Escalating the antagonistic back-and-forth squabbling over West Jefferson Medical Center's finances, an official with LCMC Health has accused Jefferson Parish officials of knowingly submitting an erroneous report as a negotiating ploy, according to a copy of a letter obtained by The New Orleans Advocate.
An attorney for the parish responded harshly Tuesday, calling any suggestion that parish officials were acting in bad faith "insulting and preposterous."
The latest tit-for-tat comes as parish and LCMC officials haggle over the so-called "clawback" amount, a payment that LCMC says the parish owes it before the deal for the company to take over the parish-owned hospital can be completed.
The two sides are about $4 million apart. LCMC contends that the parish owes it about $5 million. The parish, bolstered by a report from accounting firm Ernst & Young, says the amount is closer to $1 million.
The amount is a tiny portion of the $500 million, 45-year lease agreement the two struck in 2015 as the parish sought a private operator to take over the struggling West Bank hospital. But it's a significant sticking point.
LCMC chief legal counsel Ricardo Guevara took direct aim at the Ernst & Young report in his letter to the parish.
"The most erroneous aspect of the E&Y report that was delivered to us was the inclusion of clear errors and omissions totaling $3,734,159," Guevara wrote.
It appears, Guevara continued, that the parish had knowingly allowed a flawed report to be produced "so the 'negotiations' could begin from a much lower and arbitrary and erroneous amount," he said. Some of the corrections suggested by LCMC are based on " 'black and white' facts and they are not a dispute of accounting theory, and therefore are not negotiable," he said.
Guevara's letter prompted a fiery response from Joshua Nemzoff, the consultant hired by the parish to advise it on the deal.
Hospital representatives as well as Ernst & Young have been working on the deal "in good faith," Nemzoff wrote in an email to Guevara. "It is amazing to me that you would be stupid enough to make such an accusation."
Contacted by phone, Nemzoff backed off a bit. "I like Rick," he said of Guevara. "He's a nice guy."
The problem, Nemzoff said, is that parish negotiators have asked LCMC several times to provide documentation of its claim that the parish owes it the extra money, and that has not been done.
"We are just basically saying, 'Show us some data,' " Nemzoff said. "We don't have any data."
The parish also fired back Tuesday. Saying that parish officials acted in bad faith in "an effort to commence 'negotiations' is insulting and preposterous," wrote Jacques Molaison, a parish attorney who has been the point man on the hospital lease negotiations. "I would suggest we adhere to our profession's standards of professionalism, and refrain from finger-pointing."
Asked about the letters, an LCMC spokeswoman provided a written statement that affirmed the company's commitment to working "collaboratively and transparently" and promised to continue to provide "accurate and complete information."
The upshot is likely to be more delay. Although both sides seem open to continuing direct talks, LCMC has invoked a clause in its agreement with the parish that will send the disputes to a third-party accounting firm, which first must be identified and and hired.
The parish recently issued a call for regional and national firms with experience in health care transactions to submit their qualifications to the parish, with the goal of eventually being hired to help resolve the disputes.
"I don't think this is going to get resolved any time in the next six months," Nemzoff said.