An objection letter from another health services company has thrown a wrinkle into an El Camino Hospital affiliate’s plan to purchase five South Bay clinics owned by the recently bankrupt Verity Medical Foundation.
In a seven-page document filed March 12, attorneys representing Cigna Healthcare claim that Verity, Silicon Valley Medical Development (SVMD) and San Jose Medical Group failed to provide a timely notice of severance to the clinics, as required by law and Cigna’s outstanding contracts.
Potential buyer SVMD is a wholly owned subsidiary of El Camino Hospital. The hospital’s board of directors last month signed off on SVMD’s request to purchase the clinics for $1.27 million.
One of the contracts assigned to Verity by San Jose Medical Group in December 2015 indicates that agreements can only be terminated with a minimum of 90 days’ notice, and Cigna’s attorneys allege that did not happen.
“Cigna objects to the Sale Motion because (it) does not provide for adequate notice of the proposed disposition of the Cigna Provider … putting the Clinics’ patients, communities and healthcare providers at risk,” lawyers wrote in their objection letter.
Cigna and its representation described the termination of the provider agreements as “de facto,” noting that the move will have a “significant and immediate impact” on patients at any of the clinics awaiting or recovering from treatment with Cigna health-care coverage and patients with that coverage who have scheduled or contemplated scheduling treatments, among other affected parties in the community.
According to SVMD President Bruce Harrison, the bankruptcy court was scheduled to review his company’s offer Tuesday in Los Angeles; a decision was expected later that day. Should SVMD’s offer be accepted by the court, Harrison said, the expected close date is April 1, 2020.
Employees, union object
The day Cigna Healthcare’s legal team filed the objection, employees from Gilroy Primary Care, Morgan Hill Medical Associates and Good Samaritan, McKee and Willow Glen clinics marched at Good Samaritan to express their anger over the El Camino Hospital board’s Feb. 12 approval of SVMD’s request to purchase the clinics, their furnishings and medical equipment. Despite pleas from workers – ranging from medical assistants to clerical staff – to address existing employment contracts, the possibility of staff being retained was not discussed.
“It was a small turnout,” SEIU-United Healthcare Workers West media relations specialist Sean Wherley said of the protest. “Workers are still determined to retain their jobs.”
SEIU-UHW, the union that represents clinic employees, estimates that approximately 180 of its members face job cuts if SVMD hires outside employees.
“This (objection letter) provides more evidence that the parties to this sale have not acted to adequately protect patients and workers,” Wherley said of Cigna Healthcare’s objection to the sale.
Harrison said application reviews and interviews are being conducted to identify nonphysician personnel.
“SVMD has made it a priority to review applications and interview candidates who service patients at the clinics currently,” he said. “Employment decisions will be determined based upon qualifications and offers made contingent on bankruptcy court proceedings and full execution of the asset purchase agreements.”
More than a dozen workers spoke at the El Camino Hospital Board of Directors meeting March 13 to express their worries over their uncertain job status. The employees carried letters of support from four U.S. Congress members, two members of the Santa Clara County Board of Supervisors and three members of the San Jose City Council requesting that they “consider them and be able to answer some questions that (medical staff) all have to give some security.”
Above the need to pay bills, those who work for Verity Health wonder what will happen to their patients and what quality of care will be provided to them.
“I think it’s highly important to highlight the fact we have established a certain connection with our patients,” said a Willow Glen cardiology department employee identified only as Angela. “A lot of our patients come in anxious to receive test results for (things like) an abnormal EKG or a stress test, and just seeing us provides them with a comfort. … (We’d like you to) give us more clarification on what direction you would like to take our patients and to take us on that journey with them.”
John Zoglin, longtime board director, thanked the workers for attending the meeting and sharing their stories and noted that the board received several letters supporting them. He then announced the board would move on to its next item with no further discussion.
