Continuing Turmoil at Danville and Martinsville Hospitals Raises Questions of Oversight – Again

Sovah Health Danville Hospital

by James C. Sherlock

Beckers Hospital Review reports that Sovah Health hospitals in Danville and Martinsville have eliminated the Chief Operating Officer (COO) positions at both hospitals.

Sovah announced that the responsibilities of those two positions will now be absorbed by “other members of the existing team.” Whatever that may mean.

Management turmoil at Sovah is hardly a new issue. But those changes just never seem to work.

Not even a little.

The timing and structure of these current changes are especially unusual given Sovah’s plea agreement with the Food and Drug Administration that is still in force. Seems employees were dealing drugs from the hospital supply.

Similarly unusual, unfortunate actually, are the weak-to-non-existent oversight activities of the Virginia Department of Health and the Accreditation Council for Graduate Medical Education (ACGME).

You read that right.

Sovah Danville is a teaching hospital.

Sovah Health. Sovah Health Danville and Martinsville hospitals merged into Sovah Health in 2017. The two hospitals are owned by Brentwood, Tenn.-based LifePoint Health, which acquired them in 2005. Neither is a trauma center.

In addition to the two hospitals, two emergency rooms and two outpatient imaging clinics, Sovah controls over 20 primary and specialty care physician clinics.

The Danville campus is roughly half again the size of the Martinsville operation. About 300 doctors are employed by Sovah in the Danville and Martinsville areas.

Sovah is distinguished by the patient volume of its emergency rooms, which at 60,000 visits a year is considered very high by Medicare, given the population served. Sovah Danville is underway with a $20 million expansion of its ER.

Profitability FYE 2021. FYE 2021 operating and total margins are now posted for Virginia hospitals.

Those two margins for Danville (15.4%) and Martinsville (14.1%) hospitals did not vary because they recorded zero non-operating gains or losses. Many Virginia hospitals in 2021 recorded enormous non-operating gains from federal COVID payments.

Nonetheless, Sovah Danville and Martinsville total margins were near the average total margin (14.6%) for all of Virginia’s acute care hospitals.

Profits exceeded $50 million combined on more than $380 million in revenue. Lifepoint is owned by Apollo Global Management.

Teaching hospital. You would not guess it, but Sovah Danville is a teaching hospital. A teaching hospital rated two stars out of five by Medicare. Resident physicians and medical students live in Danville and rotate through local physician practices and Sovah Health. characterizes Virginia teaching hospitals as follows:

A teaching and/or research hospital usually has many specialty units and is able to handle state medical disasters.

Virginia has both formal and informal teaching hospitals (which) have earned regional and national recognition for:

  • Special service to their communities;
  • Innovations in research; and
  • Procedural medical innovations.

No part of that description fits Sovah Danville.

Clinical staff shortages. At some point, a hospital is not competent to do its job, or at least offer all of its advertised services, if the personnel crisis is severe enough. I don’t know if Sovah has reached that point. LifePoint has 166 jobs posted in the Danville/Martinsville area. The vast majority are clinical positions in the two hospitals, mostly nurses.

That is a concerning number for two relatively small hospitals. Recruiting to that area remains a challenge.

As I have recommended before, clinical vacancies should be monitored not only there but statewide by the Virginia Department of Health for potential safety concerns.

Scandal. In 2020, the federal government discovered that employees had been violating the Controlled Substances Act from 2017-2020.

Currently Sovah is under court-ordered supervision by the FDA until 2026 for employee violation of the Controlled Substances Act (diversion of opioids), for which the hospitals paid the third largest fine for violation of that act in U.S. history.

The violations included:

  • From 2017 to 2019, a Sovah Health employee diverted more than 11,000 Schedule II controlled substances from Sovah Health;
  • From January to May 2020 a second Sovah Health employee tampered with Fentanyl vials and hydromorphone injectables by replacing the controlled substance with saline and diverting the controlled substance.

Sovah in June of 2022 paid the United States $4.36 million to settle claims that the hospital system violated the Controlled Substances Act (CSA) on numerous occasions between 2017 and 2020.

As part of the resolution, Sovah Health further agreed to be subject to a period of four years of increased compliance and oversight.

The increased compliance measures include, but are not limited to:

  • having cameras at all Automated Dispensing Machines to capture the activity of placing/removing controlled substances;
  • promptly reporting losses and diversion of controlled substances;
  • taking and reporting disciplinary action taken against employees found to have been responsible for theft, diversion or loss of controlled substances;
  • maintaining a mandatory random drug testing program for employees; and
  • conducting a full physical inventory of all federally scheduled II-V controlled substances more frequently than required by law.

It reflected a lack of management supervision.

Who knew?

Management turmoil. Sovah got a single CEO with the 2017 merger but retained a separate COO for its operations in each city. Sovah Health is headquartered in Danville.

After a highly critical 2019 article in the Martinsville Bulletin, extensive follow-up investigative reporting by that paper and critical letters from Delegates Adams and Marshall to LifePoint Health, in 2019 they replaced:

  • the COO of Sovah Martinsville;
  • the regional (five hospitals) CFO, VP Human Resources, Director of Education and Training and Chief Medical Officer; and
  • the Director of Surgical Services and the ICU Chief at SOVAH Danville.

In December of 2022 they brought in a new CEO to replace one who retired.

Now the operating chiefs of each hospital are gone, fair enough. But the positions will not be refilled, which is hard to explain.

This while the court-approved increased Food and Drug Administration (FDA) oversight and compliance are in force. And while each is rated two stars out of five by Medicare. (Medicare ranks both campuses as a single Danville hospital)

Bottom Line. It is difficult to know how elimination of the senior operations manager position at each of the two Sovah campuses will play with the 4th Circuit, which approved the CSA settlement, the U.S. Attorney for the Western District of Virginia, who negotiated it, and the FDA.

We’ll see. But there are a couple of bigger issues around the question of oversight.

First, LifePoint is still licensed to operate hospitals in Virginia with that record. Sovah Health is regulated and overseen by the Virginia Department of Health.

It would be useful for the Board of Health to check on how that oversight has been carried out through the endless management turmoil, ongoing clinical personnel shortages, bad Medicare ratings and the criminal settlement by Sovah over the past seven years.

 Second, Sovah Danville is still a teaching hospital subject to oversight by the  Accreditation Council for Graduate Medical Education (ACGME).

That hospital was due for its 10-year accreditation site visit by ACGME in 2020. There is no public access to those reports, but VDH could find out.

Virginians are left with nothing but questions.

Update Apr. 2 at 9:30 AM.  Profitability section added.