By Glynis Hart
[email protected]
SPRINGFIELD, Vt. — Former president and chief executive officer of Springfield Hospital and Springfield Medical Care Systems Tim Ford filed suit in United States District Court Wednesday, seeking punitive damages against the hospital board and Quorum Health, a hospital management company, for defamation of character, slander and conspiracy. Ford alleges he was forced out last December and did not willingly resign.
The suit alleges Ford resigned under pressure and was taken by surprise. It further alleges that Ford was pushed out to cover up malfeasance by the hospital board and Quorum Health, and that their intention was to drive the hospital into bankruptcy and profit by its collapse.
The hospital has been in financial difficulty for some years, dating before 2013 when Ford was hired.
The suit states that the hospital’s financial situation improved under Ford from 2015 -2017, and that in 2016 the board awarded him a 33% raise to retain him. According to the lawsuit, Ford received positive performance reviews almost to the day he was forced out, and that he was taking a series of steps to put the hospital in better financial order.
Those steps included: Changing the Emergency Department provider; increasing Emergency Department reimbursement with a new system documenting stand-by time; adding a dentist and closing a clinic in Chester; changing the benefit plan; adding a urologist to meet demand; obtaining additional payments from the state; developing a new marketing plan, and other initiatives. Ford had also reached out to Dartmouth-Hitchcock Medical Center about possible affiliation.
Ford and the SMCS Board “relied heavily” on Chief Financial Officer Scott Whittemore, who provided monthly financial reports to the board. Whittemore managed SMCS’ relationship with Berkshire Bank, which required SMCS to meet certain financial conditions. If those conditions weren’t met, the bank could do one of three things: call the note (demand immediate repayment of loans), hold off if it had proof the hospital had a viable plan to recover, or insist the hospital engage an outside consultant.
In the summer of 2018, according to the suit, Whittemore told the SMCS board the hospital was in danger of failing to live up to its agreement with the bank. Ford decided to hire an outside consultant without waiting for the bank to demand it, and so engaged Quorum on a temporary basis.
According to the suit, Ford was only interested in a temporary contract with Quorum because the company “had a well-reported record of failure.” An article in Health Care Finance News, in September 2018, reported Quorum Health “ended the first nine months of 2018 with a net loss of $179.5 million” and “has been steadily selling off hospitals in an attempt to stabilize its finances.”
Ford “trusted Quorum to provide a fresh perspective,” but “did not trust Quorum to manage SMCS as a going concern,” according to the court document.
Cheating on taxes
On Nov. 30, 2018, a hospital auditor allegedly informed Ford that payroll taxes had not been filed for three months: an estimated payment of $3.8 million. However, Whittemore had submitted financial reports to the board showing those taxes as paid. Ford received written proof of the failure to pay from the auditor, informed SMCS Board Chairman George Lamb, and recommended terminating Whittemore immediately. Whittemore was fired on Dec. 3.
Ford then turned to Quorum for an interim chief financial officer “because SMCS had nobody else qualified and available” but, according to the suit, “would not have approved of hiring a Quorum employee as an interim CFO had he not expected and intended to remain as CEO.”
Ford then said he scheduled a meeting with Green Mountain Care Board for Dec. 17, 2018, intending to “provide full and accurate disclosure” of the false financial reports, penalties (about $600,000), plans to work with the IRS and other financial details. The meeting, according to Ford, would also have included the steps Ford was taking to correct the financial imbalances.
The lawsuit alleges that Quorum employees and the SMCS board members “conspired and agreed not to provide the full disclosure Mr. Ford had recommended.”
Instead, at 8:30 a.m. Dec. 12, Lamb and Richard Dexter III went to Ford’s office and demanded his resignation. The suit alleges that the two men told Ford either he resigned in the next 15 minutes, or they would fire him. Further, they denied him the 12-month severance benefits promised in his contract, terminated his computer access and disabled his email account.
Suit alleges hospital board malfeasance
During his tenure, Ford alleges, he learned of “two significant financial burdens which could not be considered in any cost-cutting strategy because Defendants Lamb, (Eric) Bibens and (Robert) Flint had personal and/or financial interests in them.” These included paying higher than market rates at 100 River St. and SMCS’ ownership of the Edgar May Recreation Center property. The suit further alleges that the CEO before Ford resigned after Bibens and Lamb told him to approve the purchase of the property “which the CEO opposed because of significant potential environmental liabilities.”
Bankruptcy strategy
In February 2019 the hospital cut 27 staff positions, following up with a 4% pay cut across the board; 35 more employees subsequently quit. By April, SMCS had lost 77 staff members and was turning away patients. The hospital later restored the pay cut.
On June 26 the SMCS board filed for bankruptcy protection, at the same time passing a resolution to engage Quorum Health Resources as consultants. SMCS and the hospital have reportedly lost $14 million over the last 2 years.
Ford’s suit alleges that “consistent with Quorum’s pattern and practice with other financially challenged hospitals,” the representatives of Quorum deliberately pursued financial strategies they knew would drive the hospital into bankruptcy “with the expectation…they would be able to walk away … when it was no longer possible to extract any more funds from SMCS or Springfield hospital.”
Defamation
Finally, Ford alleges that the board deliberately made statements to the media that made it look like he was responsible for the hospital’s financial distress, and implying that firing him was part of their effort to address that. Flint, Dexter and Lamb allegedly issued a “gag order” on all hospital employees prohibiting them from talking to anyone outside SMCS or contacting Ford.
The suit states that Ford’s career has been derailed as a result of SMCS’ defamation. He is asking for his severance pay to be restored, and leaving it up to the jury to decide punitive damages. As of the filing of the suit, Ford’s unpaid wages total $230,894.
Springfield hospital officials declined to comment on the suit.
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