters, yet appears to have had no “impact whatsoever on the operation or effectiveness of the compliance program,” according to the report.

The report’s litany of deficiencies, however, neglects to note that Broward Health’s compliance troubles pre-date Lewis’ arrival. For example, for more than a decade both management and the board ignored a lobbyist registration policy adopted in 2004. The district finally implemented a policy requiring lobbyists to register last month as a result of a Florida Bulldog story in May.

Baker Donelson’s report praises the “outstanding work” of Broward Health’s controversial General Counsel Lynn Barrett and her Legal Department in making important changes to the district’s poorly crafted compliance program by re-writing its Code of Conduct and ethics policies. The problem: the implementation of those measures was “seriously deficient in many critically high risk areas,” the report says.

The report, however, makes no mention of various controversies that have swirled around Barrett. They include allegations Barrett improperly attempted to block the public from meetings, steered millions of dollars in legal work to law firms with strong ties to Gov. Scott, and failed to cooperate with the FBI during an ongoing federal grand jury investigation into allegedly corrupt purchasing practices at Broward Health.

The report also details Baker Donelson’s annoyance at an article published in Medicare Compliance Review that “impugned the IRO’s qualifications.” The report suggests Interim CEO Grant, Compliance Chief Lewis and Chief Information Officer Peek planted the story.

A newsletter’s upsetting story

The story apparently at issue was published in June by a newsletter with a different name, Report on Medicare Compliance. Among other things, the story quoted Donna Lewis as criticizing the board’s efforts to identify the author of the anonymous email that raised questions about Baker Donelson’s independence and other matters. She told the newsletter that anonymous allegations are “routine” compliance matters and that the board’s high-profile hunt for the author had “eroded” trust.

“I have never seen a compliance complaint take up so much time from a governing body,” she said.

At a subsequent meeting by Baker Donelson with top Broward Health management, “it was emphatically noted to Grant that what appeared to be senior management-placed negative articles regarding the IRO in the local media would not deter our work. We advised Grant that we did not believe any articles or public comments were made without her authorization.”

The report adds that anonymous employees had told the law firm that Grant, Lewis and Peek “were overheard in Peek’s office discussing” what later became the article.

“Contacting the media, particularly because of the Florida Sunshine law, appears to be used as a common weapon in the cultural war at NBHD as a means of asserting false allegations and/or pressure on those who would refuse to change the culture of corruption,” the report says.

“Here, while it is certainly beyond the scope of our review, the IRO questions whether tax dollars were used to publish the ‘Medicare Compliance Review’ article and if so, if that constitutes an improper misuse of public funds. We will leave that determination for state officials, should they undertake a review.”

Broward Health begins lobbyist registration – 12 years and millions in contracts late

By Dan Christensen, FloridaBulldog.org 

Broward Health's corporate headquarters in Fort Lauderdale

Broward Health’s corporate headquarters in Fort Lauderdale

Broward Health’s long-lost lobbyist registration policy is, at last, resurrected. Lobbyists looking to influence district policy or the award of profitable contracts must now publicly identify themselves and their clients.

Six lobbyists have registered since the program began Sept. 12 – all representatives of large, out-of-state pharmaceutical or hospital and medical supply companies like Sandoz, Genentech and Carefusion.

Who to watch out for going forward: politically connected local lobbyists like William “Billy” Rubin and Fred Karlinsky, who’ve operated behind the scenes at Broward Health in the past.

Rubin is a confidant of Gov. Rick Scott. Karlinsky was co-chair of Scott’s 2014 statewide campaign finance committee. The governor appoints the board of commissioners that governs the billion-dollar public health system whose legal name is the North Broward Hospital District.

FloridaBulldog.org reported in May that for 12 years Broward Health had ignored its own lobbyist registration rules, adopted in 2004, allowing lobbyists to operate freely behind the scenes.

That was news to Broward Health’s current board of commissioners.

Broward Health Chairman Rocky Rodriguez and Commissioner Sheela VanHoose

Broward Health Chairman Rocky Rodriguez and Commissioner Sheela VanHoose

Said Chairman Rocky Rodriguez, “You assume these things are being taken care of.” Said Commissioner Sheela VanHoose, who spent two months on the board’s legal affairs committee holding workshops to establish a lobbying policy, “It was a little shock to see.”

