Alliance attorneys scuffle with Hospital Commission


Committees of one, multiple CEO employment interviews – one with each commissioner – third-party employee surveys, and instructing attorneys to negotiate possible litigation – are ways in which Eureka Springs Hospital commissioners avoid holding public meetings, sharing hospital information with the public, and dealing directly with their organizational woes due to decisions they made on behalf of the city’s hospital.

Monday night, Nov. 16, the untelevised hospital commissioners were concerned with sheltering information from the public even after admitting that they believe they employ more city employees than the city administration.

Chair John House admitted the number of hospital staff complaints has risen since the termination of Alliance, but he believes “the dissatisfaction is from fear.” 

Mayor Butch Berry and the ES Independent have both received letters from dissatisfied hospital staff attempting to anonymously whistleblow on operations of the hospital since the termination of Alliance.

Berry said that since his letter was unsigned he does not take it seriously. House, however, said that he is looking into these concerns from employees. House recommended the commission hire a third-party contractor to conduct an internal employee staff satisfaction survey and assigned commissioner Jean Reed to research survey options.   

Commissioner Michael Merry is the Marketing Committee, and he said he wants to turn around the public opinion of the hospital by sending out mailers focusing on the hospital’s new lab equipment.

Merry also brought up the idea of gifting the hospital employees a turkey or cash bonus during the holiday season, but said it was not advisable by city administration.

Commissioner Jean Reed heads her committee of one, Operations, and said she wants to prepare for administering Covid-19 vaccines. House said not to get in any hurry as a rural hospital is not going to be the first place vaccines are made readily available. 

Finance, a committee consisting of commissioner Kent Turner, said that there should be an itemized operational budget so expense requests can be avoided at commission meetings and handled by the CEO. 

However, there is no CEO, and the interim-CEO, Angie Shaw was present, but did not provide the commission or public with an operational or financial report on activity of the hospital since the termination of Alliance Management Group. 

Alliance was brought up during commissioner Tyson Burden’s committee of one, Compliance and Contracts, report. Burden indicated he discovered possible breaches of contract with Alliance, describing them only as the “Chris Bell situation,” “the 855B thing, and then there’s Ambetter.” 

House instructed Burden to share his findings with him or their attorney.

These breadcrumb remarks indicate the commission’s decision to terminate was actually for cause, as opposed to the commissioners’ verbal termination of the Alliance which was said to be without cause.

After the meeting, Burden shared the “Chris Bell” situation has to do with medical equipment that Dr. Chris Bell used for clinical services which may need to be returned to him, “but he won’t return my calls.”   

Commissioner Barbara Dicks expressed her desire to be on the Interview committee, but House discouraged her and said this committee was made up of Reed, Turner, and Burden who would be designing the interview process for selection of the advertised position of CEO.

House said Mayoral Assistant Kim Stryker is channeling résumés to commissioners and the Interview Committee would be meeting at a workshop to determine the best way to select a CEO without holding a public meeting. Turner said he was concerned with the protection of the hospital’s privacy and the applicant’s privacy and recommended that commissioners speak to applicants individually.

Alliance brings out the attorneys

Discussion then went to the Alliance contract termination. House said the commission received a letter from Alliance’s attorney and recommended a motion authorizing the commission’s attorney to negotiate a resolution to be approved at a later date by the commission.

Turner made the motion and it was unanimously approved.

What the commission did not share with the public was content of the letter, but the ES Independent was provided with a copy by Alliance.

The six-page letter, written by Jones Gotcher and Bogan Attorneys and Counselors of Tulsa, details the failures of the Hospital Commission including the inappropriate purported termination, contractual violations, and defamation and tortious interference by “certain Commission members.” 

The document details how commissioners Michael Merry and Kent Turner verbally terminated the managers on September 23, 2020 without reason and without written notice as required by contract. 

The document also describes the termination was not for cause, which is consistent with the fact that the commission never provided Alliance with a written notice of default, nor afforded them with 30 days to cure such default as stated in their contract.

After a request from Alliance, commissioners sent a Notice of Termination letter dated October 13, 2020 which did not abide by the termination agreement—as the termination was not mutual, the commission did not provide 180 days prior written notice and did not provide Alliance the opportunity to cure any default.

After the purported termination without cause in September, commissioners told the public that there were reasons they decided to terminate. But since the commission attempted to terminate without cause, the document states that the commission “cannot now invoke the termination for cause provisions.”

Even after the commission received this document, House told Burden in the Monday night meeting to report possible contractual breaches by Alliance.

The letter from Alliance’s legal counsel went on to document personal attacks by certain commissioners including defamation of Alliance managers’ reputation and standing with hospital staff, implementation of employee surveys given to staff to find “dirt” on Alliance managers, spreading false claims that Alliance had a “hit list” of employees who were to be terminated, spreading false claims without proof that Alliance engaged in sexual harassment, spreading claims that Alliance created a hostile work environment, falsely claiming Alliance committed fraud, and openly called Alliance the “devils.” The document says that these “false and scurrilous statements” constitute slander.

The letter addresses the equipment, C-arms and scopes, that Alliance obtained for the use of the hospital, free of charge, in order to implement clinical services at the hospital. This is the same equipment Burden referred to in his Alliance contractual breach investigation which he dubbed the “Chris Bell situation.” 

The letter states that there was nothing inappropriate about the arrangement and that the only party who benefited from it was the hospital. The equipment arrangement was clearly spelled out in a letter to Dr. House dated Sept. 20, 2020.

The letter addresses the hospital’s malpractice insurance in which the Alliance contract clearly states that Alliance was not the party responsible to manage insurance issues—instead maintaining appropriate insurance was the obligation of the commission.

The letter says that veiled threats from commissioners that will belatedly pursue a termination with cause if Alliance does not accept the commission’s proposed payoff is just further violations of Alliance’s contractual rights.     

Even after specifically outlining serious infractions made by the commission, the letter states that Alliance’s intent is to reach an amicable resolution, including returning to the hospital to perform management functions as originally contracted.

The document states that the Alliance managers believe that despite the way they have been treated by the commission, Eureka Springs Hospital is a great facility with tremendous personnel who truly care about the patients and the community.

Alliance managers said they believe that if they had been allowed to perform their duties without interference, the hospital would have continued on its upward trend. 

After specifically listing 21 significant improvements that Alliance brought to the hospital in six months, including transitioning the hospital from leasor to owner and steadily increasing revenue amid a worldwide pandemic, the letter states that Alliance is willing, ready and able to resume its duties and obligations as originally agreed. 

In a statement to the public on October 19, House recanted his support of the commission’s decision to terminate Alliance and said that he originally supported it, “But I think we could have done just as well by working with them [Alliance] and trying to correct some of those things…”

If the commission chooses not to accept the olive branch extended by Alliance, the alternative could cost a minimum of $200,000 in fees owed to Alliance. 

The current Hospital Commission bank balance is $1.647 million.

The next regular meeting is scheduled for Monday, Dec. 21, at 6 p.m. at Main Stage, 67 N. Main.