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Lawsuit claims Palomar board violated Brown Act when it awarded contract


A lawsuit filed August 13 seeks to overturn a June decision by the seven-member Palomar Health board that changed contracts for emergency medical personnel from the old company, Vituity to Emergent Medical Associates (EMA.)

The lawsuit filed by Citizens to Save Palomar Health, alleges the board violated the Brown Act when it voted during a June 16, 2021 closed session to award “key emergency, hospitalist and intensivist contracts” to  Emergent Medical Associates. 

The lawsuit against Palomar Health District and the Palomar Health Board of Directors, seeks to reverse the June award of contract for emergency medical personnel to EMA (Emergent Medical Associates.) It replaces Vituity Healthcare and Medical Staffing Service, which has provided this for four decades. 

At the time of the action, CEO Diane Hansen commented: “Our community and patients expect us to be good stewards of our resources. EMA’s proposal allows us to retain our staff, plus reinvest saved resources to upgrade medical care.” 

Hansen also commented:  “EMA has pledged to offer employment to the approximately 100 physicians and 45 other non-employee staff affected by this change. Based on experience, Palomar Health estimates 90-95% of affected physicians and non-employee staff will stay in their current capacities at Palomar Health.”  That estimate turned out not to be accurate.

California law prevents health care providers from directly employing doctors. They must contract with private medical groups. Under the new contract, EMA and subsidiary Benchmark were supposed to hire most of the doctors that worked for Vituity. However, according to the lawsuit and a separate statement by the chief of staff,  Sabiha Pasha, almost two-thirds of doctors have left or are leaving.

The Times-Advocate asked for comment from the district. A spokesman said, “We do not comment on pending litigation.”

The president of Citizens to Save Palomar Health and who signed the 10-page complaint is Dr. Marcelo Rivera, a former longtime hospital board member.  He is interviewed below.

The complaint seeks temporary and permanent injunctions restraining Palomar from enforcing the new contract and a judgment declaring the board action null and void.

According to the group’s press release: “The board’s new contracts are expected to severely reduce the number of emergency care physicians, hospitalists, and critical care specialists who are on duty at any one time in the hospitals’ emergency department.  Nearly two thirds of  the hospitals’ frontline physicians have left and are being replaced by licensed but relatively inexperienced doctors, physician assistants, and nurse practitioners who are not familiar with the local healthcare environment . . . The result is overcrowded waiting rooms and patients now having to wait several hours longer to be seen and treated.”

Palomar’s Chief of Staff Sabiha Pasha, contacted by The Times-Advocate, said, “only 1/3 of Vituity physicians have joined the new group.” She added, “The majority of the hospitalists that will be leaving have agreed to work as locum for Benchmark for 60 days because they did not have enough physicians to start the program. Without them great patient harm would have ensued.” She added,  “Our current census is high with each doctor seeing more than 20 patients a day.”

According to the complaint, “The vote to approve the EMA contract was a culmination of a secretive back-room process that excluded the public, excluded/disregarded the opinions and recommendations of Palomar Medical Staff and failed to provide the public with the most basic notice. Indeed, the agenda items and notices leading up to the June 16, 2021 meeting, as well as on the date of the meeting, show that the board improperly conducted its purported deliberations under the guise of ‘trade secrets.’ ”

Ken Lounsbery, of the law firm Lounsbery Ferguson Altona and Peak LLP, commented, “The board has upended the entire Palomar healthcare system.”

He told The Times-Advocate “the protocols for making a Brown Act claim are somewhat unusual.”  Claimants are required to give the public agency “a chance to correct its mistakes,” he said. “It’s called a ‘cure’ and a cure typically is that the agency will simply retake the action after more carefully noting. In this instance the agency took the position that it didn’t believe it  required any curative action,” he said.  “They gave us two written responses that said, basically, ‘Tell us what we did wrong.”

The answer, said Lounsbery, is “You [meaning the hospital board] are in control of the record and you know what you did or didn’t do.”

Note: The 1953 Ralph M. Brown Act, is California’s open meetings law. It states: “The people of this State do not yield their sovereignty to the agencies which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.”

