By Dan Christensen and Buddy Nevins, FloridaBulldog.org
A cancer treatment company financially tied to Gov. Rick Scott that got a no-bid, 25-year contract from Broward Health in January 2012 later contributed nearly $400,000 to the governor’s re-election campaign, state records show.
21st Century Oncology’s political generosity went deeper. Since Republican Scott was first elected in November 2010, the Fort Myers-based company has contributed another $340,000 to the Republican Party of Florida.
FloridaBulldog.org this week reported on Gov. Scott’s indirect ownership interest in 21st Century Oncology via his $210,000 investment in the company’s owner, the private equity firm Vestar Capital Partners. The story also reported that attorneys for Broward Health, a tax-supported public hospital system, had denied a public records request for a copy of the contract.
Hours after the story was published, however, the hospital district’s lawyers at the Foley Lardner law firm changed their minds and released a copy of the 42-page contract, exhibits and amendments.
The contract spells out the terms of an exclusive and lengthy arrangement in which Broward Health gave 21st Century Oncology LLC exclusive rights to supply radiation oncology services to Broward Health’s patients – and collect all the revenue those patients generate.
21st Century paid zero for access to patients
21st Century paid Broward Health nothing to obtain that access. Likewise, Broward Health did not pay 21st Century to assume a practice area that then-Broward Health president and chief executive Frank Nask told the district’s board of commissioners in 2012 was losing $3.5 million a year.
Why would 21st Century want to take over a money-losing operation? How might it turn it into a profit maker? Kevin Fusco, who holds Nask’s job today, was asked by email to discuss the oncology radiation program’s performance under 21st Century. He did not respond.
The contract, however, says the parties executed a separate agreement that requires 21st Century to pay Broward Health unspecified fees for the right to use its space and equipment, such as CT scanners, located at Broward Health Medical Center in Fort Lauderdale and Broward Health North in Pompano Beach. That agreement is a public record, and a copy has been requested by FloridaBulldog.org.
At the same time, the contract also specifically allows 21st Century to continue to operate radiation oncology facilities in Deerfield Beach, Plantation, Tamarac, Pembroke Pines, Coral Springs and Aventura “without being in violation of this agreement.”
The contract is for 10 years and automatically renews for three consecutive five-year periods unless 21st Century wants out earlier.
Broward Health also pays 21st Century a yearly fee of $120,000 to provide a medical director for the oncology program. The director sets physician schedules and monitors performance, and is paid based on 8 to 12 hours of work a week.
More significantly, the contract requires Broward Health to pay 21st Century Oncology to treat poor patients who don’t have the money for treatment. Money that comes from taxpayers.
Broward Health’s payments for indigent patients under the original contract were broken into three categories of rates: $21,000 for high level services (prostate, lung, head and neck); $14,000 for intermediate level services (breast, gastrointestinal [esophagus, pancreas, anal canal], brain; $8,000 for low level services (lymphoma, skin, palliative cases).
About a year later, the contract was amended to delete any reference to indigent patient fees. Broward Health’s payment schedule for indigent services was changed to now pay the radiation company 65 percent of the Medicare Part B allowable. No explanation for the change, or its cost to the public health system, was given.
One knowledgeable source, however, said it is his understanding that 21st Century Oncology’s contract with Broward Health is worth $20-30 million a year to the company, “multiplied by 25” years.
A reliable contributor to Scott
Throughout all this time, 21st Century was a reliable contributor to Gov. Scott, who appoints Broward Health’s governing Board of Commissioners.
21st Century Oncology has donated to Florida’s Republican Party since the late 1990s.
Its contributions increased noticeably, however, during Scott’s first campaign in 2010, including a $20,000 contribution by 21st Century CEO Dr. Daniel Dosoretz days before the vote.
The bulk of 21st Century’s political contributions have been to Gov. Scott’s Let’s Get to Work committee, which can accept unlimited donations. More than $360,000 over a half-dozen large donations were made to the committee between May 2012 and January 2014 when Scott faced a tough re-election challenge from former Gov. Charlie Crist. 21st Century Oncology gave an additional $30,000 last March to Let’s Get to Work after the governor won re-election.
Scott’s own campaign organization, which is limited under the law as to how much it can accept from each donor, also got money from 21st Century. Four corporations owned by the company gave the maximum $3,000 contribution each on Jan. 31, 2014. One of those corporations was 21st Century Oncology LLC, the entity that entered into the deal with Broward Health.
The firm’s giving also extended to the governor’s first inauguration. In 2011, 21st Century Oncology gave $25,000 to the governor’s inaugural committee.
Jackie Schutz, a spokesman for the governor, said this week that Gov. Scott wasn’t aware that 21st Century had sought the Broward Health contract prior to its award in 2012. She also said the governor keeps his assets in a blind trust and doesn’t know about or control what he owns.
“The governor and his staff have had no conversation or contact about Vestar or 21st Century Oncology with the North Broward Hospital District,” Schutz said.
Lori E. Gold / February 24, 2016 9:54 am
Great reporting, as usual. Thank you for this piece – timely, well-researched, well written.
Raindancer / February 24, 2016 1:06 pm
Well, everyone will be scrambling now to cover their asses. God only knows what the former CEO knew that caused him to take such drastic measures.. But, it’s all going to come out.
This is what happens when a guy commits the biggest Medicare / Medicaid fraud in history and the feds drop the ball and don’t put him in jail. He becomes Governor, then maneuvers an astronomical amount of our public money to himself and his friends. First Columbia, now Broward health.
Memo to the feds. This is partly your fault. You owe us. Clean-up this cesspool once and for all.
Tony Balogna / February 24, 2016 3:03 pm
And to think I read an article that Trump is allegedly considering Scott for a possible VP position, partially based on his health care experience. HAHAHAH
That may be a vote breaker for me if that’s the choice.
I had nbo idea of all the back door deals here, no bid 25 year contracts? UNBELIEVABLE
Anonymous Too / February 24, 2016 5:42 pm
Get rid of every executive and start over. ALL had their hands in this on some level.
Wringing Hands / February 24, 2016 5:43 pm
Board meeting time. This should be a great one.
Awkward Moment / February 25, 2016 8:18 am
Tenet just OFFERED to pay the OIG in excess of $200M for violation of anti-kickback law in GA, their INITIAL offer. This typically means they owe far more, and that negotiations will bounce back and forth before a “settlement” is reached that will be less than what is really owed, and more than what is initially offered. So, just a word of caution that when cleaning house; you don’t want to recirculate fraudsters, such as Nask who bankrupted St. Mary’s in PB County before joining BH, some former BH c-suiters who are currently applying for CEO in palm beach, or possibly some of the the CEO candidates that BH will entertain as who on this earth with a sound value system would want to join a heath care system with a 40 year history of fraud and fiscal misuse!
an honest soul / February 29, 2016 9:00 am
Mr. Wayne Black, please check out the previous no bid contacts from 2012, 2013, 2014 with the Miami advertising agency who also received a multi million dollar contract.
Talk about recycling. ..now the marketing Sr VP responsible for the previous mulli million dollar no bid contact, who got axed by El Sanadi just got a VP job with HCA.
qui tam / March 2, 2016 7:59 am
This is some ménage trois! Any updates, Dan, on this all together in the sack in the dark relationship between 21st Century Oncology, Broward Health, and Slick Scott? Any intent to stay on Scott and deep dive into that blind trust business? Might as well rename that to blind distrust!
qui tam / March 7, 2016 7:58 am
Keep probing 21st Century contracts, like the one with Naples Community Hospital where our dearly entrenched governor lives!