Broward Health CEO Pauline Grant announced in May that registration would begin in June, but it took much of the summer to actually get a system in place.

The revised rules require lobbyists to pay an annual $40 fee for each client “before any advocacy can take place.” Lobbyists must declare under oath that the information they provide is “true and correct.” That includes their yes or no response to this question: “Do you have any direct or indirect business association, partnership or financial relationship or live in the same household with or are related to any Broward Health board member, board committee member, employee or agent?”

So far, no lobbyist has answered yes.

Lobbyists must also file annual expenditure reports under oath “disclosing each lobbying expenditures [sic] to any person or entity,” including such items as food and beverage, travel and entertainment expenses. Those reports, however, don’t have to be filed until the July 30 of the fiscal year after registration, so they will likely not be timely.

Unlike the Florida Legislature, the district does not require lobbyists to disclose how much they are being paid to lobby.

The district’s revised lobbying policy forbids “lobbyists and lawyers” from lobbying any Broward Health board members, employees or agents “during the consideration of any contracts and contract negotiations and related discussions. This prohibition shall include, but not be limited to, physician contracts, professional service contracts, services contracts, design-build contracts and construction contracts.”

A list of registered lobbyists is published online.

Broward Health awarded many multi-million dollar contracts during the years its lobbying policy was not enforced. One of the biggest, and most unusual, was an unprecedented 25-year, no-bid deal in 2012 that outsourced the district’s radiation oncology services to 21st Century Oncology, the Fort Myers-based cancer care company.

FloridaBulldog.org reported in February that at the time of the deal Gov. Scott had an indirect ownership interest in 21st Century Oncology via his $210,000 investment in Vestar Capital Partners, the private equity firm that owns 21st Century.

The governor’s office has said Scott had “no conversation or contact about Vestar Capital or 21st Century Oncology with the North Broward Hospital District.”

Still, Scott’s good friend, lobbyist Billy Rubin, has lobbied at the district and counts 21st Century Oncology among his clients, according to the website of his firm, The Rubin Group.

Broward Health will start lobbyist registration in June, according to CEO

By Dan Christensen and Karla Bowsher, FloridaBulldog.org 

Broward Health's board of commissioners at a meeting last month.

Broward Health’s board of commissioners at a meeting last month.

As Broward Health’s board of commissioners dithered last week about how to implement a 12-year-old, yet newly discovered lobbyist registration policy, reform-minded CEO Pauline Grant said she would have a registration system up and running in June.

“I have come up with procedures to implement registration over the next couple of weeks,” Grant said in an interview on Friday. “It will be done.”

News of Broward Health’s failure to enforce its own lobbyist registration policy gave yet another black eye to a beleaguered hospital system that’s already the focus of federal and state agents.

In a brief discussion at Wednesday’s regular board meeting, Commissioner Sheela VanHoose said board members want an online registration system. In an interview afterward, she said it should be comparable to those used by Broward County or Broward Public Schools.

“That to me is accountability and transparency at its best,” said VanHoose, whose paying job is as a lobbyist for Charter Schools USA.

VanHoose heads the district’s Legal Affairs Committee, which spent months studying how to develop a lobbyist policy without being told by staff that a policy already existed.

“You assume these things are being taken care of. The board doesn’t get involved in operations,” said Broward Health board Chairman Rocky Rodriguez. “The public has a right to know who is lobbying the hospital district.”

Broward Heath CEO Pauline Grant

Broward Heath CEO Pauline Grant

What’s happened has caused VanHoose to wonder whether other policies have not been followed. She said she’s talked with Grant about creating a searchable database of district policies.

“People come and go … so there has to be a process put in place to make sure nothing slips through the cracks in the future,” VanHoose said in an interview.

Unlike city and county governments, hospital taxing districts like the North Broward Hospital District – Broward Health’s legal name – are not required by law to register lobbyists or compel them to publicly disclose what they’re up to and who they represent.

