D.A. PROBES ISSUE ON HOSPITAL BOARD.
LANCASTER -- The Los Angeles County District Attorney's Office is investigating whether four board members have had a conflict of interest in a contract between Antelope Valley Hospital and a local medical group.
Until recently, four of the five hospital directors had financial ties to High Desert Medical Group. Rival candidates raised the issue in past hospital board elections.
"We did receive a complaint, and we are reviewing it," said Deputy District Attorney David Demerjian of the Public Integrity Division. "The complaint is there is a conflict of interest by one or more of the board members. It's in the initial review stage at this point."
Demerjian said the complaint was received in February.
Board members Dr. Abdallah Farrukh, Dr. John Manning, nurse-practitioner Berna Mayer and Dr. Don Parazo have or had financial relationships with High Desert.
Farrukh was elected to the board in 2000, Parazo in 2002, and Manning and Meyer in 2004. They have in the past denied any conflict of interest.
Mayer said she never did, or would put pressure on hospital administrators to secure a better contract for High Desert.
"They are free to look into anything," Mayer said. "As far as I know, nothing has been changed with any of the contracts. If anything has been changed, it hasn't been changed by the board.
The board member who has had no ties to High Desert, June Snow, welcomed the inquiry. In the 2006 election, Snow and two other candidates raised questions about potential conflicts of interest and whether High Desert Medical Group was wielding undue influence.
"I really don't know if there's trouble or not trouble, but the potential is there, and I think it's good the D.A. looks into it, and hopefully they will find nothing wrong," Snow said.
Manning works part time and Parazo full time at High Desert. Mayer was a nurse-practitioner there but resigned at the end of April because she said the hospital could not negotiate a new contract with High Desert with a board majority having ties to the medical group.
Farrukh was not employed by High Desert but had a contract with the group to provide services. That contract has ended, hospital officials said.
A three-year contract between the hospital and High Desert expired at the end of April.
"(Hospital CEO Les Wong) said he could not renegotiate a new contract as long as four of us were on the board. So I had two choices. I could resign from the board or resign from High Desert Medical Group, and I just felt as a nurse-practitioner I could seek employment elsewhere," Mayer said. "There's three of us now with no ties, so a new contract could be negotiated."
Hospital attorney Craig Cannizzo said High Desert's contract with the hospital goes back about 11 years, and the most recent amendment was approved May 1, 2004.
Cannizzo said the hospital was not able to renew or amend the contract given the makeup of the board before Mayer and Farrukh severed their ties with High Desert.
"The law allows a contract to continue if new board members come on that have a direct or indirect financial interest, but it does not allow the contract to be amended, renewed or modified while those officers continue to have financial relations with the contracting party," Cannizzo said.
The task of negotiating contracts with medical groups and insurance companies is handled by Wong and not brought before the board.
"We are relieved that we no longer have the obstacles that we had previously. It wasn't really something that the hospital could dictate," Cannizzo said.
When a new contract is negotiated, it would have to come before the board for consideration, and Manning and Parazo would have to recuse themselves, Cannizzo said.
Even with no current direct contract between High Desert and the hospital, High Desert's 66,000 members can still be treated at the hospital but at possibly higher group rates, officials said.