Consultant details UMC work

A consulting company official who worked with former University Medical Center chief Lacy Thomas in Chicago and Las Vegas testified Thursday that Thomas always tried to pay less, not more, to consultants such as him.

"Mr. Thomas was fair but was always looking out for the hospital," said Bob Mills of ACS Healthcare Solutions.

Thomas is on trial on 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.

The prosecution has not rested its case. But because of scheduling issues, two defense witnesses, Mills and fellow ACS employee Ross Fidler, took the stand Thursday.

Mills told the jury that he contacted UMC in 2004 to pitch taking over and improving the hospital's bill collection and cash flow. At the time, Mills worked for Superior Consulting, which was later bought by ACS.

Mills gave a presentation to then-Chief Financial Officer Mike Walsh and then-Chief Operating Officer Blain Claypool, but they declined his services, he said.

Mills made regular follow-up calls until Thomas invited him back about a year later.

Thomas made the invite with the condition that Mills' company waive its usual $50,000 fee to visit the hospital and complete its extensive study of the financial situation, which is used to determine whether to move forward, Mills said.

Thomas agreed to hire Mills' company, which would be paid a commission based on how much money it collected above a monthly baseline amount.

Mills and Walsh negotiated the initial baseline at $27 million, but Thomas raised it to $29 million to avoid any questions about the deal, Mills said. Thomas later added another $600,000 to the baseline because of upcoming rate increases, he said.

ACS paid about $300,000 a month to cover employee salary and travel costs and hoped to make up to $5 million a year under the contract, which was "relatively small" for the Fortune 500 company, Mills said.

During its 19 months at UMC, ACS retrained workers, implemented up-to-date procedures and found other ways to save the hospital money that didn't count toward its monthly collection amounts, he said.

Fidler, who was ACS's representative at UMC, testified that changes made by ACS, such as eliminating common billing errors, saved the hospital about $2 million a month.

The ACS contract eventually came under scrutiny by Clark County auditor Jerry Carroll, who questioned several changes to the contract, including lowering the baseline, that could have boosted ACS' payouts without it collecting more in patient bills.

Albregts has suggested the baseline was lowered to provide ACS an incentive to stay on the job because it was consistently below the baseline and not making any money.

The county eventually terminated the contract when ACS failed to reach the baseline for four consecutive months. ACS sued the county, which will pay $795,000 to settle the lawsuit, ACS lawyer Don Campbell said.

Mills said the ACS contract with UMC was the first that didn't "substantially surpass" expectations. He said slow Medicaid payments from the state and a lack of cooperation in some UMC departments hindered his company's success.

"It really hurt me personally that we did not succeed here," Mills said.

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