California hospital authority sued, accused of trying to shield ASC from oversight

A union representing California public hospital workers is suing a county hospital authority, accusing it of prioritizing the needs of a county-created ASC above those of the public hospital and county residents and violating the law in the process, according to a lawsuit filed July 18. 

Since 2018, Kern County Hospital Authority has filed the ASC under an LLC as a blended component unit of Kern Medical Center, according to court documents The lawsuit, filed by SEIU 521, which represents the hospital's employees, argues the LLC designation means the ASC must follow "accounting and financial reporting standards for U.S. state and local governments," including open meeting and public disclosure laws.Yet the LLC has violated several public disclosure laws, according to the suit.  

Although the ASC was created to provide ambulatory surgeries, it's also providing "boutique spa services and cosmetic surgeries" to residents outside of the county "at the expense of investments that could improve the quality of care provided to indigent residents," the lawsuit charges.

"In Kern Medical’s surgical department, we don’t always have the equipment we rely on to do our jobs," Robin Heber, an operating room surgical technologist at Kern Medical and a union member, told 23ABC. "There have been multiple instances when our equipment isn’t available because it was sent to the Kern Medical Surgery facilities."

In violating public disclosure laws, the hospital authority is trying to operate above public oversight, the union alleges.

The hospital receives public funding to provide healthcare services to low-income patients, the suit said. After incurring heavy financial losses, the state authorized an authority to control the hospital in 2016, which allowed the authority to explore other delivery models, such as outpatient care, to "help ensure its viability and its ability to provide ongoing material benefit to Kern County residents."

The county hospital authority maintains the ASC is a "non-public entity," so it does not have to abide by disclosure policies, according to the report.

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