Lobbying policy adopted, not implemented

In 2004, however, Broward Health’s board adopted a five-page lobbying policy requiring lobbyists to register, identify their clients and disclose both the nature of their business activity and any business or financial relationships they have with Broward Health board members, employees or agents. Also while under oath, lobbyists were supposed to submit an annual statement for each of their lobbying expenditures before the district in excess of $100. Violators can be debarred.

Still, the district has never required a single lobbyist to register.

Nevertheless, district records show that the board was aware of its policy enough to modify it in 2014 after Rodriguez complained about being swamped by “tons and tons of phone calls” from advocates for doctors and others in contract negotiations. The change: lobbying was prohibited “during the consideration of any contracts.”

Wednesday’s board meeting also included a brief speech by Broward Health compliance manager Brian Nicholas, who talked about a “culture of fear, retaliation and bullying” at the district.

As an example, Nicholas cited the reaction of board Chairman Rocky Rodriguez and Commissioner Christopher Ure to a recent anonymous letter that accused General Counsel Lynn Barrett of impropriety involving the Baker Donelson law firm.

Broward Health hired Baker Donelson last year to serve as the “independent review organization” that monitors its compliance with the terms of its federal settlement of Medicare and Medicaid fraud allegations last fall. Nicholas said that when the anonymous complaint was discussed at a May 18 committee meeting, Rodriguez and Ure were only concerned with trying to identify the author, not with the complaint itself.

“I believe you’ve now given a figurative middle finger to the federal government,” Nicholas told commissioners. “I will undoubtedly be retaliated against.”

Lobbyist rules? What rules? Broward Health fails to enforce own policy in another snafu

By Dan Christensen and Buddy Nevins, FloridaBulldog.org 

Broward Health's never used lobbyist registration form

Broward Health’s never used lobbyist registration form

For more than a decade Broward Health has ignored its own rules, allowing lobbyists to operate freely behind the scenes as they seek to influence who gets tens of millions of dollars in contracts the hospital district awards every year.

Broward Health’s failure to enforce its own lobbyist registration policy is another management snafu by the billion-dollar public health system whose business practices are being probed by federal and state investigators.

One lobbyist who tried to register a year ago literally had to beg the system’s staff to enforce its own rules.

“I hounded them. Maybe there was something going on behind the scene they didn’t want known,” Seth Platt of Miami Beach-based LSN Partners recalled. Platt had a client in April 2015 seeking to provide free marketing services in exchange for product placements in the district’s four hospitals.

Platt eventually forced the hospital staff to allow him to attempt to register. A district lawyer sent him a copy of Broward Health’s five-page lobbyist policy passed by commissioners in 2004 with a registration form. He filled it out and sent it – he doesn’t recall to whom – but it apparently landed in the circular file. Broward Health has no record of it.

Broward Health Commission Chairman Rocky Rodriguez, appointed to the board by Gov. Rick Scott in December 2013, was surprised when told the lobbyist registration had never been implemented.

Broward Health Chairman Rocky Rodriguez and Commissioner Sheela VanHoose

Broward Health Chairman Rocky Rodriguez and Commissioner Sheela VanHoose

“You assume these things are being taken care of. The board doesn’t get involved in operations,” Rodriguez said. “The public has a right to know who is lobbying the hospital district.”

Even more surprising is that Commissioner Sheela VanHoose serves on the board’s legal affairs committee that recently held workshops to establish a lobbying policy without being told by staff that a policy was already in place.

A waste of time

“We’ve spent two committee meetings talking about a lobbying policy and most of what we talked about is not relevant,” she said after being provided a copy of the policy. “It was a little shock to see.”

VanHoose said she wants to know why no registration process was ever established and will ask the administration to provide a list of registered lobbyists at the next regular board meeting on May 25.

“How did it happen and how do we prevent it from happening again? Those are the questions that we as board members need to answer,” said VanHoose.

Unlike city and county governments, hospital taxing districts like Broward Health are not required by law to register lobbyists or compel them to publicly disclose what they’re up to and who they represent.

Still, in a 2004 nod to protecting the “integrity” of the hospital district’s “governmental and contracting processes,” Broward Health’s board of commissioners adopted a five-page lobbying policy requiring both registration and disclosure, with sanctions for violators.

