Highly Paid "Skilled Executives and Visionary Leaders" Sue a Whistleblower

In May, we wondered what some hospital executives did to justify their munificent compensation.  Now we have found out a little more.

Specifically, we noted that at Wake Forest Baptist Medical Center, the CEO got $1.68 million in fiscal 2009-2010.  The President got $859,521. The CFO got $734,282.  A hospital statement at the time called them "skilled executives and visionary leaders," but provided no evidence to support this claim.

Audit Showed the Hospital was Overpaid

Now recent news stories show just how skilled and visionary these leaders are.  The Winston-Salem Journal reported how a state health insurance plan had overpaid the hospital, and the hospital had refused to give the money back. 

N.C. Baptist Hospital is keeping about $1.34 million in reimbursement rate overpayments from the State Health Plan.

The figure was revealed Wednesday in a State Auditor's Office report on the contract between the two groups. Baptist disputes the description of the amount as an overpayment.

Plan officials said they will not attempt to recoup the money, which Baptist has declined to repay because it said it complied with the terms of the contract.

'The plan views this as a legal matter, and Baptist Hospital is under no legal/contractual obligation to pay back the overpayments,' said Beth Horner, spokeswoman for the plan.

The state auditor was none too pleased:

However, Beth Wood, the state's auditor, said she believes Baptist has an ethical obligation to pay some, if not all, of the overpayment it received from 2003 to 2008.

A local health care expert also had a dim view of the medical center's actions:

Adam Linker, a health-care analyst for the N.C. Justice Center, said the plan 'had the right to ask for more discounts with the Baptist rate increase and failed to do so because it had written a sloppy contract and poorly monitored it.'

'But Baptist failed to notify the plan in a direct manner of the rate increase. It clearly had the obligation as a good partner with the state to give the discount in the spirit of the contract, and not take advantage of a sloppily written, poorly monitored contract.'

The leadership at Wake Forest Baptist apparently were not interested in these ethical distinctions. 

The Hospital Sued the Whistle Blower

Instead, they decided to attack the messenger, or sue the whistle blower in this case.  The Winston-Salem Journal's next relevant story stated:

A former N.C. Baptist Hospital employee has spent thousands of dollars defending himself in a lawsuit by the hospital accusing him of 'unjustified, vindictive, malicious and gratuitous actions' for alerting state officials that the State Health Plan was overpaying Baptist.

The case of Joseph Vincoli, a former administrative director at the hospital who was terminated, is an example of how little, if any, legal protection a private employee may have when filing a whistle-blower complaint that could affect a state agency and taxpayer money.

A state auditor's report released Wednesday appears to confirm that Vincoli's complaints had validity. He alerted state officials in January 2009 that Baptist was collecting more than it would have been entitled to if the State Health Plan had known about hospital rate increases and had insisted on getting rate discounts it was eligible for.

In addition,

Vincoli, who lives in Clemmons, declined to be interviewed by the Winston-Salem Journal, because he is under legal threat, but Phil Michael, an attorney representing Vincoli, said the state audit report was 'a bittersweet resolution' to the overpayments dispute.

'Joe encountered a situation where the hospital received money he believed it wasn't entitled to, and he did what he believed was his duty by reporting it to the state,' Michael said.

The Baptist lawsuit, filed Jan. 26, accuses Vincoli of breaching their confidential settlement by contacting the plan and other state agencies about his concerns and 'providing disparaging and/or confidential information.'

Vincoli worked at Baptist as its managed-care director from July 2006 to October 2007, when his employment was terminated by the hospital.

The Baptist lawsuit said Vincoli's actions have caused the hospital 'to suffer embarrassment, negative false publicity, loss of goodwill with the state of N.C. and the communities the hospital serves, and financial loss including, but not limited to, attorneys fees.'

'Vincoli had no legitimate reason to involve himself in the SHP contract issue' as a private citizen and later as an employee of two state agencies, the hospital said. Vincoli now works for the N.C. Department of Corrections.

Didn't they used to teach in citizenship classes that us ordinary civilians are supposed to notify legal authorities when we see something suspicious? That does not appear to be how the august leaders of Wake Forest Baptist see it.

In my humble opinion, but based on the auditor's findings, it was the hospital leadership that caused the institution "to suffer embarrassment, negative false publicity, loss of goodwill with the state of N.C. and the communities the hospital serves...."

As a Winston-Salem Journal editorial put it:

The nonprofit hospital has built a good corporate legal defense. Meanwhile a good citizen, a whistle-blower, lost his job and will pay thousands to defend himself for doing what most people should view as the right thing. We commend him.

The hospital will likely prevail on the legal issues. As a corporation, it has a duty to do so. But on the moral scorecard, it loses.

Summary

So now we see just how "visionary" the executives of Wake Forest Baptist are. They seem to have visions about bullying whistle blowers who dare poke their noses into the hospital's dubious financial schemes operated at the expense of local tax-payers. Suing Mr Vincoli would be a low tactic for garbage hauling company to use, but it is incomprehensible how a hospital system could employ it. The "skilled executives" made a mockery of the institution's lofty vision statement, which included:

Compassion - responsive to the physical, emotional, spiritual and intellectual needs of all

and

Integrity - demonstrate fairness, honesty, sincerity and accountability

It looks like protecting revenue and denying that the visionary leaders could make an error trump compassion and integrity.
So perhaps the recent high pay of top hospital executives was a terrible error. Maybe the board had no idea what sort of ruthless people it had hired. Or maybe they had a perfect idea, it was no error, and the board wanted to encourage the most ruthless leadership it could, as long as it made money.

Perhaps the executives and board members will yet explain why they went after Mr Vincoli.

Meanwhile, this case is the latest example of why we need much better legal protections for whistle blowers in health care.

So, I turn blue in the face repeating.... health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior.


If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.