Incompetence may be main reason for UMC’s woes

By Marshall Allen (contact), Tony Cook (contact)

Thursday, Feb. 1, 2007 | 7:07 a.m.

Incompetence may be the primary reason that Clark County commissioners will reexamine a controversial cardiology contract at University Medical Center.

Former UMC boss Lacy Thomas allowed his hospital's $1 million-a-year cardiology contract with Heart Center of Nevada to expire - without taking action - on Aug. 31. That's despite the six-month warning he received from UMC's contracting department.

His oversight put a rush on forging UMC's new cardiology agreement - a $5 million-a-year deal with physicians from a different group, Nevada Heart and Vascular Center.

Then on Dec. 20 Commissioner Yvonne Atkinson Gates voted for the new contract without disclosing that her company, Built By Yvonne, was bidding at the same time to build a custom home for Dr. Raj Chanderraj, one of Nevada Heart and Vascular's partners. Her vote was one of the four required to award the contract.

Atkinson Gates claims she did not know Chanderraj was a partner with Nevada Heart and Vascular - even though she met briefly to discuss the contract with him and Dr. William Resh, managing partner of the group. She says she does not recall the meeting.

The haphazard way that the contract was awarded, combined with other questionable actions by Thomas, has created chaos that commissioners now must untangle.

The situation is complicated by a Metro Police investigation of Thomas' administration. Thomas allegedly gave no-work contracts to his friends in Chicago, and the specter of the police probe is casting a shadow on the publicly owned hospital's operations.

UMC officials now recommend that commissioners cancel three of the contracts named in the criminal investigation. Those contracts are with Great Lakes Medicaid, which was hired to enhance the program's eligibility process; ACS Consultant Company Inc., which handled UMC's patient billing and collection; and Taylor Consulting, which was to review patient accounting, billing and collection practices.

Chris Giunchigliani, who joined the commission after the cardiology contract was approved, said that deal, too, may need to be voided because the commissioners were given misinformation at hearings where the contract was discussed.

Contrary to what UMC officials said at the time, Heart Center, the previous contractor, had wanted to renew its agreement from the beginning. Moreover, the company would have done so for $1 million less than Nevada Heart and Vascular, she said.

"If the way it was enacted is in question, or enough information had not been provided to commissioners, there is enough reason to bring it back and void it," Giunchigliani said.

Dr. Dost Wattoo, managing partner of Heart Center, argues the Nevada Heart and Vascular contract should be canceled because of Atkinson Gates' conflict of interest.

"They have to disqualify the previous contract because it was not done in a fair manner," Wattoo said.

The district attorney's office is researching the legality of terminating the cardiology contract.

Kathy Silver, UMC's acting chief executive, said there are no problems with how the contract was awarded and has recommended that commissioners keep the agreement.

Chanderraj, who used his political clout to schedule the meetings with commissioners, said he welcomes the scrutiny of the Nevada Heart and Vascular contract.

"I see it as a welcome opportunity because it will vindicate us," Chanderraj said. "All the meetings were upfront with the commissioners."

Questioning the contract is unfair, Resh said, because the criminal investigation of Thomas is "in the background of all this right now" and the contracting process was "fair and open."

He also doubts that commissioners can legally revoke the agreement. The contract states that UMC cannot cancel for three years without cause, which is one reason critics questioned the deal.

"Common sense would tell me I have a signed, executed contract," Resh said. "I don't know what they could do."

The thought of losing the new contract has UMC's cardiology department in a panic, Resh said.

Joy Guideng, director of cardiovascular services, said it would be an enormous loss to end the Nevada Heart and Vascular contract, which is delivering far superior service to that provided under the previous agreement.

UMC had regular complaints with the previous doctor group, she said. Heart Center cardiologists were one to four hours late multiple times a week, and test results often were delayed more than 48 hours, Guideng said.

Complaints were routinely made to Wattoo and Heart Center, Guideng said. Wattoo conceded he heard complaints, but said none was ever put in writing.

The Nevada Heart and Vascular contract pays $5 million annually, with a clause to repay a portion of patient payments to the hospital. The higher payment brings a much better standard of service, Guideng said.

Similarly, Silver conceded that the $1 million paid under the previous contract might not have been sufficient to do a good job.

Heart Center started working at UMC in 2003 and agreed to a 60-day extension after its contract expired Aug. 31. Although Wattoo said he always was interested in renegotiating the agreement, Silver claims Wattoo specifically told her he did not want to continue the contract and that UMC should shop it around.

"I, at no time, indicated I was not interested in UMC," Wattoo insisted.

Had Thomas started a competitive process six months before the contract expired, commissioners next Tuesday likely would not face the unpleasant prospect of sorting through the confusion and the contradictory claims by opposing parties.

In September UMC spoke to other cardiology groups that could have handled the contract, but only Nevada Heart and Vascular offered a proposal, Silver said. Heart Center, however, became interested after hearing the $5 million figure, she said.

Wattoo also disagrees with Silver on that point.

He said he told Silver in September that he wanted to make an offer and asked to meet with Thomas. The chief executive refused to meet, he said.

Wattoo said he declined to work beyond Oct. 31, when the 60-day contract ended, because UMC would not give Heart Center the first right of refusal on any new contract. After Silver refused to give Heart Center that right, Wattoo contends he insisted on bidding for the contract.

Heart Center made its first offer in early November, later amended to become a final offer of $4 million that included the same payback clause as the Nevada Heart and Vascular contract.

Silver said the past history with Heart Center and the promised approach of the new group - which included reaching out to other cardiologists in the community and bringing more business to UMC - helped seal the deal.