The biggest violation, says Lounsbery, “was in noticing of the hearing. At no point did they ever outrightly describe that the hearing was for the purpose of replacing the contractor. They used a device they have done frequently, saying that any identification was a trade secret. No mention in any of the notices that the purpose of the hearings was to replace a 40 year contract with a new contracting agency.”

According to the complaint, “Instead, the Board’s Agenda stated simply that there was a closed session ‘Pursuant to Government Code § 32106, Civil Code § 426.1 – Health Care Facility Trade Secrets.’ ”

Part of the claim is based on “expected testimony of board member John Clarke, who was surprised  and had no time to discuss it with staff,” said the attorney. “It was obvious to him that at least four other board members were fully briefed and were on board.” Clarke was, “taken completely by surprise.”

The lawsuit alleges that some trustees, led by board Chairman Linda Greer,  met in person and/or via e-mail and text messages to discuss a contract with EMA outside of a scheduled and noticed board meeting.  These are referred to in the law as “serial” meetings. The complaint alleges that by June 16 “a majority of the board members had already deliberated among themselves and come to a coordinated decision on the contract without any opportunity for public input.”  

The vote to make the change was 4-2 with one abstention.  

Lounsbery added, “Despite the fact that EMA’s proposal was opposed by the medical staff; that the board did not meaningfully deliberate; and the public was shut out of the process, the board majority nevertheless awarded the contracts to EMA in rushed secrecy.” He added, “The board violated the state’s Brown Act in the process and therefore its decision to award the service agreement to EMA must be declared null and void.”

Lounsbery’s firm has considerable experience with Brown Act cases. “We practice on both sides of the aisle,” he said. He served in the Escondido city attorney’s office, was once Escondido city manager and city attorney for San Marcos. “We represent public agencies quite often on the defensive side. It’s law that we are pretty darned familiar with,” he said.

Lounsbery calls the case “so disappointing to me because I served on that board for six years in the late 80’s. I can never remember any occasion when the board played fast and loose with its public hearings. How this can happen is a mystery to me as a citizen. I’ve been a patient and lifelong supporter of the district. I co-chaired Proposition BB. We don’t take lightly this kind of attack. If it weren’t for the fact that it seems such a blatant violation we would have given them the benefit of the doubt, but this is a difficult one to overlook.”

Lounsbery added, “The underlying point is that we are not a gadfly group. Marcelo Rivera was a member of the board nearly as long as I. It’s a sincere concern about the governance of the district.”

Chief of Staff Pasha, quoted above, also wrote: “This abrupt termination of multiple physician contracts in the middle of a pandemic will affect overall quality of care. Medical care provided in a team environment is built on trust and relationships built over time. Bringing in physicians from out of town and dropping them into a situation of extremely high patient census and acuity without proper on- boarding and training in the use of electronic health records sets them up for failure. They are as an example unable to enter electronic orders in a timely fashion which delays care to our critically sick people or know which consultant to call. They are unfamiliar with our culture and our processes and the way we do things. A big change such as this requires planning and time. This was not done.”

Launching a Recall?

Although Dr. Marcelo Rivera, president of Citizens to Save Palomar Health, hopes the lawsuit will force a vote on the EMA contract again—this time with more public participation—he is after bigger fish: the CEO of the system, Diane Hansen, and trustees he paints as her two biggest supporters, board Chairman Linda Greer, and Vice Chairman Jeff Griffith.

Asked why he organized the lawsuit, Dr. Rivera said, “I got involved in May when I got wind that for arbitrary and capricious reasons they were going to change emergency room and clinical services contracts. As a member of the medical staff and the community, when you change doctors it’s not just changing one piece for another piece.”

Rivera, who is on the Medical Executive Committee, says, “I innocently asked ‘Why? Have there been complaints?’ ”

He said, “I was told it was not because of performance issues, because all of their evaluations have been positive.” The administration showed the Medical Executive Committee the two contracts and asked its opinion. “Myself and another doctor reviewed what was provided and we asked, ‘Why are you changing?’ We were told, ‘Because we want to build up the hospital’s program.’ But when we reviewed the contract it didn’t do anything to improve.”

Dr. Rivera accuses the board majority and CEO of “broken promises.” He adds, “They are arbitrarily making changes that affect all of those physicians, who are graduates of Harvard, Stanford, Duke, Columbia, all the greatest schools. They got us through the COVID crisis and the fires of 2007. I continued to ask and never got a straight answer.”

