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Hospital seeks to purge district appointee from board

STORY BY MEG LAUGHLIN (Week of May 29, 2014)
Photo: Paul Nezi at hospital board meeting.

The governing board of directors of the Indian River Medical Center last week tried to purge the only board member who had consistently questioned controversial management decisions by pressuring him to resign.

The member in question, Paul Nezi, stayed away from last week’s regular board meeting, but whether hospital management succeeded in forcing him off the board remains to be seen.

On May 20th, hospital board members, including board chairman Tom Segura and board treasurer Jack Weisbaum – with assistance from West Palm Beach business attorney Robert Hauser – told Nezi that he had “breached his fiduciary responsibility to the hospital” and must resign or face a vote by the hospital compliance committee and the full board forcing him out.

The demand, given at a compliance meeting attended by most of the board and hospital CEO Jeff Susi and general counsel Val Larcombe, came as a complete surprise to Nezi, who was appointed to the board by the Hospital District in January, 2010.

“My feeling is that what happened to Paul Nezi on Tuesday is illegal, unethical and bullying of remarkable proportions,” said Hospital District trustee Burton Lee.

“I’m horrified over the extraordinary way this whole thing was handled. I’ve never heard of anything like it before,” said District trustee Trevor Smith.

For the past year, Nezi has spoken out about problems with patient care and finances at the hospital and has frequently asked tough questions of hospital leadership.  He has also expressed frustration about having his questions ignored, as well as being given contradictory financial information.

He also has voiced concern over the reluctance on the part of the hospital to be transparent with board members and District trustees.

In September, Nezi forwarded to District trustee chairman Tom Spackman a copy of an email he had sent to hospital board chairman Segura in July.

It said that hospital CEO Susi had lied about the cost for the hospital’s affiliation with Duke for the Cancer Center. Susi said publicly that the cost of the Duke affiliation was $300,000. Documents showed it was close to $600,000.

Because District communications are part of the public record, Susi and other hospital leaders became aware of Nezi’s email.

Also in September, Nezi sent another email to the District about misleading cash balances given by Susi in an email to the medical community. Nezi said he was considering resigning from the board over this issue, but said he would prefer that Segura terminate Susi, CFO Greg Gardner and possibly hospital attorney Larcombe. 

Unbeknownst to Nezi, hospital leadership was collecting the emails, which were termed breaches of Nezi’s fiduciary responsibility to the hospital at last week’s compliance meeting.

At issue was not that he was communicating false information but that he was not abiding by what hospital leadership saw as his duty as a board member to keep the information within the confines of the board.

“My fiduciary responsibility is not to the hospital; it’s to the patients, the medical community, the hospital staff and the taxpayers who own the hospital. I take that responsibility very seriously and do my best to raise issues so they can be addressed. I have every right to express my opinions to achieve that,” Nezi told Vero Beach 32963 last week.

More than once at Tuesday’s compliance meeting, Nezi replied “not true” as attorney Hauser listed his alleged offenses. But he was not allowed to see the file against him or to defend himself.

Attorney Fran Ross, a hospital board member, asked if Nezi had been allowed to see the file, which was in a thick folder of papers on the table in front of attorney Hauser.  When the reply was “no,” Ross asked, “Then how do you expect him to defend himself?”

But the question went unanswered, according to two people there, and the reading of alleged offenses continued.

By the end of the Tuesday meeting, after a lengthy recitation of accusations, critical comments and the threat of a vote against him, Nezi buckled.

“I’ll save you the trouble. I resign,” he told the group and walked out.

“What is most telling about that meeting is that they said his fiduciary responsibility is to the hospital when it’s not. It’s to the community. But most of the board goes along with such misstatements as if they’re being fed chocolate ice cream,” said District trustee Lee. 

In the days following the ambush, Nezi consulted with attorneys and concluded that his resignation was “coerced based on incorrect information” and, therefore, not valid. Furthermore, he and attorneys read the hospital by-laws and concluded that hospital board members had not followed due process and did not have the authority to ask for his resignation or to vote him off the board.

The by-laws say that an independent hospital board member, which Nezi is because he was appointed by the Hospital District, can only be removed if a majority of District trustees vote that the board member “repeatedly acts in a manner inconsistent with the public purpose for which the District was created.”

Then, that board member must be put on notice and can only be removed by the District if he or she reoffends.

Frequently, over the past year, Nezi’s concerns have aligned with the majority of District trustees, who are elected to oversee the disbursement of tax dollars to the hospital.

District trustees have expressed dismay over what they view as the reluctance of hospital leadership to acknowledge problems and fix them, as well as the hospital’s hesitancy to share information with them, the representatives of the taxpayers.

“If what I’m hearing is true, we will take action to make sure that Paul Nezi is treated in a fair and equitable manner,” said District chairman Tom Spackman.

Hospital board chairman Tom Segura did not respond to repeated messages from Vero Beach 32963 left on his voicemail.

Nezi, who has an MBA from Wharton, was a health insurance executive for over 20 years in Ohio and Virginia.  A member of the senior executive team at Anthem Blue Cross Blue Shield of Virginia, he retired in 2006 and moved to Vero Beach with his wife.

His years of service on VNA boards resulted in his being recommended to the District as an appointee to the hospital board, where he has served for over four years.

“I hope in some way I have shed light on issues that need to be addressed at our hospital so it will improve,” said Nezi.