Management Firm Tapped To Run LICH Has a History of Fraud, “Abysmal” Management

more bad news for long island college hospital

Just a week after Long Island College Hospital announced it had selected Brooklyn Health Partners as the bidder that would bring it out of years of debt and dysfunction, DNAinfo reports that their chosen management company, Quorum Health, was once fined almost $100 million for defrauding the U.S. healthcare system, and has a history of lawsuits tied to negligent and shoddy business practices. Oh, good.

In a Times write-up last week, Brooklyn Health Partners is described as a “minority-owned business, run by [California-based developer Merrell Schexnydre] with ties to a West Harlem community activists” that was created explicitly for the purpose of bidding on the troubled hospital, and was chosen in large part because it carefully took into account demands of local community and union organizations. One local activist told the paper that “she was impressed with the Brooklyn Hospital Partners’ proposal because it promised to bring in a professional management company, Quorum Health Resources, to manage the hospital, and to hire as many former LICH employees as possible.”

Per DNAinfo’s report, though, Quorum… might not be the best choice:

The U.S. Justice Department alleged that Quorum Health kept two sets of books on its Medicare costs from 1985 to 1999 — one of which contained inflated, reimbursable medical costs, which it presented to the government for payment. And in a separate case, Quorum was accused of wrongdoing at an Alabama Hospital involving misallocated costs to inflate government payouts.

In April 2001, the company — one of the largest health care providers in the country — forked over $95.5 million to settle the two lawsuits.

The site also reports that the company has a number of more recent lawsuits, including one filed in February in which a Mississippi facility claims Quorum’s management was “so abysmal that the hospital’s chief financial officer vanished following a scathing report.”

For their part, Merrell Schexnydre say they selected Quorum for its proven “expertise,” and a spokesperson for Brooklyn Health Partners claimed to be unaware of the company’s legal troubles. Currently, Brooklyn Health Partners is still looking for funding to raise 10 percent of its $250 million bid in order to make a down payment on the facility, which is due by the first week of May, otherwise the bid will then go a different organization. At this point, we can’t imagine the association with Quorum will help.

Follow Virginia K. Smith on Twitter @vksmith.

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