Former RMCH CEO sues staff, board
The former CEO of the Rehoboth McKinley Christian Health Care Services has fired back.
David Conejo was terminated on June 12 for allegedly mismanaging funds and creating an unsafe environment at the 60-bed hospital.
He filed a lawsuit against his former employer, Chief Medical Officer Valory Wangler, board of trustees Chairwoman Laura Hammons, former Lead Hospitalist Neil Jackson, Chief Nursing Officer Felicia Adams, Chief of Obstetrics and Gynecology Andrea Walker, urologist Christopher Hoover, Chief of Staff Mary Poel, Medical Assistant Jayne Ellis and John Does 1-10 and Jane Does 1-10.
The six-count lawsuit was filed with the U.S. District Court for the District of New Mexico in Albuquerque on July 24.
The suit alleges the hospital and staff purposely damaged the reputation of Conejo and his company, Healthcare Integrity. Several other allegations were made by the former CEO.
Rhonda Ray with RMCHCS emailed the Navajo Times on Monday, stating they were not going to comment on the lawsuit.
The lawsuit alleges the hospital and its staff damaged the reputation of Conejo’s company by publishing false and misleading information misrepresenting the quality of service Conejo and his company provided the hospital.
According to the hospital’s 2017 tax forms, Conejo’s annual salary was $645,640 as CEO. His company made $305,441, according to the hospital’s 2018 tax forms.
Hospital staff, including Wangler, was involved in a protest against Conejo, accusing him of being incompetent to lead the second-largest hospital in Gallup.
At the time, Wangler said chronic issues with mismanagement by Conejo had become “acutely more challenging” since the COVID-19 pandemic and the staff was “struggling to care for the patients.”
“So, we’re out here today asking for the resignation by our CEO David Conejo,” Wangler said on May 8.
In his lawsuit against Wangler, Conejo claims that she, along with other staff members, waged a campaign to damage Conejo and his company before the “public eye” and to persuade the board to terminate the contract with Healthcare Integrity.
“In waging this campaign, RMCHCS and individual defendants conspired together to damage the business interests and business reputation of HCI and David Conejo,” the July 24 lawsuit said.
According to the suit, before becoming the CEO in 2014, Conejo had served as the hospital’s CEO from 1983 to 1994. At the time, RMCHCS was called Rehoboth Christian Hospital. During his tenure, the suit said, Conejo aided a merger between RCH and McKinley General Hospital in 1983 to form the present-day hospital.
Conjeo left the hospital and returned to his home state of Texas until he was approached by New Mexico State Sen. George Muñoz and McKinley County commissioners Tony Tanner and Genevieve Jackson in 2014.
“Throughout 2013 and 2014, RMCHCS desperately sought a buyer, but to no avail,” the lawsuit said. “Investors were unwilling to take on the risk that RMCHCS’ combined debt and infrastructure problems posed.”
Conejo was convinced to come back, his lawsuit said. He sold his home and his property and returned to take over the hospital that had two to three days of operating cash on hand and $4 million in expenses, it added.
To manage the hospital’s finances, Conejo “proposed a management arrangement whereby he would operate the hospital to restore its financial health,” his lawsuit said.
According to the hospital’s 2013 tax forms, the hospital wrote off approximately $41 million to $68 million to bad debt during 2012 and 2013.
Working “long hours,” Conejo was successful in preventing the hospital from shutting down in 2014, the lawsuit said.
Conejo formed HCI in 2015 to provide administrative and managerial services to the hospital. In addition, the suit said, the company was created to acquire RMCHCS.
HCI and the hospital formally entered into a management agreement on Sept. 1, 2016, the suit said. The agreement was signed by then-board Chairman David Dallago.
As the hospital began to dig itself out of debt, the suit said, Conejo began working on “hiring more staff, identify(ing) business opportunities, build(ing) up” the hospital’s “operational capacity.”
The company also “lent money to new software start-ups,” the 61-page court document added.
When COVID-19 arrived in New Mexico in March, the state imposed restrictions on non-essential “elective procedures,” which are “typically the financial lifeblood of a hospital system,” the court documents said. The elective procedures also were RMCHCS’ “largest revenue stream,” it added.
“As the COVID-19 crisis began to overwhelm McKinley County, CEO Conejo was blamed with increasing frequency by certain members of the board for RMCHCS’s struggles during the pandemic,” the suit said.
As the financial strain worsened, the hospital ended 15 contracts, according to an April 6 email signed by Conejo.
“I ask that you double-down on our collective spirit of ‘we.’ Please, dig deep during these challenging times to find strength,” the email to hospital staff said.
During the May 8 protest, Wangler said Conejo went against the direction of the hospital’s chief nursing officer, Felicia Adams, who is also named in the lawsuit. The firings of the contract nurses “severely understaffed” the hospital, Wangler said at the time.
As the virus outbreak took hold of McKinley County in April, Conejo’s lawsuit says that Wangler, already feeling “overburdened” by the epidemic, “proceeded to accept 22 patients from the Na Nizhoozhi Center, effectively tripling the inpatient count.”
“The typical and appropriate industry practice would have been to transfer those patients, which RMCHCS was incapable of properly caring for, not to take on more and plunge the hospital’s current patients and staff into further crisis,” Conejo’s lawsuit said.
Wangler and other hospital staff called a vote of no confidence, “expressing our lack of confidence in the CEO’s ability to manage the hospital.”
The no-confidence vote was presented to the RMCHCS Board of Trustees on May 5 during a special meeting.
“The board members should understand that they are ultimately responsible for breaches in their fiduciary obligations to the hospital system by allowing the CEO to create unsafe working conditions,” the May 5 letter to the board read.
On June 11, the suit said, Conejo was fired. The board also severed ties with his company. A date to hear his lawsuit has not been set.