Rivera says well before the board vote he began hearing that doctors in other communities were talking about coming to work at Palomar. “I realized they had negotiated these contracts in the dark and never posted it for the public to know ahead of time,” he said. “As a former board member I said ‘This is a violation!’ They didn’t appropriately notify the public. It is proceeding with an illegal contract. I believe in the Brown Act. It’s there for a purpose. To prevent boards from doing backroom deals.”

He adds, “The system is working well and suddenly they changed the clinical services—affecting the whole hospital— and they bring in staff not as well experienced.”

Dr. Rivera alleges that unnecessary hospital deaths can be laid at the feet of overstretched staff. “I found out that in April someone died because they were understaffed. The patient died waiting to be offloaded,” he claims. “On August 3 a patient died in the waiting room, who had not been triaged. Not because doctors weren’t there but because there were twelve nurses understaffed.”

Rivera says he and others came together to form Citizens to Save Palomar Health on July 9. 

Rivera demands, “Who do we hold responsible?” He blames the CEO. “I consider the CEO incompetent and the chairman and vice chairman incompetent. As leadership they are supposed to look at the decisions recommended to them. Both medical staffs opposed changing of contracts because we saw problems.”

Rivera argues that Hansen’s incompetence is demonstrated when she mis-estimated how many doctors would choose to leave rather than work with EMA—estimating that 90-95% would stay, when two-thirds have left. He also believes Hansen “should be fired for cause,” because when, at an August meeting during public comments a nurse spoke about a patient who died August 3. “The CEO misstated the situation, saying the patient did not die.”

The Times-Advocate contacted Christine Bauer a nurse who has been at the hospital over 25 years. She made the statement at the August meeting. 

“I was asked to speak about the conditions in the emergency room,” Bauer said.  On that day, she said, “we were twelve nurses short. There was a patient that deteriorated in the waiting room after waiting three hours to be triaged. This particular patient was seen to have a seizure. A seizure-like activity can happen when someone’s heart stops.”  Staff took him back in his wheelchair. “They worked on him and tried to save his life but he died,” said Bauer.

Bauer said, “Later on in that meeting Diane said smoothly that she wanted to clear up something that a nurse made in public comments. She said the patient had a seizure—and then went on to something else. She didn’t allude to the fact that the patient died.”

Bauer says the problem from her perspective, “is not either physician group. It is the fact that we have been horrifically understaffed for a long time.” We have had PODs (of beds) that have been closed on a regular basis while people are in the waiting room.” She added, “We have been telling them for well over a year that this would happen.” 

The incident of the patient dying and the board not being told about it is a reason, Dr. Rivera says, he would dismiss the CEO “for cause.”

He added, “When I was on the hospital board if any untoward event happened we were called that night.” 

3 responses to “Lawsuit claims Palomar board violated Brown Act when it awarded contract”

  1. David Tam says:

    It is profoundly disturbing that there is significant concern that Palomar Health, a California Public Health District System, supported by property tax revenue and governed by elected officials, has NOT followed the Brown Act – not merely a technicality, but part of the checks and balances that ensures government serves the people. What is even worse is that Palomar is not responding to address this issue in a manner that addresses the concerns of the voters who actually “own” Palomar Health. Board Members are actually elected officials who are responsible to the people. Administrators are public employees like a city manager or a school district superintendent who have a higher level of accountability to the people of the community.

  2. Carmen Miranda-geiffirh says:

    The decision to go with a new group of doctors is not just to get rid of doctors, it’s to improve the service and care to patients and this community.
    The problem in the past 40 years is that the past CEO and old boards was that they would just renew the contract year after year.
    This new CEO and new board want to change to improve care and improve results. Palomar has been eating pretty low within our community in service.
    If Dr.Rivera would have an open mind and sight in the future care, he would realize that the care and service needs to improve at palomar and serve our community better. Change can be hard, but change is also good. We get fresh doctors with top training and a better service foe all.

  3. Karl Marzec says:

    Thank you David Ross for revealing some of the egregious actions demonstrated by the Palomar Health CEO, CMO and CFO. They are threatening the safety of our community!
    I am a physician at Palomar and everything you wrote is absolutely true.
    Please continue to follow this story until changes are made.

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