Court to decide whether hospital firing was retaliation. (Up Front).

The administrator of a 49-bed hospital in Gardena may soon go to trial against his former employer, alleging he was fired for shedding light on various industry violations at the facility.

Ron Kupferstein, who was administrator of Community Hospital of Gardena from July 1997 to April 1998, also claims in a lawsuit he filed against the hospital that its president and chief executive, Raymond Smith, discriminated against the hiring of African American staff.

"From the day he was hired, he complained about these practices," said Michael Goldberg, a partner at Paul & Janofsky representing Kupferstein. "He never stopped complaining. He wore them down, and he was fired."

On June 24, a three-judge panel in the 2nd Appellate District ruled that Kupferstein's alleged evidence of wrongdoing raises questions that need to be resolved by a jury. A lower court had previously thrown out his case. In his suit, Kupferstein alleges he complained 20 times to Smith that physicians at the hospital were given "illegal inducements and incentives to join staff or refer patients to the hospital," according to the appellate ruling.

Kupferstein also claims the hospital allowed unlicensed aides to perform physical therapy and a pharmacy technician to distribute medication late in the afternoons without the supervision of a licensed pharmacist. Both practices are illegal under sections of California's Business and Professions codes. Also, Smith refused to hire enough black employees to "make the staff more racially diverse," the ruling says.

Both Julie Brodsky and Christine Hoeffner, attorneys at Ballard Rosenberg Golper & Savitt LLP representing Gardena Physicians Hospital Inc., the corporate name of the hospital, did not return phone calls. Smith referred calls to the Ballard firm.

Doubtful charges

Several industry experts dismissed Kupferstein's claims as unlikely.

Since 1997, only three complaints have been filed against the Community Hospital of Gardena, said Eric Stone, supervisor of Los Angeles County Department of Health Services' health facilities division.

Allegations of physician kickbacks "you hear all the time, and it's in some of the best hospitals in the United States," said Kent Badger, director of the Center for Health Services Management at the University of La Verne. The other health statute violations, he said, "are just clearly illegal. I cannot imagine anybody being encouraged by senior management to do that sort of thing."

None relate to Kupferstein's claims, and none came directly from Kupferstein, he said.

What is more unusual about Kupferstein's claims, experts say, is his role with the hospital.

"You usually don't have two people sharing senior management responsibilities," Badger said. "It produces an extremely contentious work environment."

Goldberg said his client, who was previously an administrator of Hawthorne Hospital, was brought in as a consultant in April 1997 to improve the hospital's financial health. The hospital suffered a net loss of $248,000 in 1996 on net patient revenue of $5.1 million, according to the Office of Statewide Health Planning and Development, a division of the California Health and Human Services Agency. Net patient revenue is based on payments the hospital receives, rather than charges to the patients.

According to the ruling, Kupferstein became a full-time employee in July 1997, serving in the newly created position of administrator.

In the ruling, Smith contends Kupferstein was supposed to bring additional business to the hospital through recruiting, marketing and business development. Kupferstein claims "he was also hired by defendants to manage and oversee the day-to-day operations of the hospital," the ruling says.

After repeatedly reminding Kupferstein of his responsibilities, Smith took over personnel matters in November 1997, the ruling says. He found that most of the physicians Kupferstein hired had a large percentage of Medi-Cal patients, even though the hospital was not a contracted Medi-Cal facility. Smith fired Kupferstein in April 1998, the ruling says.

Kupferstein sued in January 1999, claiming he was fired in retaliation for blowing the whistle on the alleged health industry violations and racial discrimination practices. He also sued for emotional distress, breach of oral contract and punitive damages.

Kupferstein claims he was wrongfully fired because he fulfilled his duties to improve the hospital's financial condition. In its ruling, the appellate panel ruled he has enough evidence to address that argument and reinstated his whistleblower and breach of contract claims.

By the end of 1997, the hospital had reduced its net loss to $133,000, and net patient revenue had increased slightly to $5.8 million, according to the state's health planning office. At the end of 1998, the hospital's net loss decreased again, to $107,000, while net patient revenue climbed to $7 million.

Since 1998, the hospital has continued to struggle financially. In 2001, the most recent data reported by the OSHPD, it reported a net loss of $486,000 on net patient revenue of $7.9 million.