Accountability is the only way Fresno’s Community Health gets out of its mess | Opinion
AI-generated summary reviewed by our newsroom.
- Community Medical Centers paid $31M to settle federal kickback allegations.
- Executives used luxury perks to attract doctors, violating federal laws.
- Fresno Bee opinion writer calls for transparency, public oversight of top leadership.
The second major scandal at Community Medical Centers in recent years brings to mind words no organization would ever want.
Unbelievable. Unfathomable. Arrogance.
And, frankly, disgusting.
The Bee’s coverage of Community’s kickback scheme reveals how key executives in the C-suite enticed physicians to join their network with the lure of a wine-and-cigars club. There were also expensive trips to Europe and even forays to strip clubs.
Community Medical settled a lawsuit over its scheming to the tune of $31 million.
Let that sink in for a moment: 31 MILLION.
This is unacceptable because Community is critically important to Fresno and the San Joaquin Valley. The hospital in downtown Fresno, plus the Clovis Community Medical Center, are vital parts of the local health-care network. The parent company also owns the Fresno Heart and Surgical Center, two cancer centers, an imaging center and other services.
As detailed by Bee reporters Melissa Montalvo and Robert Rodriguez, Community began losing its bearings years ago.
Kickback scheme explained
In 2009, the federal government required Community to transition to electronic health records. The next year Community helped form a company called Physician Network Advantage, Inc. It then began recruiting doctors to use Community’s electronic records system.
“As early as 2011, CMC and PNA started giving kickbacks to Fresno-area physicians in the form of cash, expensive wine, strip clubs, trips with private planes, and free or heavily discounted access” to the records system, Montalvo and Rodriguez report from the complaint.
A special club was set up to entertain doctors and company leaders. “A select few executives and physicians had access to the office-turned-lounge near First Street and Alluvial Avenue, known as ‘HQ2,’ “ the reporters state from the whistleblower lawsuit. The lounge became a main recruiting tool for the company.
A storage room at HQ2 held wines valued between $750,000 to $1.2 million, the lawsuit said. A cigar lounge with a smoke-ventilation system was featured. Never mind the irony of doctors enjoying tobacco and alcohol in a lounge set up by a health-care company.
Expensive trips were also in the offing. Former Community Chief Executive Officer Craig Castro took his family to Paris. Cost: $63,000. Expensive excursions were also given to an accountant with no direct business tie to Community.
The lawsuit also alleges that certain family members of Community executives got jobs within the company. In another instance, a doctor who worked at PNA suffered a medical condition that kept him from being an on-call surgeon. PNA then hired the doctor and paid him $185,000, even though he did not do any “meaningful” work.
Nepotism. Strip clubs. Expensive wines and liquors. Travel costs. Paid for no work. It was all exposed by the former controller for PNA, who blew the whistle.
The settlement means there will be no trial over the allegations in the complaint. A senior vice president for Community said the complaint had some errors in it, and she pushed off responsibility to previous leaders.
“The whistleblower lawsuit makes claims regarding personal choices that don’t reflect our high standards as a non-profit health system, or the values of our current leadership team and board. And a number of elements in the 2019 lawsuit reflect either inaccurate or incomplete information,” said Michelle Von Tersch, senior vice president and chief of staff.
Still, $31 million speaks volumes.
This lawsuit and revelations come after a 2023 investigation by The Bee over the use of millions in government money to reimburse Community for its care of poor and uninsured patients at the downtown hospital. Staff writer Yesenia Amaro found that the funding was instead used to expand the Clovis hospital, even when the downtown facility faced a deadline for strengthening against earthquakes.
Accountability needed
As a result of the whistleblower complaint, the federal government alleged Community violated the False Claims Act, the Stark Law and the Anti-Kickback Statute. Claims submitted knowingly and in violation of the Anti-Kickback Statute constitute a “false or fraudulent” claim under the False Claims Act, according to the lawsuit. The Stark Law prohibits a physician or medical provider from referring Medicare patients for certain services to an entity with which a physician’s immediate family has a financial relationship.
PNA gave The Bee a statement that said it cooperated with federal attorneys and that the settlement “brings this matter to a conclusion without any determination or admission of legal liability for PNA.”
The U.S. Attorney’s Office reserves the right to bring more legal action against other defendants if further investigations show more wrongdoing.
Following the 2023 Bee investigation into the millions spent at the Clovis hospital, The Bee Editorial Board urged Community to become more transparent in its decision-making. That advice went unheeded.
Now, the Community board can pay the fine and simply move on. But that would be wrong.
The public trusts Community’s doctors and nurses. But the top executives overseeing the operation also need to be trusted. One way would be to put a member of the public on the governing board as a watchdog. That person would be independent and post a quarterly report on decisions made by the board on Community’s website for public review.
A television ad campaign over the past few years markets the idea that Community is here for us at all times — it is an integral part of the “community.”
But the contrast of doctors and nurses working carefully in operating rooms vs. well-paid executives galavanting in strip clubs is jarring. That’s not the hometown hospital that Fresnans expect, or deserve.
The only reaction Community’s leaders should have from the settlement is contrition and a promise for real accountability. But, sadly, I doubt that will happen.
This story was originally published May 21, 2025 at 12:57 PM.
