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October 25, 2014

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Lacy Thomas’ rising star came crashing down with firing

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Former UMC chief Lacy Thomas.

When Lacy Thomas took the reins of University Medical Center in October 2003, Thom Reilly, Clark County manager at the time, lauded the public hospital’s new CEO as a man who possessed “that important blend of financial credentials with a commitment to social responsibility.”

Thomas came from John H. Stroger Jr. Hospital, formerly Cook County Hospital, with a reputation as an able executive skilled at maximizing patient billing collections and reducing losses.

UMC was losing money when Thomas took over, but those losses had been diminishing. He wasted little time seeking to cut costs by proposing that UMC privatize its Quick Care centers, improve insurance collections from patients and examine the financial viability of its pharmacy. It was during his tenure that the hospital began constructing a $56.9 million tower that included an expanded Lion’s Burn Care Center.

County commissioners fired Thomas three months before the unveiling of that tower.

In late 2005, Clark County Audit Director Jerry Carroll red-flagged a financial-management contract Thomas awarded to ACS Consulting for patient billing and debt collection. A subsequent county audit found that the hospital suffered a $6 million decline in revenue collection during the first year of that contract. Yet ACS managed to get more than $1 million for what was supposed to be a pay-for-performance arrangement.

George Stevens, the county’s chief financial officer, reported that the hospital stopped providing monthly financial reports to the Clark County Commission, which oversees UMC. Angry commissioners demanded answers.

When Thomas couldn’t provide all the answers that the commissioners and County Manager Virginia Valentine wanted, he was fired.

It turned out that UMC had failed to pay many of its vendors on time and that the hospital, according to an independent audit, had lost $34 million the previous fiscal year, not the $18.8 million Thomas told commissioners.

The first of Thomas’ five theft charges centers on ACS, also known as Superior Consulting, which a grand jury said was run by longtime friends or associates of his. The indictment notes that the hospital was obligated to pay ACS/Superior for collection work already performed by a county agency. The ACS contract was “grossly unfavorable” to UMC, the indictment states. The hospital was locked into a long-term contract regardless of whether the company was successful at increasing hospital debt collection.

Also singled out in the indictment are contracts awarded to:

• Frasier Systems Group, a company owned by Thomas’ friend Gregory Boone of Chicago. It was reportedly paid $673,268 by UMC to plan and implement a manager’s office for hospital projects, but allegedly never performed any work.

• TBL Construction, a company owned by Las Vegas contractor Al Barber. It was given a $35,000 contract to oversee the installation of landscaping and electrical work for UMC’s Northeast Tower expansion. But it was alleged that this work had been covered in a separate agreement with the general contractor and that TBL did not do any work under its own contract.

• Premier Alliance Management, a company owned by Thomas’ friend Orlando Jones of Chicago. It was paid $5,000 to analyze and report on planning, priorities and communications systems at UMC, but allegedly provided no such report or analysis. Jones was found dead on a beach in Michigan in September 2007. Authorities said he had shot himself in the head.

• Crystal Communications, owned by Jones and another friend of Thomas’, Martello Pollock of Chicago. The company was hired for a reported $132,780 to oversee the selection and installation of telecommunications equipment for the Northeast Tower but allegedly wasn’t qualified or capable of doing the work.

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