St. Luke Hospital CEO resigns during tense board meeting

There was standing room only at the St. Luke Hospital board meeting on Tuesday night in Marion.

The basement meeting room in the St. Luke Clinic was standing room only as Marion residents showed up to the monthly hospital board meeting Tuesday night to hear St. Luke Hospital (SLH) either confirm or deny plans to bring in their own pharmacy to the hospital.

As the meeting opened with local Lanning Pharmacy owners (Gene and Traci Lanning) on the agenda, it quickly became evident that the meeting was much more complicated than many originally thought.

Background

On April 19, an article came out in the Marion Record in which former SLH board member Gene Winkler was quoted as stating that SLH CEO Jeremy Ensey wanted to bring his sister-in-law, Laura Ensey, a pharmacist in Herington, to Marion to open a pharmacy for the hospital.

Winkler also posted on Facebook on Monday, April 24, that he invited all to the board meeting on Tuesday night at 5 p.m. He informed the public that they are stockholders since they pay taxes and said all had a right to know what was going on.

Winkler said, “The CEO has been hurting the hospital for a long time by causing good doctors and nurses to live (SIC) our hospital. Now he is trying to do the same thing to Lanning’s Pharmacy. Please be present at the meeting and show your support to Traci.”

The Free Press called and spoke to Winkler before running an article on Monday, and Winkler stated that what he said had been taken out of context by the Record. He also stated that he spoke with the hospital lawyer and was told not to say any more to anyone. CEO Jeremy Ensey confirmed that Winkler received a cease and desist letter. The Free Press has a copy of this letter that Winkler received on April 24. The letter states that Winkler is to immediately cease and desist from making all such false and defamatory statements about the hospital and its employees.

Late afternoon on April 24, Winkler made a post on Facebook, stating that he had only quoted rumors to the Record, and he publicly apologized to Ensey.

According to an editorial in the Marion County Record, a reporter attempted to reach the hospital and officials for their story. Ensey stated that he did not receive any emails from the Record or was reached out to about the rumors about bringing in a pharmacy. Ensey also stated in an email to the Free Press that he attempted to correct the rumors and did not hear back.

340B Program

The 340B program is a federal program that allows qualifying, critical access hospitals, such as St. Luke, to purchase prescription drugs at reduced rates of up to 50 percent. This allows qualified hospitals and clinics to stretch federal resources as far as possible and reach vulnerable patients who are underinsured or uninsured. The program helps hospitals reach more eligible patients and provide more comprehensive services.

Traci Lanning, said, “When the program is managed correctly it is beneficial to our business, and in the past six weeks, we have realized how important it is to those in our community that lack insurance coverage. It has been our goal in the past to work together with the hospital to make the program a success to all parties.”

According to an email from SLH lawyer Alex W. Schulte, per the contract between Lanning Pharmacy and St. Luke specifically, St. Luke purchases the 340B eligible drugs and ships them directly to Lanning to be dispensed to St. Luke’s patients. In exchange for Lanning’s services, Lanning receives a dispensing fee, which is 43 percent of St. Luke’s net revenue from eligible 340B prescriptions dispensed by Lanning. Lanning is required to bill and collect for prescription co-payments and third-party payables for all eligible 340B prescriptions Lanning fills on behalf of St. Luke.

Hillsboro Hometown Pharmacy also contracts with SLH in this program, and there have been no reported problems.

SLH Board Meeting

The meeting began with Sheriff Jeff Soyez being sworn in to fill the spot vacated by Gene Winkler.

Lanning then read a letter she prepared for the board to open up the meeting on Tuesday, April 25.

She began by thanking them for allowing them to be on the agenda and stated that the pharmacy appreciated being part of the 340B program.

Lanning then said, “However, over the last couple of years, we feel that the hospital has taken advantage of the program and manipulated certain aspects of it to their advantage. When we have questioned these actions, we have been met with hostility or a complete lack of communication.”

She went on to say that, in January of this year, they again had questions and concerns about November and December invoices and told Ensey were not going to pay until questions and concerns were addressed. She stated they received no response back from Ensey but did receive a demand letter from St. Luke’s attorney and were put on notice that the hospital board was to have no contact with the Lannings or any representative of the business.

She said “We have no idea why the CEO would go to such lengths as to hire an attorney using taxpayer dollars when all we had asked for was an explanation about certain invoices and qualified prescriptions. We paid St. Luke in full, including interest, on April 3, and still to this day, we are unsure as to why there was no communication from the CEO or why the board members were directed to have no communication with us.”

Lanning went on to say that they have paid the full amount to St. Luke but still believe the hospital owes the pharmacy money, although she did not say how much. She also stated that SLH completed a Health Resources and Services Administration (HRSA) audit but feels it is not accurate.

She said, “Due to the fact that St. Luke is denying that there are plans for a pharmacy and denying that there are problems with the invoicing, we would like to request an independent audit be done. We are willing to pay for the audit up front, and if the findings show that we are wrong, we will apologize and move on. However, if the audit findings show that we are correct, we would ask the hospital to pay for the audit and reimburse us the interest we paid on April 3.”

Another request Lanning made is to have Ensey and third-party consultant AuthorityRx address the questions submitted to St. Luke’s attorney at last month’s meeting.

