Hospital's contract sparks call for inquiry

McALESTER — A McAlester business owner is pushing for a multicounty grand jury investigation into allegations of financial improprieties involving McAlester Regional Health Center.

Tops on janitorial business owner Monica Ford's list of concerns was hospital Chief Executive Officer David Keith entering into a $6.9 million environmental services contract with a newly formed company without competitive bidding.

Ford said she also has concerns about a September 2011 consulting contract between the hospital and a limited liability company owned by Keith's wife that paid $ 65 an hour. Ford said hospital employees have bombarded her with complaints of improper billing practices and other financial irregularities since she began asking questions.

But Ford said it was the hospital's five- year, $ 6.9 million janitorial and linen management services contract with True Solutions Management and Consulting Co. of Shawnee that first aroused her suspicions and prompted her to launch an inquiry last April.

Ford, the owner of KleanR-Us Janitorial Service Inc. of McAlester, described the contract as “wrong” and “unacceptable.”

True Solutions owner Jason Draper countered by contending it was unclear whether the contract needed to be bid, but said he voluntarily agreed to allow the contract to be canceled once questions were raised.

“Quite frankly, I think there's still debate on whether

or not this thing even needed to go out for a public bid,” Draper said. “My attorneys told me that was never necessary because it was a service contract not a product.”

“We willingly and gracefully signed the termination of that contract, so we've done nothing wrong here,” he said. “We're just trying to make a living.”

In an Aug. 31 complaint to the McAlester Regional Health Care Authority, Ford stated that a review of documents revealed that the hospital's chief executive officer awarded the contract to True Solutions without competitive bids and without submitting it to the governing board for a vote of approval.

She also noted the contract was signed on Dec. 5, 2019, less than five months after True Solutions was formed as a company. The hospital paid True Solutions more than $34,000 before the contract was even signed, she said.

“Two professionally trained investigators could not find True Solutions even existed much less a qualified vendor until July 19, 2019,” she said in her complaint. “So, anyone with a third-grade education is going to ask how did the hospital know about True Solutions or ( whether) they were a qualified environmental services company?”

The hospital authority's board of trustees hired attorney Timila S. Rother of Oklahoma City's Crowe & Dunlevy law firm to look into the matter and see if there had been intentional wrongdoing.

“Our conclusion from the investigation is that the initial failure to bid the EVS (environmental services) contract was not caused by misconduct, ill motive, favoritism or any other impropriety,” Rother wrote in a Sept. 10 letter to Ford. “Rather it was an absence of understanding of the scope of the competitive bidding requirements under the Public Trust Act by those evaluating the EVS relationship and potential

contract, exacerbated by an absence of communication and the evolution of the contract from one that did not require a competitive bid to one that did.”

Draper, True Solutions' owner, said the McAlester hospital directly employed its own environmental services employees prior to contracting with his company, but the hospital wanted to outsource those duties.

Draper said he put together a proposal for the hospital and agreed to hire the hospital's environmental services employees and take over those duties under the five- year $ 6.9 million contract.

Draper's company was chosen after he made a presentation to several hospital executives, he said.

“So we had all employees on our payroll with that contract,” he said. “We bought all the supplies, all the hand sanitizer, all the paper towels, did all of the floor care, all of the cleaning chemicals and we also paid for the processing of all the laundry.”

Draper acknowledged that True Solutions was a new company when it was awarded the contract, but said he had done small consulting jobs previously under a company called Basement Business Consulting. He said he formed the new company because he wanted a different name.

Draper said he also had previously worked for large environmental services companies and had 17 years experience in the hospital environmental services industry.

Draper acknowledged receiving payments before the contract was signed in December, but said that was for a “small consulting service” where competency training was provided to employees.

When questions arose about whether the contract was a labor contract that should have been bid, Draper said he agreed to let the hospital cancel the contract, take back the employees and solicit bid proposals.

Draper said his company was the only one that bid the first time so hospital officials rejected the bids and bid it again.

Ford's company didn't bid either time, he noted.

Ford said she didn't bid because the hospital only provided potential bidders with a one-page solicitation form that failed to provide enough information to know what would be expected.

Ford said when she asked for more specific information, a hospital staff member responded, “let's just see how creative you all can get!”

Ford concluded that the bidding process was “nothing more than going through the motions to cover up hospital management's errors and wrongful actions.”

Draper said that after going through two bid attempts, the second of which attracted two bidders, hospital officials decided to reject the bids and keep the employees on their own payroll. Hospital officials said they rejected the bids to ensure stability of services during 2020' s uncertain economic environment.

“We actually still have a management agreement with them,” Draper said, adding that his company provides two managers who supervise the department for the hospital. The hospital now pays for supplies.

The new contract calls for True Solutions to be paid $18,951.45 a month.

Like True Solutions' earlier contract, the new management contract wasn't bid.

“The management contract was not bid because it is a contract for management services, which are not required to be bid,” said Julie Powell, the hospital's director of risk and compliance, drawing a distinction between a labor contract and a management contract.

Draper said it's a month-to-month agreement that can be terminated at any time.

“We've raised their patient satisfaction scores tremendously,” Draper said.

CEO spouse's contract

Questions also have arisen regarding a 2011 contract that called for HIM PRO LLC — a company owned by Terry Keith, the wife of hospital CEO David Keith — to be paid $65 an hour for up to 220 hours a month.

HIM PRO was hired to provide consulting services to assist the hospital in its transition to an electronic medical records system.

Powell said there was no conflict of interest because the contract was executed by the hospital's former interim CEO in September 2011, the month before David Keith was named chief executive officer.

“HIM PRO reported to

the chief financial officer and chief information officer, not David Keith,” she said. “David Keith did not participate in any decision regarding the retention of HIM PRO.”

HIM PRO was paid $62,739.95 for all services provided under the contract from 2011 to 2013, Powell said, adding that no services have been provided under the contract since then.

“HIM PRO never billed the maximum amount of hours allowed under her contract,” Powell said.

The McAlester Regional Health Care Authority has issued a public statement saying the board retains faith in Keith's leadership.

“We have complete faith in CEO David Keith and the leadership team to carry out the mission of the hospital,” the statement says.