By Susan Levine
Washington Post Staff Writer
Monday, June 25, 2007; B01
The chairman of the company that owns the foundering Greater Southeast Community Hospital says D.C. Council member David A. Catania has threatened to "destroy" him and his company if he doesn't sell the facility immediately.
In an interview, Paul Tuft of Envision Hospital Corp. alleged that the council's Health Committee chairman gave him a laundry list of demands during a series of recent meetings. At one point, according to Tuft, Catania said that he would have city and federal investigators pursue charges against Envision and that he would use family connections in Missouri to seek regulatory action against the company's two hospitals there.
Catania (I-At Large) denies most of Tuft's account, saying he made no threats against Envision and never issued ultimatums on when, to whom and at what price the 110-bed hospital should be sold. He, in turn, accused the company of fraudulently billing Medicaid and said he was fed up with its management of the deteriorating hospital.
Catania said his frustration led him to take a hard line with Tuft. "I'm not apologizing for pushing him to sell this hospital as quickly as he can," he said. "His tenure in this city has been marked by broken promises and poor performance."
Regardless of the exact conversation at the three meetings, which took place from mid-May to early June, the underlying issues highlight Greater Southeast's tenuous future and how few clear solutions exist for its problems.
The hospital's Arizona-based parent company put it on the market last summer after the council agreed that the District would provide no further financial help unless there was a change in ownership. A Prince George's County businessman who submitted a $57 million bid in the fall has made little apparent progress in closing the deal. To date, Carl Jones has not publicly disclosed his financial backing, applied for a required certificate of need from the city or announced a health care operator to run the facility.
Catania wants Tuft to terminate that contract and find another buyer.
Jones did not return repeated calls last week, and his attorney would not comment.
Since spring, Catania has been openly skeptical, even disdainful, of the abilities and intentions of Tuft and Jones. As conditions at the hospital have spiraled downward -- starting in January, when doctors raised concerns that the hospital's ability "to provide basic patient care" was eroding -- Catania has pressed the Health Department to act. During the past six weeks, regulators have conducted repeated inspections and cited staff shortages, broken machinery and inadequate supplies.
"While the clock is ticking [on the sale], the hospital is deteriorating further," Catania said Friday. He will hold another hearing today on Greater Southeast, a once solid and respected institution that is the city's only hospital east of the Anacostia River. Envision, formerly known as Doctors Community Healthcare Corp., acquired it out of bankruptcy in 1999.
Catania acknowledges that he told Tuft that Envision should end its relationship with Jones. He said he suggested that it begin negotiating with Specialty Hospitals of America, a New England company that owns two D.C. facilities. (Specialty purchased the former Hadley Memorial Hospital from Envision last year, and its chairman has proposed leading a coalition of local health care organizations to take over Greater Southeast.)
"I told [Tuft] I didn't care who he sold it to but that he needed to find a mission-driven entity to run that hospital," Catania said.
According to both men, their mid-May meeting was testy, at best.
Tuft said Catania made numerous demands, including that Envision enter into negotiations with Specialty and sell "at any price." Tuft said he was ordered to e-mail a copy of the purchase agreement with Jones by the close of business that day or the council member would move to have Greater Southeast shut down the next morning. "I'm going to go nuclear on you," he maintained Catania told him.
Catania dismissed those contentions as "ridiculous."
But the two agree that Catania informed Tuft he had evidence that Envision committed Medicaid or Medicare fraud at Greater Southeast and Hadley and said he would ask city and federal officials to investigate. A week later in a public hearing, Catania offered examples of pharmacy and laboratory charges that he said appeared grossly excessive.
Each man makes serious accusations about the other's behavior. Catania said Tuft seemed to come "perilously close" to offering him a bribe if he backed off the deal with Jones. Tuft said Catania implied he would drop his questions about fraud if Tuft sold to Specialty.
Their most recent, brief encounter came June 1. Tuft said Catania warned that he could trigger state inquiries into Envision's Missouri hospitals. "I felt like I had been blackmailed and extorted," said Tuft, who went directly to his attorney's office and dictated an account of the conversation. Neither he nor the attorney would say whether any of the discussions with Catania were taped.
Catania, who would not comment about his connections to Missouri officials, noted that two staff members were present each time he spoke to Tuft.
Greater Southeast faces at least two imminent deadlines. Administrators have until tomorrow to revise a plan to correct deficiencies there; the city rejected elements in an earlier plan as insufficient in detail or timelines. Chief Executive Cyril Allen said the necessary changes would be completed by today.
Also, the hospital must submit an annual performance review to a national organization; its failure to do so this month triggered a drop in its accreditation rating.
Tuft says Envision will provide sustained funding to Greater Southeast for the duration. According to him and city officials, a recent commitment of $500,000 weekly will go to repair equipment, hire more employees and invest in the hospital's needs. Financial numbers provided by Tuft show that the hospital lost nearly $7 million in less than six months this year, on top of more than $33 million since 2004.
During last week's interview, the 58-year-old lawyer admitted that he has such a negative reputation locally that his involvement in health care no longer serves any purpose. "Radioactive," he called himself.
"It would be much better for health care [in the District] if I weren't in this equation," he said.