“We have had no response or even an acknowledgment that this letter was presented to board members. And lastly, we would like the CEO be directed to recognize and communicate with a 340B consultant of our choosing to represent our pharmacy. We do not want to hire a consultant and then have the CEO refuse to communicate/cooperate with said consultant as has happened twice in the past. We are hopeful this situation can be resolved and communication and trust can be restored between our pharmacy and St. Luke. The approval of an independent audit is the first step in this process, and we hope that the board will approve that request this evening,” she said.

Board President John Wheeler thanked her for her time and said they needed time to reply since their lawyer wasn’t able to come.

Lanning asked if the board had a timeframe for when the pharmacy would hear from them.

Wheeler asked when she would like to hear from them.

Lanning replied, “Today. We’ve waited three months.”

Wheeler said, “We didn’t even know who we were going to hear from tonight, and this is the first time that we have seen any of this. We need a little time.”

Gene Lanning joined in, “Did your attorney address the issues that we had last month, because she [Traci] spent a lot of time typing a letter so he can read it to you guys or show it to you so you could know our concerns? Did you guys see it?”

Some board members said they had, and some said they hadn’t.

Gene Lanning said, “We’ve heard no response back from that.”

Traci Lanning said, “I mean, my biggest thing is lack of communication. This is the third time we’ve requested to be on the agenda. I would like to know what purpose there is to not communicate with us. I would like to hear in at least a week—two at the most.”

Wheeler replied, “I will make sure Alex [lawyer] gets this letter.”

Traci Lanning asked, “Will there be a special meeting called before the next board meeting?”

Wheeler said, “We certainly can do that if needed. We would just need to coordinate with Aaron, our consultant, and our attorney, Alex, just to make sure we are staying within Kansas Open Meetings Act.”

Traci Lanning said, “And if I hire a consultant in that time, can I be assured that there will be communication and cooperation from the CEO?”

Jeremy Ensey said, “The last communication I had with Jared, the former consultant, was in June of last year. I emailed him and he emailed me and then the emails just stopped. I didn’t think about it. Jared never followed up with me until I think you emailed me back in August.”

Traci Lanning said, “Well, I can show emails that he had sent.”

Ensey replied, “OK, he and I emailed I think from about March to June of last year, and that was the last email I had from Jared.”

Traci Lanning replied, “That’s good to know. Thank you.”

Board Member Byron Lange then joined in and spoke to Traci Lanning.

“I would like to address your question about why we hired an attorney using taxpayer money,” he said. “That’s a board decision, and I think we all would stand behind it. All seven of us were sworn in to look at the best interests of the hospital and what is in the best interest of the hospital.”

Traci Lanning cut in, “To communicate with the pharmacy that has given you a lot of money in the last three years—”

Lange said, “Your account has been perpetually past due in the past two years. You signed a contract extending this in November and within 15 days defaulted on that contract. There’s reason to have an attorney to protect this hospital, especially when you are in arrears for almost $400,000.”

Traci Lanning replied, “I was not behind that amount of money until—”

Lange said, “Wait a minute, please. When it comes to the point where we have that amount of money that could bankrupt a hospital, that is when we need to hire an attorney. So that should answer your question.”

Traci Lanning said, “OK, that’s fine. Then I know where you guys stand, and I completely understand. Thank you.”

Lange said, “Our position is to protect the hospital.”

Traci and Gene Lanning then walked out of the meeting.

The meeting proceeded uneventfully with normal business until the end when there were three 30-minute executive sessions. Following, the board made a motion to accept Ensey’s resignation effective in 90 days on July 24.

Resignation

“It’s something my wife and I had talked about before. This has been my passion for 10 years. I’m in the hospital that I was born in. I’m in the hospital my grandfather was a physician in for over 30 years—in the community my parents grew up in. It was a dream job, really,” said Ensey. “I never thought I would be the CEO here in Marion when I came here. I have loved seeing what we have done. I have loved being a part of it.”

Ensey went on to say that he thinks health care, in general, whether it be nurses to CNAs to housekeeping staff, have had to jump through multiple hoops—have had more regulations put on hospitals than anywhere else.

“And it’s been tiring. So Tammy and I have talked about it, especially the last six months if I was gonna do something else. I don’t know what that something else is. All I know is health care. All I know, my adult life anyway, is health care. But I just felt God leading me a different direction. Just something different. And so that last weekend, what I felt God telling me through prayer was that I’m supposed to trust him. And through that, I just felt like I’m holding onto my job because of financial security, my own wellness. On Saturday night, I really felt like I’m supposed to resign. I don’t have a job lined up. I have an idea of where God is leading me, which is not health care right now,” he said.

Ensey said on Monday, when everything started getting stirred up about the pharmacy, he wanted to fight and defend himself.

He said, “That is pride. That’s my pride. I believe Satan uses our pride. There’s not a verse that talks about pride being good. So I have to let go of my pride and follow what I believe God is telling me to do no matter what else is going on around me. I explained that to the board Tuesday night. I apologized to them, because I knew how it was gonna look right after everything that had played out Monday and then, of course, Tuesday night at the board meeting. They were surprised but very supportive.”

Other information

As of Friday, April 28, according to Ensey, Lanning Pharmacy has paid SLH in full. They have not made it clear what they feel SLH still owes them that they referred to in the letter that was handed out at the board meeting.

Traci Lanning did not have any further comments to give at this time outside of her letter, other than she has no ill feelings toward the hospital.

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