A private law firm Summa Health hired this month to investigate potential conflicts of interest in contracts for its emergency rooms has given Summa a clean bill of health.
The same law firm — Porter Wright Morris & Arthur — last year represented Escallate, a North Canton medical billing company that’s owned by Summa’s new emergency physician staffing group.
Escallate was founded by Dr. Dominic Bagnoli, CEO of US Acute Care Solutions, the company now providing physicians to Summa emergency rooms; and Dr. Mark Terpylak, a Summa executive.
In a statement, Summa spokesman Michael Bernstein said: “The Board of Summa Health is fully satisfied that the counsel provided by Porter Wright Morris & Arthur was completely independent.” He went on to say that the law firm previously represented Escallate, but that representation ended more than six months before the firm was asked by Summa to review the emergency medicine contracting process.
Escallate is wholly owned by USACS, a spokesman for USACS said Tuesday. Terpylak divested from Escallate in 2015.
A lawyer who was part of the Porter Wright Morris & Arthur team that conducted the conflict of interest investigation for Summa declined to comment Tuesday about the firm’s dealings with Escallate.
The attorneys who conducted the Summa investigation were not the same as those who represented Escallate.
The investigation comes as hundreds of doctors continue to demand the resignation of Summa CEO Dr. Thomas Malone and his leadership team.
The findings aren’t convincing, said Dr. Hitesh Makkar, vice president of the Summa medical staff.
“The fact that there is a connection between Porter Wright and Doctors Terpylak and Bagnoli further upholds the very essence for the no-confidence vote against Dr. Malone and his administration,” Makkar said.
“The board cannot let this continue. There is clearly a conflict of interest and now money has been spent to make us believe that there is not,” said Makkar, who is part of a critical-care specialist group whose contract with Summa recently wasn’t renewed.
Summa’s board of directors Tuesday sent the law firm’s conclusions to the health care system’s staff, the same day the board declined to answer further questions about potential conflicts of interest submitted in writing last week by a Beacon Journal reporter.
At issue is Summa’s abrupt contract switch from Summa Emergency Associates (SEA) — which had provided emergency room physicians to Akron City for more than 30 years — to Canton-based USACS in the waning hours of 2016.
Links to new group
Two Summa executives who played some role in the discussions have ties to USACS.
Summa Chief Medical Officer Dr. Vivian von Gruenigen is married to Bagnoli, the CEO of USACS.
And Terpylak, also on Summa’s leadership team, is a longtime friend of Bagnoli, the report said. The men have had several business dealings.
Terpylak’s adult son, Andrei Terpylak, works for USACS as chief of staff, Marty Richmond, a USACS spokesman confirmed. However, Richmond said the position is a two-year position with “no direct reports or managerial duties.”
After the abrupt switch in ER staffing, a vote of no-confidence was taken in early January and signed by more than 250 Summa and independent doctors, asking for the resignation of Malone and his leadership. In a separate, online anonymous survey, doctors voted 447-24 against Malone.
Among their many complaints was Summa’s handling of negotiations with SEA and potential conflicts in the USACS deal.
Documents, interviews
Summa’s board of directors hired Porter Wright Morris & Arthur Jan. 13 to investigate whether any “impermissible” conflicts existed.
In a memo to Summa employees Tuesday, the board said the outside lawyers “reviewed thousands of documents, including all emails among leadership regarding the (Emergency Department) transition” and interviewed members of Summa’s leadership.
The law firm, the board said, concluded “there is no violation of conflict of interest law or the Summa Health policy on handing conflict issues,” the board memo told Summa staff.
The Summa board attached the lawyers’ findings, an 11-page memo dated Jan. 20, a week after the firm was hired.
According to the memo, the lawyers started by reviewing the terms of the contract with SEA that expired Dec. 31, the relevant proposals exchanged between Summa and SEA and the contract Summa ultimately entered into with USACS.
The lawyers also reviewed some of the emails of Summa executives, including Malone, von Gruenigen, Terpylak and two others, using “key word searches for relevant terms and names.”
The lawyers also interviewed Malone, von Gruenigen, Terpylak and three others.
The law firm determined the marriage of von Gruenigen to Bagnoli was disclosed to the contract negotiators, Malone and the Summa board at its Dec. 30 meeting. The board “subsequently approved the transition to USACS” and the deal was executed.
“Our investigation uncovered no fact that would suggest that Dr. von Gruenigen used her position at Summa to steer or influence the discussions or deliberations regarding the selection of an emergency medicine services provider in order to benefit USACS in any way or in any way better position USACS to become the emergency medicine services provider.”
Terpylak, while being in business with Bagnoli, has no interest in USACS, the lawyers said.
Terpylak disclosed his son’s employment with USACS to Malone once he found out USACS was a potential contractor replacing SEA. Terpylak also recused himself from any decision-making in the process after Summa solicited a proposal from USACS, the lawyers said.
“Our investigation uncovered no fact that would suggest that Dr. Terpylak’s relationship with Dr. Bagnoli played any role in the selection of USACS to provide emergency medical services to Summa,” the lawyers said.
Summa management, the lawyers concluded, acted in good faith.
Doctor not satisfied
But Dr. Jeff Wright, who leads Summa’s former ER physician group, said: “I find it interesting that they use a conflict of interest to check out a conflict of interest.”
Wright said he feels Summa is on a “smear campaign” against him and his doctors.
“Its very unfortunate,” he said. “It definitely did not need to go down this way. There’s been a lot of things hidden from both the Summa board and the public on how things transpired. “
Kathleen M. Trafford, a Porter Wright partner whose name appears first among the three lawyers who completed the Summa investigation, declined comment on her firm’s representation of Escallate or the Summa memo. A message was left with a second attorney and the third attorney referred questions to Trafford.
Amanda Garrett can be reached at 330-996-3725 or agarrett@thebeaconjournal.com. Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com.