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Brandon hospital's ex-chief sues Columbia over firing

The former administrator of Columbia/HCA Healthcare Corp.'s hospital in Brandon has sued the giant hospital chain, alleging she was fired for refusing to carry out orders she believed were illegal or threatened patient care.

Valinda Rutledge, who was hired to head the 255-bed Brandon hospital in December 1996, claims that Bill Hussey, then president of Columbia's Tampa Bay division, pressured her to increase home health referrals, cut staff and shorten neonatal hospital stays in order to increase profits.

When Rutledge refused, she said she was demoted in August and replaced by Mike Fencel, former head of Columbia's hospital in West Palm Beach. On Oct. 2, after notifying Columbia that she intended to sue the company under the state whistle-blower act, as well as for sex discrimination, Rutledge was fired.

Rutledge's suit, filed Tuesday in Hillsborough Circuit Court, comes in the midst of an ongoing government investigation into Columbia's business practices, particularly its home health business. The federal investigation has led to the indictment of three Columbia executives on charges of Medicare fraud. And many of Columbia's top officials have been replaced, including Hussey, who resigned suddenly in early September.

Dr. Thomas Frist Jr., who took over as chief executive of Nashville, Tenn.-based Columbia in late July, has promised cooperation with federal investigators. With the recent appointment of a vice president of ethics, Frist has also put special emphasis on telling employees to put patients before profits. But Wil Florin, Rutledge's attorney, said his client was continually rebuffed when she voiced her concerns to Columbia's corporate attorneys, both before and after Frist took office.

"The complaint should speak for itself," said Florin.

Rutledge's complaint seeks unspecified damages, including payment for lost wages, attorney's fees and mental anguish. "We aren't setting an amount," said Florin. "That's what juries are for."

Commenting for Columbia's Tampa Bay division, spokeswoman Deb McKell said, "We have received Rutledge's complaint, we disagree with it, and we plan to defend it."

Though Hussey is not a defendant in the suit, his attorney said he vigorously denies Rutledge's allegations.

"It is a transparent attempt to extract money from the corporation by taking allegations already published in the newspaper and putting them on paper and saying "Give me money,' " said Jim Felman, Hussey's lawyer. "The allegations are absolutely and completely without merit, and we hope the company defends it."

Hussey is also considering options to defend himself against the allegations, Felman said. "Obviously, this is very damaging to his reputation," said Felman. "And it's particularly disappointing to him because he gave her a reference for her new job. If Bill was the kind of guy who was ordering her to do outrageous, unlawful things, why would she call him to be a reference?"

Rutledge, who had been vice president at a not-for-profit hospital in Michigan before joining Columbia, is now chief operating officer at a not-for-profit hospital in Oklahoma. According to the suit, Rutledge took a $20,000 pay cut to join Columbia, where she was supposed to receive an annual salary of $110,000, plus bonuses based on the hospital's profitability. By refusing to take steps to cut down the hospital's costs, Rutledge's lawyer said, she was directly affecting her own compensation.

Rutledge's suit was filed after her lawyer and Columbia failed to reach a settlement during informal discussions. In addition to claiming that she was penalized for opposing Columbia's business practices, Rutledge is alleging sex discrimination because of her demotion and replacement by a man.

In her suit, Rutledge said Hussey put her under intense pressure, beginning in May, to hire a discharge planner at the Brandon hospital to funnel more of the hospital's patients into the company's home health agency. When Rutledge refused, calling such self-referrals illegal, Hussey assured her that such positions had been approved by David Vandewater, Columbia's president and chief operating officer. Vandewater has since resigned.

Rutledge said she then contacted Bob Templin, an attorney at Columbia's headquarters, about her concerns. She alleges that Templin called her "with headquarters' corporate approval to implement Hussey's directives."

Rutledge alleges that Hussey continued to pressure her to fill the discharge planner position until mid-July, when federal agents raided Columbia's Tampa headquarters as well as two local home health offices. According to the suit, after the raid, "the directives and pressure suddenly stopped completely."

Rutledge's suit also claims that Hussey wanted her to cut 150 jobs at the Brandon hospital, which has 1,273 employees. In mid-July, 45 jobs were eliminated at the hospital, but Rutledge refused to make additional cuts, the suit says, fearing they would jeopardize patient care. "I know she didn't like making the cuts," said Dr. Thomas Davison, Brandon's chief of staff, who blames Rutledge's suit on "career disappointment."

Hussey also allegedly told Rutledge to pressure neonatal physicians to discharge babies faster in order to increase profits. Rutledge was supposed to threaten to cancel physicians' contracts if they did not comply. Rutledge said she refused, citing concerns about the patients' health.

Davison said he never heard any complaints from neonatal physicians about being under pressure to shorten stays. "And I would have heard," he said. "I'm the complaint department."

In her complaint, Rutledge claims that after she objected to further layoffs in a meeting with Hussey in August, he abruptly told her that Fencel would be taking her place.

Furthermore, Rutledge alleges that during an interview with several Brandon hospital executives prior to taking the new position, Fencel said that he had destroyed documents in relation to an FBI investigation and he encouraged Brandon executives to do the same.

Rutledge said that she immediately alerted Hussey and other Columbia officials about Fencel's statement, but that no action was taken.

Fencel declined to comment on the allegation.

This is not the first time charges of destroying documents have been made against Columbia. In El Paso, Texas, the FBI found business records from Columbia facilities in a gas station's garbage bin. And in an affidavit made public about a month ago, the government said a witness testified that documents were routinely shredded at the Tampa division office.

Following her demotion, Rutledge contacted attorney Florin, who began informal discussions with Columbia's corporate attorneys about her complaints and possible settlement. At the same time, Rutledge began looking for a new job.

When she was hired in Oklahoma, she notified Columbia of her intention to resign at the end of October. When Florin notified Columbia on Oct. 2 that Rutledge intended to file a lawsuit, she was immediately fired and banned from the building.

Though many of Rutledge's allegations touch on issues that are being scrutinized by the government, Florin said she has not yet spoken with investigators. But that's about to change.

"The FBI contacted us today," Florin said Wednesday.