Judge rules in favor of union that sued California hospital over private ASC funding transparency

A judge ruled in favor of a union representing California public hospital workers that is suing a county hospital authority for allegedly shielding the funding flow of a county-created, private ASC, 23ABC reported Oct. 11. 

The union alleges Kern Medical Center, the only level 2 trauma center in Kern County, has been giving money to Kern Medical Surgery Center, a privately-owned ASC. The suit says the funding flow should be more transparent, and a judge agreed in an Oct. 11 ruling. 

The suit, filed July 18 by Service Employees International Union 521, which represents the hospital employees, alleges the public has a right to know about the funding of the ASC. The Kern County Hospital Authority has, since 2018, filed the ASC under an LLC as a blended component unit of Kern Medical Center, according to court documents. 

The lawsuit argues the LLC designation means the ASC must follow accounting and financial reporting standards for state and local governments, including open meeting and public disclosure laws. The suit alleges the LLC has violated several public disclosure requirements and the hospital authority is trying to operate above public oversight.

According to the suit, the ASC was created to provide ambulatory surgeries, but 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 ruling on Tuesday is a step closer to knowing what services the ASC provides and how it is being funded, according to 23ABC

"Prior to this victory, we didn’t know what was going on. It was basically a black box," George Pfister, RN, lead clinical nurse at KMC and member of SEIU 521, told 23ABC. "With the victory [attorney] Alex [Nazarov] got us, we can now look into what's going on with these funds and make sure they are being properly used."

The union's next steps are asking Kern Medical Center for funding records so the public can see how the private ASC and Kern Medical Center are working together. 

"We have a very important mission. We want to stay focused on that," Mr. Pfister said, according to 23ABC. "Every cent that should be going to Kern Medical, should be going to Kern Medical."

Kern Medical did not immediately respond to Becker's request for comment. The hospital told 23ABC it does not comment on pending litigation.

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