LAS VEGAS — A federal bankruptcy judge has removed Dr. Vincent Scoccia from his role as chief executive officer at Nye Regional Medical Center in Tonopah after a motion filed by the county’s attorney accused him of grossly mismanaging the facility and continuing to pay his own interests while other doctors and organizations went unpaid.
According to paperwork filed with the United States Bankruptcy Court for the District of Nevada, Judge Laurel E. Davis signed an order on May 7 effectively terminating the current board of directors, which Nye County’s motion claimed Scoccia appointed against the board’s by-laws the week before, and removing Scoccia from all administrative responsibilities and duties at the hospital.
In his place, the court has appointed Jerry Seelig — who has until this point acted as the court-appointed patient care ombudsman throughout the parent company’s bankruptcy proceedings — as the hospital’s responsible officer.
Seelig will act as the organization’s president and administrator, having control over the hospital’s bank accounts and providing day-to-day management at Nye Regional.
The court has also appointed an independent board of directors for the hospital as well which includes Dennis Boone from Round Mountain Gold, Tonopah Town Manager James Eason and a designee of the Official Committee of Unsecured Creditors (UCC).
Prime Care Nevada, Inc., Nye Regional’s parent company, filed for chapter 11 bankruptcy in December.
Since then, multiple allegations of mismanagement and questionable fund transfers to Scoccia’s other business interests, including Owie Boo-Boo and Tuna Park LTD, have arisen in motions and documents filed with the court.
According to one court document, Scoccia had been accused of issuing payments totaling $225,000 to his other business entities in the 90 days preceding the bankruptcy filing and a total of $570,000 in the year leading up to it.
In Seelig’s first report to the court as a patient care ombudsman, he noted there were reports that Prime Care Nevada, Inc. had failed to meet standards set by federal and state regulators that could result in the hospital losing its licensing. He also noted that there was a portion of the community that has lost faith in Nye Regional’s ability to treat their families and would elect instead to drive to Bishop, Calif. or another area for primary, emergency or acute care.
The motion to have Scoccia removed from Nye Regional’s administrative board was filed earlier this month by the county’s attorney Talitha Gray Kozlowski after she claimed he had violated previous terms of the bankruptcy proceedings in which they had agreed Prime Care Nevada, Inc. would no longer tender any payments to Scoccia’s other business entities and that all contracts and service providers would be paid directly.
The attorney claimed that since that agreement had been made Scoccia had taken unauthorized payments from the hospital, appointed a new board of directors and failed to correct safety deficiencies cited in a July 2013 report from the Center for Medicare and Medicaid in order for the hospital to maintain its current licensing.
“The county has learned that at the end of April, Dr. Scoccia, in what is undeniably a breach of his fiduciary duties and possibly criminally actionable, caused Debtor (Prime Care Nevada, Inc.) to tender a check for more than $76,000 to himself, which amount is more than half of Debtor’s available cash,” her motion states.
“As a result of over $76,000 being paid to Dr. Scoccia, Dr. Landsman has not been paid for several weeks and at least three of the physician assistants (the “PAs”) have not been paid. It remains unclear what other medical professionals have not been paid in April. Additionally, other necessary medical services and goods have not been paid for.”
The county’s attorney further accused Scoccia of asking his ex-wife to assist in completing the hospital’s Medicare Cost Report, rather than engaging outside agency Nevada Rural Hospital Partners as had been agreed upon.
“Because of Dr. Scoccia’s unilateral actions without the knowledge of Debtor’s council, Debtor is facing the loss of its medical service providers due to non-payment post-petition — clearly a compromise to patient care — the loss of its Medicare provider number due to the imminent failure to timely complete its Medicare Cost Report, and the loss of its Medicare provider number and its Nevada license due to the imminent failure to timely complete the corrections to Life Safety and Health Deficiencies required by both CMS and the State of Nevada,” the motion states.
“Of greatest concern is that Dr. Scoccia is presently wielding his power for his sole benefit to the detriment of patients. While life and death discussions in bankruptcy cases are usually hyperbole, here it is not.”
In response to the county’s motion, Prime Care Nevada, Inc.’s attorney David Colvin filed a motion of his own claiming that his client had taken steps to ensure the best interests of the hospital were protected.
While Colvin wrote that Prime Care Nevada, Inc. did not object to some of the judicial relief the county was asking for in their motion, including the removal of Scoccia from the hospital’s administrative board, they would ask that they at least be allowed to appoint one person to the new board of directors in order to protect the company’s interests.
“In its motion the County requests that the Debtor’s three member board be amended to include Dennis Boone, an employee of Round Mountain Gold, James Eason, the Tonopah Town Manager, and a designee of the UCC. This proposition is biased, prejudicial, and wholly unfair to Debtor because the County and related creditors would have exclusive dominion and control of all operations and decision making with respect to the Debtor,” Colvin’s response states. “If the County’s motion is granted, it would literally be permitted to hand select a Responsible Office and self-interested board members who would make determinations throughout the course of this action.”
The court ultimately sided with the county, appointing the board applicants recommended in the county’s motion.
Now that a new board has been appointed and Seelig made the responsible officer, Seelig said they will begin work to stabilize current operations at the facility. Once that has been accomplished they will then begin work on a restructuring plan to create a more sustainable operation for Nye Regional going forward.
“As soon as we stabilize the place, get a budget in place and work with the parties to ensure we have the financial resources to go forward, we will start the process of building a plan to emerge from bankruptcy,” Seelig said.
“We will make a determination of what the financial and administrative organization that emerges out of this bankruptcy will look like. It could be an outside integrated health care provider from Vegas or San Francisco or Reno or somewhere that comes in and partners with us, or owns or operates us in some way, or it could be a group of individuals together with a plan to effectively operate the hospital, it could be a management services company working to keep it as a not-for-profit, or it could be a combination of all of the above.”
The most important thing, Eason added, was that the hospital remain open to provide quality care to the people of Tonopah and their neighbors in the surrounding areas.
Since his appointment, Seelig said Nye Regional has already begun to make some improvements to the hospital including getting rid of the outside company that used to handle their medical billing and collections, and taking that operation in-house to be done by their own staff.
As they continue to move forward in this process, Seelig said he and the board will be seeking input from the community to build a stronger hospital the people can be confident will serve their needs.
Scoccia has since reportedly submitted his resignation letter to the hospital, which Seelig said is effective May 31. He will continue to see patients through that time.
An attempt to reach counsel for Prime Care Nevada, Inc. for comment was unsuccessful before press time Thursday.