The policy remains in effect, but hospital district administrators never followed through to set up a registration process or even acknowledge on its website that such a policy exists. Not a single lobbyist has ever registered at Broward Health, district officials told FloridaBulldog.org.

Today, Broward Health is a lobbyists’ playground. The hospital district’s forlorn attempt to flush them from the shadows is all but forgotten.

Platt’s attempt to register was disclosed in an interview with Charlotte Mather-Taylor, Broward Health’s vice president for government relations. She said she was never instructed to set up a registration process and that when a frustrated Platt contacted her about registering, she referred him to the district’s lawyers, who sent him a copy of the lobbying policy and told him to call the CEO’s executive secretary.

“That was the last I heard about it,” said Mather-Taylor.

Platt told FloridaBulldog.org that after sending in his now-lost registration form, he pitched his client’s marketing proposal to Broward Health Senior Vice President Doris Peek and others, but nothing came of it. Instead a month later, in May 2015, the district signed a $2.1-million marketing deal with Fort Lauderdale’s Zimmerman Advertising that later morphed into a controversial proposal for a $71.4-million ad deal. The proposal withered following the Jan. 23 suicide of Broward Health CEO Dr. Nabil El Sanadi.

Gov. Rick Scott’s investment

Broward Health, the brand name of the North Broward Hospital District, has awarded many fat contracts during the years its lobbying policy was not enforced. Perhaps the fattest was an unprecedented 25-year, no-bid deal in 2012 that outsourced the public hospital system’s radiation oncology services to a Fort Myers-based cancer care company, 21st Century Oncology.

Gov. Rick Scott

Gov. Rick Scott

FloridaBulldog.org reported in February that at the time of the deal Gov. Rick Scott had an indirect ownership interest in 21st Century Oncology via his $210,000 investment in Vestar Capital Partners, the private equity firm that owns 21st Century.

The governor’s office has said Scott had “no conversation or contact about Vestar Capital or 21st Century Oncology with the North Broward Hospital District.” Still, Scott’s good friend and confidant, Fort Lauderdale lobbyist William “Billy” Rubin, is known to have lobbied at Broward Health and counts 21st Century Oncology among his clients.

Rubin likewise represents two other companies that have lucrative contracts with Broward Health: Armor Correctional Health, the county jail’s in-house healthcare provider, and Emcare, which has a trio of contracts to provide emergency and urgent care services, obstetrical and gynecological care and pediatric care. Those two contracts and the one with 21st Century Oncology are worth tens of millions of dollars.

Rubin, however, is not registered to lobby at Broward Health.

Broward Health’s lobbying policy was approved in November 2004. It drew from state law to define who is considered a lobbyist and says “no person(s) may lobby the district or any of is board members, employees or agent until such person has registered as a lobbyist with the district’s Vice President/Corporate Services.”

A hitch: Broward Health has no Vice President/Corporate Services.

“That’s not a title that belongs to anybody I know,” said Rodriguez. “We have a lot of vice presidents. But nobody with that title.”

The policy requires lobbyists, in addition to identifying themselves, to disclose the nature of the business activity and any business or financial relationships they have with any Broward Health board member, employee or agent. Lobbyists must also submit an annual statement of each of their lobbying expenditures before the district in excess of $100. Violators can be precluded for lobbying at the district “for a period of time to be determined by the board” and their clients may be debarred.

In 2014, after Rodriguez complained about board members being swamped by “tons and tons of phone calls” from lawyers, doctors and others about contract negotiations, the board amended its policy to prohibit lobbying “during the consideration of any contracts.”

Missing from the updated policy was the original lobbyist registration form that lobbyists were supposed to use to disclose under oath information about themselves and their clients.

Broward Health looks to pay headhunting firm $300,000 to find a $950,000 CEO

By Dan Christensen and Buddy Nevins, FloridaBulldog.org 

Broward Health Interim CEO Pauline Grant, whose salary will be voted on Wednesday. Photo: Nova Southeastern University

Broward Health Interim CEO Pauline Grant, whose salary will be voted on Wednesday. Photo: Nova Southeastern University

Taxpayer supported Broward Health’s board of commissioners will be asked today to approve spending $300,000 for a search firm to find a new CEO whose total pay would be $950,000 a year.

