Coast Hospital: Code Red (Ink)

by Malcolm Macdonald, August 2, 2017

According to a long time employee of Mendocino Coast District Hospital (MCDH), the President of that institution's Board of Directors, Steve Lund, attempted to harass and intimidate the employee during a March 17th encounter in the employee's office. Nearly two months earlier, this employee, a Patient Accounting Manager, had filed a complaint against Chief Financial Officer (CFO) Wade Sturgeon, alleging that Sturgeon had harassed and threatened the worker.

In the fall of 2016, the Patient Accounting Manager had noted major problems in the coding and billing done by the hospital's new emergency room provider, EmCare. These billing errors could have resulted in the loss of millions of dollars in MediCare PIP (Periodic Interim Payments) for the hospital, all of which was detailed to Sturgeon in a November email authored by the Patient Accounting Manager.

In December, 2016, the employee noted the problem with EmCare's billing to CFO Sturgeon in person, with a comment along the lines that if Medicare found out MCDH's administration had been sitting on potential billing fraud for months, they (Medicare) would come in and take over the hospital's administration. Apparently Sturgeon did not take kindly to such a remark. According to the Patient Accounting Manager the CFO said that if anything like that happened the employee and all her co-workers in the department would lose their jobs. According to the employee, comments, in a similar vein, continued into the new year. The employee took this as even more of a threat after the January 4, 2017, Finance Committee meeting, at which the Patient Accounting Manager was “extremely surprised to hear [Sturgeon] report all the issues with the implementation of EmCare had been resolved at the end of November. In fact, as of January 4, 2017, when he was reporting, NONE of the issues brought forth by the previous and current Medical Records Manager and myself had been resolved.”

The Patient Accounting Manager also pointed out discrepancies in Sturgeon's January 4th statements to the Finance Committee concerning a backlog of Medicare claims for the hospital's clinic, North Coast Family Health Center (NCFHC). Even after the Patient Accounting Manager filed her harassment claim against Sturgeon in the last week of January, 2017, payments to doctors affiliated with NCFHC dwindled to near zero by March.

One of those NCFHC doctors was opthamologist Kevin Miller, a member of the MCDH Board of Directors. The Patient Accounting Manager shared many of her concerns about Sturgeon's financial methods with Dr. Miller in a three page letter dated March 13th or 14th. With a job performance review of Sturgeon scheduled before the board on March 16th,  Dr. Miller approached the Patient Accounting Manager at the hospital. She remembers that Miller asked her if she “was able to continue working with Wade Sturgeon at Mendocino Coast District Hospital. I hesitated in responding and he [Miller] stated he was aware of my complaints to Human Resources… As I continued to hesitate, he said to consider the harassment and threats only in my answer and not the reports of 'misinformation.' I finally responded and said no, I couldn't [work with Sturgeon]. I added that I had to consider everything, and my answer would be no.”

The next day, March 15, 2017, Miller again asked the employee questions regarding the letter she'd written to him. She responded by pointing out that Sturgeon's 'misinformation' was “actually dishonesty and lacking in integrity.”

Miller pressed on. According to the Patient Accounting Manager, “He said he didn't believe our hospital could survive another Administrative turnover. He asked again if I could get past or set aside the harassing behavior of Wade and continue to work with Wade at the hospital…

“My answer was again no, but to even have the question posed, I felt great uncertainty in my future employment.”

On March 16, 2017, the Board held a closed session performance review of CFO Sturgeon. The performance review focused on an earlier harassment complaint filed by the Chief Human Resources officer against Sturgeon. By this date, not only had the Human Resources Chief been placed on leave for an extended period, CEO Edwards had fired the HR Chief's main assistant, seemingly suspecting that person had been leaking information about the HR Chief's case (an unfounded suspicion as far as all evidence indicates), and the longtime Risk Manager had left the hospital for another job, apparently after expressing to the board her support for the HR Chief and ethical questions regarding Sturgeon and Edwards that prevented the Risk Manager from continuing to work alongside the pair.

At the conclusion of the Thursday, March 16th closed session, Board President Lund announced that no decision had been made concerning Sturgeon's performance review. Lund also said that the board would be conducting further interviews with staff members regarding the matter.

The next day, according to the Patient Accounting Manager, “Board President Steve Lund came to my office to talk to me. He began by telling me he had a copy of my letter [to Dr. Miller, which, the employee told this writer, Lund waved in the her face]... I clarified with him that I was not asking questions in my letter, I was pointing out discrepancies in the financial information pertaining to Patient Accounting that were given to the Finance Committee and Board of Directors by Wade Sturgeon, CFO, from the actual data in Patient Accounting.

“I also pointed out to Steve that I knew he was very much aware of my formal complaints of workplace harassment and threats I received from Wade Sturgeon... Due to those circumstances I was fearful for my job and was not comfortable discussing conflicting information that [Sturgeon] reported on.”

The Patient Accounting Manager went on to tell Lund about a March 6thmanagers meeting at which CEO Edwards repeated the phrase “sloppy billing practices.”  She told Lund that Edwards “had repeated that phrase about six times throughout the meeting yet never clarified that 90% of the findings in the report he was labeling 'sloppy billing' actually pertained to issues beginning with the clinical departments.”

