UMC consulting contracts questioned

Two University Medical Center officials told a jury Friday that they had concerns about several consulting contracts given by the hospital during Lacy Thomas' tenure.

Lee Myers, who retired in 2008 from his job overseeing hospital account collections, questioned the selling of 800,000 patient accounts that were deemed bad debt.

UMC sold the accounts, worth $670 million, for $8.5 million to a company called Orion. Even though most of the accounts were older and tough to collect on, a group of accounts were in payment plans collecting about $400,000 a month, Myers said.

At that rate, Orion could have recouped its costs in less than two years, he said.

Myers also questioned why ACS Consultant Co. received a $1.1 million commission on the sale after one of its representatives told him it would be a free service.

"I don't believe we accomplished anything in that deal," Myers told the jury.

Thomas faces charges of theft and misconduct by a public officer stemming from contracts UMC awarded to ACS and four other companies during his three-year tenure running the county's only public hospital.

Prosecutors contend that Thomas wanted to enrich friends and associates from Chicago with contracts that were unnecessary or duplicated services.

Thomas' lawyer, Dan Albregts, says his client brought in his Chicago contacts because he had worked with them at a large county hospital there and trusted they could help solve the major problems at UMC.

UMC's internal auditor, Bill Andrews, had his own concerns about the contracts.

One of them involved Crystal Communications, which was hired to study and implement a new phone system in the hospital.

Crystal Communications originally submitted a proposal for $145,550, which included $29,000 in travel expenses for the Chicago-based workers. That proposal was later dropped to $132,780 when it went against a competitive bid by a local company, Networks West, which bid just under $100,000 for the job, Andrews said.

Thomas chose Crystal Communications, but the final contract amount grew to $146,961, $14,000 more than the original bid and about $50,000 more than the competing bid, he said.

During cross examination, Albregts suggested that Crystal Communications was selected because of its experience in hospitals, which have different needs than other large businesses.

Andrews also testified about what "Thomas cost UMC" by adding up all the controversial contracts and related costs, which totaled $9.9 million.

Under cross examination, Andrews said he never factored in any potential benefits the contractors provided to UMC.

Contact reporter Brian Haynes at bhaynes@reviewjournal. com or 702-383-0281.