The new CEO’s “total targeted cash compensation” would far exceed the $675,000 annual salary of the last CEO, the late Dr. Nabil El Sanadi, who committed suicide Jan. 23.

At the same meeting, commissioners will be asked to approve a $619,000 salary for Interim CEO Pauline Grant, who currently runs the district’s system of public hospitals and clinics.

The board will also be asked to hire Philadelphia-based Diversified Search, the firm recommended to locate and screen candidates for the permanent job of running Broward Health, which has over 8,200 employees, roughly 300,000 emergency room visits every year and an annual budget of about $1.2 billion.

If hired, Diversified would be paid a “minimum retainer fee” of $300,000, or 31.5 percent of the successful candidate’s total compensation package in the first year. The company’s fee would grow “should the actual compensation exceed the basis of our retainer.”

The new CEO’s “total compensation includes salary, estimated bonus, signing bonus and any other incentive cash compensation,” says a March 30 letter written by John T. Mestepey, the managing partner of Diversified’s Miami office.

Broward Health is also to pay Diversified for “direct and indirect expenses,” including “candidate and consultant travel” and database research costs. “Indirect expenses are 9% of the fee,” Mestepey wrote.

With the hiring of Diversified Services, Broward’s two public hospital districts – North and South – would be actively engaged in expensive searches for pricey top executives. Memorial Healthcare System, as the south district is known, is paying $330,000 plus expenses to Korn Ferry to find a replacement for longtime CEO Frank Sacco, who retired at the end of February. Korn Ferry was hired last year.

Taxpayers foot bill, kept in dark

While taxpayers will be helping to foot the bill for the search, they would be kept in the dark about certain unspecified aspects of the search under guidelines laid down by Mestepey in his March 30 letter to Interim CEO Grant.

“During the course of this assignment, Diversified will provide you with various information on potential candidates,” Mestepey wrote.

“Accordingly, it is understood and agreed that dissemination of this information shall be limited to employees of Broward Health who are directly connected with this specific search, or whom a reasonable person would agree have a need to know.”

The board decided a nationwide CEO search was needed in the wake of El Sanadi’s Jan. 23 suicide. Kevin Fusco, Broward Health’s chief operating officer, was named acting CEO but was later removed. Grant took over as interim CEO last month.

Grant was given the tough task of restoring Broward Health’s battered public reputation amid daunting news of both federal and state investigations of the district’s purchasing practices. Her first job has been to calm the political firestorm from the probes and El Sanadi’s suicide, and to reassure doctors complaining that patient care was “hanging by a thread” due to contracting delays.

Those contracting delays, said to be improved lately, were laid at the doorstep of Broward Health General Counsel Lynn Barrett.

Barrett, whose nine-month tenure has been steeped in controversy, faces a performance evaluation this month. That evaluation, however, may not be entirely public.

According to the meeting’s agenda, an unidentified board member(s) recommended that commissioners meet individually with Barrett to ask questions and complete her evaluation.

“This will afford each commissioner the ability to ask the questions necessary to complete their evaluation form as well as to respect the potential for certain sensitive matters that should not be mad[e] public potentially in defense of the system,” the agenda says.

Broward Health seeks bids for ad contract as huge no-bid deal with Zimmerman dies

By Buddy Nevins and Dan Christensen, FloridaBulldog.org Broward Health hq

In a signal that Broward Health’s controversial no-bid $71.4 million deal with Zimmerman Advertising is dead, blueprints have been drafted for a new, smaller marketing campaign for the public health system.

The Zimmerman agreement collapsed after the suicide of former Broward Health CEO Nabil El Sanadi.  His death triggered a wave of negative publicity as news surfaced of separate investigations by the governor’s office and the FBI of business practices at Broward Health.

“It’s done,” Broward Health Commissioner Maureen Canada said. “With all the heat that came onto the Board (of Commissioners) with the contract, it was better we move on.”

