National accounting firm to examine West Jefferson hospital’s books after lease deal inaccuracies surface _lowres

Advocate staff photo by SHERRI MILLER -- West Jefferson Medical Center in Marrero on Thursday, Dec. 18, 2014.

It’s been mere days since Jefferson Parish concluded more than a year of political wrangling by closing the deal to lease the publicly owned West Jefferson Medical Center to a private operator, but already another disagreement involving the Marrero hospital has broken out.

In the middle of this one are at least some members of a board at West Jefferson that advised the Parish Council on hospital matters. In return, the members received health benefits under West Jefferson’s health insurance plan at no cost. But, as of now, they will lose those benefits under the lease deal, which will be in effect for a minimum of 45 years and guarantees the parish almost $600 million in rental fees, capital improvements and other payments.

The board members are being transferred to a subsidiary board that will report to the main governing body of private operator LCMC Health, which won’t offer them a health insurance plan or any other compensation.

Meanwhile, the Parish Council must decide who will sit on a new hospital board that will report to it; what its function will be with a private, nonprofit operator managing the West Bank medical center; and whether the new board will make recommendations on how the parish should spend the proceeds from the LCMC deal — money that is supposed to be used to meet community health care needs.

Finally, the council must decide if the new board’s members, mostly appointed by the council, will get the same benefits that the members of the previous board did.

A recently approved ordinance prohibits people from simultaneously sitting on both the hospital board that will report to the Parish Council and the one that will serve under LCMC’s primary governing body, but the council could be asked to reverse that restriction.

If that prohibition is struck down, it could set up a scenario where hospital board members who lost health benefits in the wake of the parish’s lease deal with LCMC might get them back.

Harry “Chip” Cahill — who before the lease closed was the chairman of the 10-member board at West Jefferson reporting to the Parish Council but who is now part of the 14-member board reporting to LCMC — said he doesn’t see a problem with him or others sitting on both bodies.

He said at least some overlap of the boards would help ensure that the two bodies are in sync and that dual members could recuse themselves from voting on issues that present a conflict of interest.

But others find such an arrangement problematic.

Joshua Nemzoff, a Philadelphia-based consultant whom Jefferson Parish hired to help negotiate the lease deal with LCMC, said permitting dual memberships could set up a situation in which the people making recommendations on how the parish’s proceeds should be spent would suggest that those dollars be used to benefit LCMC, to which they also would report.

“This could provide a vehicle where LCMC gets its money back,” Nemzoff said, adding that, following a lengthy review, the state Attorney General’s Office signed off on the lease deal under the belief that nobody would serve on both boards at the same time.

Nemzoff, whose contract with the parish has expired, said, “It’s an enormous conflict of interest.”

Following complicated negotiations that began in 2014, the West Jefferson lease transaction was officially closed Wednesday morning, and LCMC took control of the hospital at 12:01 a.m. Thursday.

At the same time, Cahill and nine other men appointed by parish officials to serve on the West Jefferson advisory board that reported to the Parish Council about the day-to-day operations at the hospital became part of a 14-person advisory board overseen by New Orleans-based LCMC Health’s governing board.

Aside from Cahill, the men were Dr. Frank Di Vincenti, James Cramond, David Andignac, Barry Bordelon, Jean Lafitte Mayor Timothy Kerner, William Lazaro Jr., Westwego Police Chief Dwayne “Poncho” Munch, Dr. Otholino Remedios and former Jefferson Parish Councilman Byron Lee.

Their job under the new arrangement will be in essence the same as it was before: advising the operator on how to run the hospital.

While none of them received a stipend for serving on the hospital board, they were “provided health insurance benefits under the medical center’s health insurance plan,” West Jefferson audits said. Precise details of those benefits aren’t outlined in the audits and were not made available to The New Orleans Advocate.

Nonetheless, LCMC CEO Gregory Feirn said this week that Cahill and the others will not receive such benefits from his firm while they serve terms of various lengths on the private operator’s subsidiary board.

“Board members of LCMC Health and its member hospitals receive no compensation or any additional benefits for their service,” Feirn said. “As we welcome the West Jefferson Medical Center board members to the LCMC Health family, we will continue to adhere to this policy.”

Noting that he was speaking only for himself, Cahill said he plans to serve on LCMC’s subsidiary board despite the loss of benefits because he believes he owes something to the firm after the long negotiations. However, he said he and others were “going to try to work it out to sit on both boards.”

It isn’t clear yet what serving on the new hospital board reporting to the Parish Council will entail. It doesn’t have any appointees yet nor any defined responsibilities, several council members said.

However, the council passed an ordinance Sept. 23 preventing the boards from sharing members.

Cahill said that prohibition is not necessary because the mission of LCMC’s subsidiary board at West Jefferson jives well with what the aim of the parish’s new hospital board should be: ensuring the lease deal ultimately broadens health care offerings in the community.

“At least at the beginning, it would be good to have people on the two boards,” Cahill said. “They do things that complement each other.”

Cahill said Parish Council members also should strongly consider continuing to provide health insurance to their appointees on the new board under them.

Cahill said the lease transaction created a situation where at least some board members suddenly lost their only health insurance. Cahill, a lawyer, said the insurance he had through the old hospital board was secondary to a plan he had through his full-time job, but not all of his colleagues were so lucky.

Allowing those members to again serve for a time on a board reporting to the Parish Council and offering health insurance would simulate the temporary COBRA benefits people who suddenly lose jobs are afforded under a federal law, Cahill said.

Not everyone is of the same mind as Cahill on the matter, though.

Aside from the concerns cited by Nemzoff, one parish councilman said he would oppose any proposal to provide members of the new hospital board the same benefits given to their predecessors.

“I’m not ... in support of appointing another political board, with the same old members to simply benefit from ... expensive perks and with no real duties,” Councilman Ben Zahn said. “As it stands now, the current council is the hospital district, and we should not abdicate our duties as good stewards of taxpayer money.”

Whatever the outcome, the disagreement could begin to get hashed out soon.

Parish Attorney Deborah Foshee, who advises both the Parish Council and its administration, said she expects officials to schedule a discussion of the issue “shortly.”