Outrageous Allegations Rock Bronx-Lebanon Hospital

Someone could make this into a movie.

On June 4, 2017, the New York Post published two articles which leveled allegations of shady dealings between the Bronx-Lebanon Hospital and organized crime.

According to The Post, construction expenses at the hospital’s new nine-story outpatient center ballooned by some $5 million—with cash allegedly ending up in the pockets of the Lucchese crime family and hospital executives.

Lucchese underboss Steven ‘Wonder Boy‘ Crea, Sr. and associate Joseph Venice were charged with wire and mail fraud in connection with the project at “a major New York City hospital,” according to a federal indictment unsealed last week in a major mob takedown.

The document didn’t identify the hospital or reveal the scheme’s dirty details.

According to The Post, Crea, 69, had close ties to Sparrow Construction, the Bronx firm in charge of building the $42 million annex at Bronx-Lebanon. He was a regular visitor to the firm’s offices while the center was under construction, a source told The Post. Crea worked for Sparrow before he was busted in a 2000 state racketeering case. At that time, he was considered the acting boss of the Luccheses.

The Post said that work began on the Bronx-Lebanon outpatient center in 2009 and was supposed to take 19 months but wasn’t finished until 2014 and was plagued with cost overruns. Sparrow was the general contractor and billed the hospital $26 million for only $21 million worth of work, sources told The Post.

The heating and ventilation system cost $2.3 million to install. Yet ‘the hospital still paid somebody $5 million’ for it, the source said.

The alleged scheme was carried out through falsified invoices and change orders, the source said.

“The hospital didn’t question one change order,” the source said.

The bulk of the project was paid for through the sale of $36 million in state Dormitory Authority bonds. The hospital is paying back the Dormitory Authority over 25 years.

The Post vs. Bronx-Lebanon CEO Fuentes

The New York Post has had a long running obsession with Bronx-Lebanon Hospital CEO Miguel Fuentes.

Over the years The Post has made a point of detailing Fuentes’ compensation and lifestyle.

Here are a few of The Post’s comments:

“Longtime CEO Miguel Fuentes’ total compensation came to $1.7 million in 2015, according to its latest tax filings.” “Fuentes lives a luxury lifestyle with a condominium on the Upper East Side and a Southampton retreat with a pool.”

Hospital CEO Miguel Fuentes hired [Dr. Ira] Kirschenbaum as a division chief without consulting Dr. John Cosgrove, who was then chief of surgery and would have overseen him, Cosgrove told The Post.

Cosgrove said he did not have a chance to vet Kirschenbaum. The Post’s article suggested that Dr. Kirschenbaum was hired to push “moneymaking surgeries such as hip and knee replacements.”

Said The Post: The hospital lavished six-figure bonuses to its chief of orthopedics, Dr. Ira Kirschenbaum, despite brass being told of four deaths after he arrived in 2008 and about others patients who suffered serious complications, according to sources.

Kirschenbaum received a $314,210 bonus in 2014 and a $180,940 bonus in 2015, according to Bronx-Lebanon’s tax filings. The extra pay came on top of his $851,000 salary.

Whistle Blowers

Seven hospital employees, who identified themselves as doctors, nurses and technicians, sent The Post a copy of a letter they said they presented to a state medical disciplinary panel to complain about patients more recently injured under Kirschenbaum’s care—including one who allegedly lost a leg.

The letter was sent anonymously, and the state health department would not comment on any complaints to the Office of Professional Medical Conduct.

Furthermore, Dr. Cosgrove, who appears to have become a whistleblower, alleged dodgy payments to hospital employed physicians at the behest of Mr. Fuentes, apparently to increase patient volume.

“Seeing a patient in the clinic is your obligation as a hospital physician and that should not be incentivized,” Cosgrove said. “Mr. Fuentes said at many meetings he wanted to hit a million-visit mark at their 55-or-so outpatient clinics.”

Doctors were already paid salaries by Bronx-Lebanon, and the clinic bounties came from the Medicaid reimbursements, according to Cosgrove.

Such an incentive system was ripe for abuse because it could entice doctors to schedule additional, and possibly unnecessary, visits, he said.

Finally, The Post’s article reiterated Mr. Fuentes’ total compensation of $1.7 million in 2017, but added that he has a car and a driver—and a source described a $20,000 glass-and-tile shower for his office bathroom.

Fred Miller, a hospital lawyer, said Bronx-Lebanon doctors were not paid clinic bonuses, only salaries, and that compensation was “consistent with Medicare/Medicaid principles.”

Miller acknowledged that a shower had been installed, but called it “modest” and disputed its cost.

But Wait, There’s Still More

As if the news couldn’t get worse or more outrageous, Bronx-Lebanon was also hit with a hacking scam.

In May, Bronx-Lebanon disclosed that it had been the victim of computer system breach which disclosed as many as 7,000 patient mental health and medical diagnoses, HIV statuses and sexual assault and domestic violence reports along with names, home address, addiction history and religious affiliation.

According to the hospital, anyone who was a patient at the hospital between 2014 and 2017 is at risk. The breach occurred because a misconfigured Rsync backup server hosted by the third-party records management vendor iHealth Solutions was left susceptible to a hacker.

iHealth reported the breach to Bronx-Lebanon and hospital officials took steps to lock down the server and protect the data to include hiring a security firm to handle the problem. According to a news report, only iHealth said it does not believe the data has been misused.

“iHealth, took immediate steps to protect the data,” the hospital said in a statement to NBC news.

A 120-Year Legacy

Bronx-Lebanon was founded as the Lebanon Hospital by Jonas Weil in 1890. In 1962, Lebanon Hospital merged with Bronx Hospital, and since 2016 the combined center has served a teaching hospital for Mount Sinai School of Medicine.

Today Bronx-Lebanon among the largest providers of outpatient services in New York City. Its ER handles approximately 140,000 visits annually making it one of the busiest in New York.

Its outpatient practices are also certified as a Level Three Patient-Centered Medical Home (the highest designation) by the National Center for Quality Assurance.

These allegations have, no doubt, rocked this proud institution and represent a real challenge to its 120-year legacy.