Three days later, at a March 20th managers meeting, as recalled by the Patient Accounting Manager, Edwards “continued to state there were 'sloppy billing practices' that needed attention.  At one point he asked everyone if they noticed he'd said that phrase five times. I found this to be pointed directly at me following my meeting with Steve the preceding Friday and his subsequent meeting with Bob. This was intentionally asked and set the tone going forward for a hostile work environment.”

At some point in the March 20th meeting the Patient Accounting Manager raised her hand to say that she, “found the phrase 'sloppy billing practices' very offensive. Bob interrupted me saying he hoped I found it repulsive. I went on to explain that 99% of the population interprets billing practices as Billing Office functions... I further explained because the community interprets billing practices as Billing Office, my staff and I are approached inside and outside of work by co-workers and community members questioning our competence.”

Documents made available to the AVA show that on March 21, 2017, the Patient Accounting Manager lodged formal complaints against the hospital's Chief Executive Officer (CEO), Bob Edwards, “for harassment, ridicule, and false allegations;” MCDH Board President Steve Lund “for harassment and intimidation;” and MCDH Board member, Dr. Kevin Miller, “for harassment and coercion.”

Remember Steve Lund's March 16th promise that the MCDH Board would conduct further interviews with staff before rendering a decision on CFO Sturgeon's job performance? It never happened, unless you want to count as an interview Lund entering an employee's office and waving a letter in the worker's face. What should be obvious to all readers: Lund committed inappropriate workplace interference. At the very least, his words and actions smack of intimidation. As does Dr. Miller's multiple visits to the workplace to question the Patient Accounting Manager. Appropriate interviews of staff members would take place in a board closed session with the hospital's legal counsel present.

By his comments to the employee, Dr. Miller seems to think that it is alright to ignore not only workplace harassment but, also, misleading financial reports by the CFO, in order to protect the administrative status quo. This appears to be a view shared by Lund and fellow MCDH Board members Lucas Campos and Kitty Bruning, as evidenced by their votes to retain Wade Sturgeon as CFO and their blind eyes in regard to the behavior of Edwards.

Here's another tidbit that came to light regarding that March 16th closed session. Much of Sturgeon's performance review was predicated on the investigation into harassment charges made against the CFO by the HR Chief. According to reliable sourcing a letter was sent to this Chief of Human Resources just two days after the March 16th closed session. The letter essentially asked the HR Chief to sign off on an employment termination.

What anyone from the public would have to wonder is if such a letter was sent to the HR Chief within a couple of days of the same board promising to conduct further interviews regarding her allegations, what sort of trust should the public place in said board if they tell the public one thing then follow up with a completely contradictory action of terminating the HR Chief, and the inaction of not conducting the promised interviews.

This summer the Patient Accounting Manager received a letter from MCDH stating, “An outside employment attorney was hired to conduct an independent investigation into the allegations [against Wade Sturgeon].”

The Patient Accounting Manager contends this “independent investigation” had very little, if anything, to do with her complaint against Sturgeon. The AVA asked an individual close to the situation at the time for verification. That individual stated that the “independent investigation” (paid for by MCDH) only examined the HR Chief's complaint against Sturgeon. That source went on, emphatically, “There was NO formal investigation outside MCDH on [the Patient Accounting Manager]'s complaints EVER!!!”

The pretext of investigation was perhaps exemplified by what happened at a June 13th special meeting of the MCDH Board. President Lund reported out of a forty minute closed session, “After careful deliberation of this matter, including a thorough, confidential investigation conducted by an outside, independent law firm, the Board of Directors has determined, by a four to one vote, of the members present, per its investigation of this matter, to retain the CFO in his present position in accordance with his current contract.”

Lund's statement appeared to be read from a typed sheet of paper. There were no computers or printers present in the Redwood Room of MCDH where the meeting was held, so this observer had to wonder how Lund knew what to type on the paper before the meeting began. Unless there was an alternative page that replaced “to retain” with “not to retain,” this procedure indicates that the closed session itself was something of a farce, that a majority of the MCDH Board had decided outside of the closed session setting to retain Sturgeon. Such an action, of course, would be a grievous violation of the Brown Act.

Violating the Brown Act is nothing new for the majority of this particular MCDH Board of Directors. They held another special board meeting at 8 a.m. April 1st (no joke) without fulfilling the legal requirement of twenty-four hours notice to the public and press. That meeting went forward with four Board members present even though the MCDH Board was apprised of the potential violation at the outset of the meeting.

The MCDH Board member absent from that April 1st get together, Dr. Peter Glusker, is also the only one who has consistently seen the light of reality in this ongoing charade of unethical behaviors. If the rest of the board: Lund, Miller, Dr. Lucas Campos, and Kitty Bruning cannot put the truth above another administrative turnover, they should do themselves and the tax paying public a favor and resign, posthaste.

The AVA offered a draft of this article to all five MCDH Board members as well as CEO Edwards and CFO Sturgeon on July 23rd. As of  July 26th only Dr. Glusker responded with some proofreading/editing comments. Dr. Campos and I enjoyed a good talk about several hospital issues after the Planning Committee meeting of July 25th. Perhaps there is hope for him. We'll see. Lund, Miller, Bruning, Edwards, and Sturgeon did not respond.

2 Responses to Coast Hospital: Code Red (Ink)

    • Judy Reply

      August 7, 2017 at 5:49 am

      Thank you for sharing the link Annie. Once again thank you Malcolm for reporting on this.

Leave a Reply

Your email address will not be published. Required fields are marked *