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.

From Tuesday night to Wednesday afternoon, a consultant who has been advising Jefferson Parish on efforts to lease a public hospital in Marrero to a private operator resigned from the project, threatened to sue the Parish Council chairman — and then agreed to come back aboard and see his work through to the end.

Consultant Joshua Nemzoff on Tuesday night sent an email to some Parish Council members saying he was quitting his work on the project to lease West Jefferson Medical Center to LCMC Health because he was informed the parish would not pay his July bill unless he provided “significantly more detail” backing up his invoices.

In a separate email Wednesday to Parish Attorney Deborah Foshee, an attorney for Nemzoff spoke about potentially filing a lawsuit against Parish Council Chairman Chris Roberts, whom he accused of making “false and slanderous” statements about Nemzoff recently.

Later Wednesday, though, Parish Councilman Ben Zahn — who has supported Nemzoff’s role in the lease deal — said the consultant and Foshee’s office had agreed “in principle” to resolve their differences.

Nemzoff confirmed that was the case, saying, “We reached an amicable agreement as to what level of detail I need to provide (on the invoice for the July bill), and we’ll all move forward.”

Nemzoff’s pay has been a source of tension with certain parish officials from the start. He was initially hired last year for a flat fee of $625,000. But after parish Inspector General David McClintock questioned the arrangement, parish officials asked Nemzoff to bill hourly instead so they could track his progress toward closing a deal.

Nemzoff ended up charging the parish about $1 million under that arrangement.

When Nemzoff’s original contract was supposed to expire earlier this summer, Parish Council members Elton Lagasse, Ricky Templet and Roberts voted against extending it. Cynthia Lee-Sheng, Paul Johnston, Mark Spears and Zahn voted to renew the contract through at least Sept. 5.

A WVUE-TV report last week highlighted what Nemzoff’s critics called a lack of detail in his invoices. Nemzoff maintained the parish didn’t require his invoices to provide exhaustive work descriptions — only general ones.

In his resignation email, Nemzoff — a Pennsylvania-based hospital mergers and acquisitions specialist — said it bothered him that two other matters haven’t drawn more scrutiny: initial financial statements from West Jefferson Medical Center that didn’t hold up after an audit, plus hefty payments to two hospital executives when money is supposedly tight.

The unaudited financial statements claimed West Jefferson generated about $15 million in cash in 2014. An audit subsequently revealed that the hospital generated only about $5.6 million.

As a result, the estimated worth of West Jefferson fell by about $50 million in an updated valuation provided to LCMC. There’s been speculation that LCMC might seek to alter the lease deal’s terms as a result.

Under an arrangement approved unanimously by the council in February, LCMC was to lease the hospital for a minimum of 45 years in return for up to $245 million in payments to the parish and $340 million in capital improvements.

The payments Nemzoff referred to were for Michael Adcock and Angela Greener. Before stepping down recently from the position of chief operations officer at the Marrero hospital, Adcock earned an annual salary of $200,000. Over the past nine months, he received an additional $90,000, Nemzoff said in an email to council members days before his resignation.

Greener replaced Adcock as COO. Her annual salary is $215,000, and over the past nine months she has received $135,000 in additional payments, Nemzoff told council members.

Nemzoff’s email Tuesday night excoriated West Jefferson CEO Nancy Cassagne, saying she should be questioned more closely. The parish decided to lease out West Jefferson in the first place because the hospital was depleting its reserves to offset falling revenue.

“It seems that it is very convenient for other people to constantly attack me both professionally and personally,” Nemzoff said in his resignation email.

In that message, he called it a pleasure to work with Zahn, Lee-Sheng, Johnston and Spears — but he did not say the same about any other parish officials.

In the email to Foshee, Nemzoff’s lawyer, Ernest Badway, singled out Roberts for criticism.

Roberts had said recently he was concerned the consultant was “churning” his bills and that his invoices were supposed to be meticulously detailed. Badway said both of those assertions were “patently false and slanderous.” Churning, or doing unnecessary tasks to run up a client’s bill, is at best unethical and at worst illegal.

Badway also asked Foshee whether she would represent Roberts in the event of a lawsuit by Nemzoff.

On Wednesday, Roberts responded, “I think it’s clear that — if you get paid $600 an hour for services ... using public money — we have to exercise the highest level of review to ensure money being spent pertains to the actual transaction.”

The West Jefferson lease deal won’t officially close until after the state Attorney General’s Office completes a review of the arrangement.