Advertising firms earlier this month were asked to provide ideas and potential budgets to produce media ads for Broward Health’s four public hospitals, 16 community health clinics, four urgent care centers and the Broward Health Physicians Group of roughly 90 doctors, according to the Request for Proposals obtained by Floridabulldog.org.

Inviting competitive bidding from registered firms for the lucrative, possibly multi-million dollar contract is a change from last year, when the agreement was planned in private and then steered publicly to Zimmerman without any proposals from other firms.

Zimmerman signed a $2.1 million one-year contract in May 2015. Within months, Broward Health Commissioners agreed to expand Zimmerman’s contract to a six-year, $71.4 million agreement.

The Fort Lauderdale-based firm, its showcase headquarters off I-95 and its flamboyant founder Jordan Zimmerman were familiar to some commissioners and El Sanadi, who was instrumental in fashioning the no-bid deal.

Zimmerman is a Republican campaign contributor.  The seven commissioners who govern the tax-assisted health care system are all Republican activists appointed by Gov. Rick Scott, who also appointed El Sanadi, another heavy contributor to the Republican Party of Florida, to the Florida Board of Medicine.

Death before deal done

El Sanadi committed suicide Jan. 23, four days before the board was set to approve the deal. The deal, put on temporary hold in the wake of El Sanadi’s death, fell apart after FloridaBulldog.org first reported on the unusual advertising deal Feb. 16.

 

Now Broward Health’s original one-year contract with Zimmerman is winding down.

Jordan Zimmerman, left, advertising firm founder and Dr. Nabil El Sanadi, late chief executive of Broward Health

Jordan Zimmerman, left, advertising firm founder and Dr. Nabil El Sanadi, late chief executive of Broward Health

“The Zimmerman contract for $2.1M expires on May 4th.  Zimmerman continues to work on tactics on the marketing plan scheduled for the month of April,” Doris Peek, Broward Health’s director of marketing wrote in an e-mail.

The Zimmerman deal is one of several being examined by the Florida’s Chief Inspector General in an extensive probe of Broward Health’s contracts and the correspondence concerning them stretching back to July 2012.  In a separate investigation, a Fort the FBI and a Fort Lauderdale federal grand jury are gathering evidence of corruption in purchasing, according to numerous sources and public statements by staff and others.

Gov. Scott suspended former Broward Health Chair David Di Pietro and Commissioner Darryl Wright in March after Inspector General Melinda M. Miguel complained about interference with her probe.  A key supporter of the Zimmerman contract at Broward Health, Di Pietro won his commission job back in Broward Circuit Court, but resigned before an appeal by the governor could be heard.

Peek said she doesn’t know if Zimmerman will bid on the new contract, saying, “Zimmerman is welcome to respond and should they respond would be evaluated in the same manner as all other responding vendors.” Proposals are due to the Broward Health staff by 3 p.m. May 5, one day after Zimmerman’s contract ends.

Jordan Zimmerman did not respond to an e-mailed request for comment.

The cost and other terms of the new ad campaign will be negotiated between the firm chosen by staff and approved by commissioners. It will be based on what responding firms bid compared to a no-growth “flat” budget predicted by the financially challenged public health system next year, Peek said.  The firm winning the contract will get an annual retainer and a production fee.

New contract smaller

Firms are being told that the new contract will be less extensive than the one given Zimmerman.  That previous contract gave Zimmerman responsibility for media ad buying, outdoor and online media.  It also included a 15 percent commission on all clicks on digital ads.  These tasks have been removed from the new proposal and given back to staff.

Peek was insistent that any firm chosen will be required to show the advertising is working.  Zimmerman balked at including performance standards in that firm’s contract, but Peek called including them “common practice.”

The revamped contract is for “external brand awareness and service line promotions, development of media plans for Broward Health…and creative design of multi-media advertisements for all divisions of Broward Health,” the Request for Proposals states.

The winner will be expected to present Broward Health with “billing documentation including detailed invoicing from media outlets” and produce weekly status reports for health care executives.

Commissioner Canada said the hospital district has a new interim CEO, Pauline Grant, and a new dedication toward transparency in its business dealings.

“We’re resurrecting the marketing and communications contract in a transparent way,” she said. “We’re moving forward in a different direction.”

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