LMH Health pauses controversial decision related to emergency room doctors

photo by: Ashley Golledge/Journal-World File Photo

The emergency entrance to Lawrence Memorial Hospital is shown in this file photo from Jan. 26, 2018.

Updated at 7:47 p.m. Friday

LMH Health has pressed “pause” on a controversial plan it announced earlier this week to replace the local physicians group that oversees the hospital’s emergency department with a large national firm.

The hospital’s executive team announced Friday morning that it wanted to pause the process after large numbers of area residents started speaking out about the preliminary decision to hire Envision Physician Services, a hedge fund-owned company that has had some of its practices questioned on the national level. By Friday evening, the hospital’s board of trustees had called a special meeting where it asked members of the public — nearly 300 joined the meeting via Zoom — to give them a second chance to address the issue.

“What I hope you can see is that everyone involved wants to do this right,” board chair Cindy Yulich said. “If we can be given a little bit of grace here, we can get this right. We all want what is best, and I think we can get there.”

New questions about whether a significant number of the existing emergency room doctors will agree — or be allowed — to work for Envision are partly responsible for LMH’s decision to slow the process.

LMH President and CEO Russ Johnson said Friday that hospital leaders were receiving a large number of public comments that the current crop of emergency room doctors — plus a group of hospitalist physicians also covered by the pending deal — were losing their jobs.

“This is not about getting rid of physicians,” said Johnson, who has praised the quality of care the doctors provide and has publicly stated a desire to see them hired by the new management company.

Whether they will be, though, is unclear.

Johnson acknowledged Friday that it currently is unknown whether contractual issues can be resolved that will allow the doctors out of their current employment contracts so they can work for Envision, if they so choose.

That’s because those doctors — 12 on the emergency medical side and about 14 on the hospitalist side — have contracts with their current employer, Lawrence Emergency Medicine Associates, which has provided the physician staffing for the LMH emergency department for more than 25 years. Those contracts put “restrictive covenants” on the ability of those doctors to work for any new firm that takes over the management contract of the ER department, said Scott Robinson, a Lawrence physician who founded LEMA and serves as its president.

Robinson said he and his business partners haven’t decided whether to release doctors from those restrictions, which he said are common in the industry.

“If being an obstructionist means I’m trying to protect my physicians from this group, then call me an obstructionist,” Robinson said. “Or maybe I’m just trying to protect my hospital and community from what I know are bad medical practices.”

On Wednesday, LMH said it had reached a preliminary deal with Envision Physician Services to begin employing doctors for LMH’s emergency room on Nov. 1 and for its hospitalist staff — a group of doctors who care for patients admitted for inpatient care — on Oct. 1.

Envision provides emergency room services for hospitals across the country, including St. Luke’s and Overland Park Regional Medical Center, among others, in Kansas City. The company has been in the news recently for everything from a contemplated bankruptcy filing to its CEO abruptly resigning after two congressional committees began looking into the billing practices of Envision.

Johnson said LMH would have a contract in place that protected the hospital and its patients from improper billing practices, and he complimented the company for the amount of expertise it could bring to managing the emergency department.

A big factor, though, was that the proposal from Envision potentially will save the hospital about $5 million in subsidy payments over three years compared with what LMH would owe LEMA under its proposal.

Johnson said he understood that many members of the public do not like the idea of ending a contract with a local company and giving it to a large national company. Johnson, though, said he went into the negotiations willing to keep the contract with LEMA, even if it came in at a price a bit above the larger companies vying for the contract.

“Our sense, and people can disagree with this, is that a $5 million difference over three years is not competitive,” Johnson said on Friday, prior to the board meeting. “But everybody has kind of pushed the pause button here. If LEMA can be a competitive management company, we are interested in that.”

When asked whether that meant LMH would consider a new proposal from LEMA, Johnson stopped short of saying he would consider a new one but said LEMA’s leadership should reach out to discuss that possibility.

By the end of Friday’s board meeting, though, both Johnson and some board members were making statements indicating they would enter serious discussions with LEMA again.

Hospital trustee Tom Sloan cautioned that both sides would need to compromise, but that he thought many board members wanted to reach an agreement that would lead to LEMA continuing to provide its services to the hospital.

“This is more than a dollar and cents issue,” Sloan said. “This is a fundamental issue in terms of the hospital’s future.”

But money likely still will be a factor. LMH posted a nearly $16 million operating loss in 2019, and has posted losses during the pandemic as well. Robinson, prior to the meeting, said he was uncertain how much LEMA could further reduce its costs. Instead, he wants the hospital to look at how Envision intends to pay for what he has called a “low-ball” offer.

He believes the group either will ask for more money after discovering new information about the hospital’s operations or else will staff the emergency room and the hospitalist program with fewer board-certified doctors and more advanced practice providers, such as physician assistants and nurse practitioners.

But Johnson has contended that the price differences are reflective of the market. LMH had gotten into a routine of simply extending its contract with LEMA since it began in 1994, rather than periodically opening it for competition from other providers. Johnson believes that when LMH put out a request for proposals in March, it was the first time the ER contract had been up for competition in more than 25 years.

Johnson warned hospital board members on Wednesday that the issue would be a difficult one. Since Wednesday, hospital leaders have heard from large numbers of people, including some professionals in the local medical community and some members of the general public. An online petition calling for the firing of Johnson has garnered more than 1,500 signatures. Board members at Friday’s meeting, though, expressed strong support for Johnson and his leadership.

“Everybody’s email and phone is blowing up,” Johnson said. “I just want to make sure they all have the information they need.”

Robinson said he was gratified by the outpouring of concern from the public.

“It says a lot about the community,” Robinson said. “It values its hospital and its emergency department.”

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