NEWPORT NEWS — Riverside Regional Medical Center hospital administrator Dr. Patrick Parcells touted the new
management company he had hired as having 25 years of experience with hospitals similar in size to Riverside.
But Soma Health Partners had actually been in business for less than three months, and Riverside was its first client.
How did that happen?
Parcells said he corresponded with Compass Healthcare Group employees and called seven references they provided. Parcells said the references he talked to either worked with Compass or formerly worked with Compass. A letter posted on the Riverside Medical Group website, which was later removed, said the references included multiple facilities comparable to Riverside's size and scope or larger. Riverside has refused to provide a list of those references.
Then, at the contract stage, Parcells was asked to sign with Soma Health Partners, described as a division of Compass that handled
services. Soma's website, which is now offline, boasted 25 years of experience.
Riverside signed the contract on March 24.
Later, an attorney for Compass told the Daily Press that "Soma is not affiliated in any way, shape or form with (Compass) and they never have been."
Public records and interviews show that Soma was started by Michael Candelario, the son of Compass CEO Alexander Candelario. It didn't exist as a registered company until Feb. 1.
The ousted anesthesia group,
Anesthesia and Perioperative Care Specialists, immediately began looking into Soma and found holes in what Parcells had been saying. Virginia Anesthesiology president Paul Rein made the issue public when he taped a
video questioning Soma's background.
On April 16, nine days after the contract with Soma took effect, Riverside and Soma parted ways because of the controversy, and Riverside Medical Group took over management of anesthesia services.
Since then, there has been a slowdown in surgery.
"Obviously we're still in the transition period here," Riverside public relations director Peter Glagola said. "All emergency and trauma surgeries are being done. It's true that some elective surgeries have been moved, but by Monday or Tuesday of next week, we are on track to be fully staffed. That means as many rooms are open per day as needed."
As for why the surgeries were rescheduled, Glagola said he was "not sure if it's physician choice or patient choice."
, a contract law professor at the
law school, said it is unusual to negotiate with one company, then sign with another.
"The new corporation is kind of fishy — that is a red flag," he said. "It sounds to me that there were people who were working for Compass and wanted to break away and form their own company."
It wouldn't be particularly unusual to sign with a wholly owned subsidiary. But if that was the case, Oman said, he would want to know some more details.
"If I had never heard of Soma before, and I had never heard of Compass operating its anesthesiologist groups as Soma, I would inquire," he said. "Because the question of who it is I enter into a contract with is incredibly important. In the event that the contract is breached, who would I have to sue and what kind of assets (do they have)? It seems odd that you would sign a contract with a corporation without being clear about who that corporation was."
Riverside's hospital board had little involvement in the change in contracts from Virginia Anesthesia to Soma.
Negotiating contracts is an administrative responsibility, not the board's responsibility, board chairman Jerry Allen said. Parcells did discuss problems with Virginia Anesthesia at the board meeting in February, and the board passed a resolution on April 1 endorsing Parcells' decision to cease contracting with Virginia Anesthesia, Allen said.
Riverside had information on Compass on file, because health-care companies send the hospital information regularly, Glagola said. The hospital did not issue a request for proposals, which could have given the hospital more than one firm to choose from.
Based on initial information provided by Riverside, Allen said, he was satisfied the new management company could serve Riverside.
"Obviously, knowing what we know now, we'd have some serious doubt," he said. "I will say that they did everything they said they would do up until the point we parted company."
In the future, Allen said, Riverside will look more closely at contracts under negotiation.
Alan Witt, chairman of the Riverside Health System board of directors and CEO of accounting and business consulting firm Witt Mares, said the process hospital administration used to choose Soma was "flawed."
"There's lessons that need to be learned, and that process cannot be repeated," Witt said.
"We have the responsibility to review this in detail, and to give guidance," Witt said. "Just as executive management has to give guidance to front-line management, the board of directors has the responsibility to give guidance to executive management.
"Systemically, do we have a flaw that needs to be corrected? A methodology that didn't work? With what we know of Soma today, more information would've been helpful at the time the decision was made."
Richard Pearce, the health system's president and CEO, learned about problems with contract negotiations after the fact, "which is appropriate," he said. Contracts fall under the purview of the hospital's administrator and board, he said.
"I have looked at the process, retroactively. And I believe that Dr. Parcells and the hospital's board followed appropriate procedures," Pearce said. "I do think that, in vetting the new management company, going forward we will improve that process, because obviously there were some things that were overlooked. In hindsight we could probably do a better job."
Glagola couldn't elaborate, saying Riverside is beginning that process.
"(Parcells) acted appropriately and in the best interest of the patients," Pearce said. "I'm personally proud of him and the board for the way they dealt with this. I think they did what they felt was right and what they needed to do. I'm sure this has been a tough decision, but it was the right one."
For more business news, go to twitter.com/veronicachufo or facebook.com/dpbusiness.