Natchez Regional leaders accused of negligence

Published 12:05 am Saturday, October 3, 2015

NATCHEZ — A federal lawsuit was filed Friday against former administrators and board of trustees of the now defunct Natchez Regional Medical Center.

Attorney Brent Barriere of Fishman Haygood in New Orleans whose firm is representing the liquidation trust remaining after the hospital’s bankruptcy and subsequent sale said the lawsuit was filed in an effort to recoup millions of dollars in revenue lost due to negligence on the part of the hospital administration and board.

Prior to the filing, The Natchez Democrat obtained a draft of the lawsuit.

Email newsletter signup

The lawsuit’s plaintiff, Kenneth Lefoldt — representing the NRMC liquidation trust— is suing a number of hospital officials in the suit.

Lefoldt is the certified public accountant appointed by the federal bankruptcy court to serve as the former county hospital’s liquidation trustee.

Defendants in lawsuit are former hospital CEOs Bill Heburn and Donnie Rentfro, former CFO Charles Mock, as well as NRMC board of trustees members the Rev. Leroy White, John Serafin, Linda Godley, Lionel Stepter, Lee Martin, William Ernst and Jennifer Russ, according to the draft complaint.

The lawsuit also names the Horne Group as a defendant. The company was hired by the Adams County Board of Supervisors to “audit (the hospital’s) finances and ensure that appropriate control systems were in place to prevent the catastrophic fiscal failure that ultimately befell NRMC and doomed it to bankruptcy,” the complaint states.

Mock, Heburn, Rentfro “appear to have operated NRMC with a general disregard for their obligations and responsibilities” to the hospital, the draft complaint says.

Mock did not have the appropriate education, credentials or experience to serve as the hospital’s chief financial officer, the complaint says.

While CEO, Heburn was often absent from NRMC for most of the work week, the lawsuit alleged. As a result the hospital’s employees and officers, “including Mock, did not receive the oversight or appropriate guidance necessary for them to fulfill their duties,” the complaint states.

Following Heburn’s resignation, Rentfro was promoted to CEO. Instead of helping NRMC stabilize its finances, Rentfro caused or permitted millions of dollars of “needless expenses,” the lawsuit alleges.

The complaint points to an example of Rentfro’s oversight of the hospital’s purchase of multi-million dollar equipment the hospital could not use because it did not have the appropriate staff or that did not aid in providing care regular patients sought.

Rentfro, Heburn and Mock were so “grossly negligent” in carrying out their duties, the complaint alleges, that NRMC and its affiliates failed to bill patients for months, respond timely to federal audits and properly oversee the credentialing of its doctors, among other issues.

In medical billing, doctors and other providers must be certified with Medicaid, Medicare and private insurance companies to bill them. Because doctors did not have those certifications, Barriere said, approximately $2.4 million in revenue was lost.

Since the hospital’s change of ownership from Adams County to the privately held Community Health Systems in October, all of the doctors associated with the hospital — which is now technically a new entity — have been re-certified.

The members and former members of the hospital’s board of trustees named in the lawsuit “wholly abdicated their duties to oversee the actions of Rentfro, Heburn and Mock,” the draft complaint alleges.

Adams County Supervisor Mike Lazarus said the trustees did the best they could given the circumstances, but could have made better choices about hospital management.

“I feel really bad for them because they were being lied to in the beginning and given false information,” Lazarus said. “And I had my own questions about why they didn’t make motions to fire people, and they let it go on longer than I would have.”

Glaringly absent for the list of defendants, County Supervisors Mike Lazarus said, is Scott Phillips, Healthcare Management Partners Chief Executive Officer.

Phillips’ firm was hired to help facilitate the sale of the hospital. When bids to buy the hospital came in too low to fully cover its debts, Adams County had to borrow more than $3 million to make the sale happen.

“I’m really curious as to why Scott Phillips’ name is not on that list,” Lazarus said. “I think it should be a the very top.”

Supervisor David Carter agrees.

“(Phillips) may not have put (the hospital) in bankruptcy, but he certainly led us there,” Carter said.

The liquidation trust includes a number of creditors NRMC owes money to, including local businesses.

“I don’t think you’ll be able to right all the wrongs, but I would like to see the employees taken care of and all of our local creditors paid off, just to allow some hometown healing,” Carter said.