Kalispell Regional Healthcare announced yesterday that General Counsel William Gibson and interim Chief Financial Officer Tracey Talley, with support from other members of the executive team, will oversee hospital operations until a permanent replacement is found for departing President and Chief Executive Officer Pamela Robertson.
Robertson announced on Sept. 7 that she is leaving her position for personal reasons, effective Nov. 30. KRH said in a statement that the board of trustees will establish a search committee while Gibson and Talley fill her role in the interim.
Gibson began working for KRH last year and became general counsel in 2018 upon the retirement of his predecessor. He was previously senior counsel with the law firm Norton Rose Fulbright in its Dallas, Texas office, with a broad practice that included regulatory and corporate matters.
Talley held various CFO roles within Tenet Healthcare Corporation, a multi-national health-care services company based out of Dallas, beginning in 1995 and served as the regional vice president of finance from 2002-2004. He went on to serve as CFO at Valley Presbyterian Hospital in Van Nuys, California from 2004-2007 and most recently at Alvarado Hospital in San Diego from 2007-2010.
From 2010 to present, Talley has worked as a consultant, serving as interim CFO predominantly for nonprofit hospitals, including KRH.
In response to Robertson’s pending departure, S&P Global Ratings downgraded KRH’s credit outlook from stable to negative on Sept. 14.
“The negative outlook reflects our view of the unexpected departure this coming fall of Kalispell Regional Health System’s CEO and modest internal process-related policies to formalize and standardize industry best practices to ensure operational consistency at all levels of the organization,” S&P Global Ratings credit analyst Wendy Towber said in the announcement on the outlook change.
“In our view, the upcoming departure of the CEO, following considerable management turnover this past year, highlights the lack of succession planning and puts further at risk the continuity and stability of the management team, turnaround plan and operations — given the direct and significant effect management practices have on a hospital.”
The S&P’s inclusion of “considerable management turnover” in its credit rating outlook refers to a series of leadership departures earlier this year, including Chief Nursing Executive Karen Lee and CFO Charles Pearce. Lee retired and Pearce resigned.
Lee’s replacement is Teresa Fisher, who is also assuming the role of administrator of the 190,000-square-foot Montana Children’s Medical Center, due to open next spring. Talley has filled in for Pearce as interim CFO, and now adds president and CEO duties to his interim responsibilities, alongside Gibson.
The lowered credit outlook and CEO transition come at a critical time for the hospital, which, in addition to undergoing multiple large-scale construction projects, has been grappling with a lawsuit filed by its physician network CFO Jon Mohatt and a federal investigation into allegations of fraud and illegal compensation to certain physicians.
The hospital has set aside $21.5 million for a potential settlement. A U.S. District Court judge has set an early October deadline to finalize the settlement.
In addition to the lawsuit and investigation, nurses at KRH have launched a unionization effort.
Robertson replaced Velinda Stevens, who had been president and CEO of KRH for nearly two decades before passing away in January 2017 after a prolonged battle with cancer. Robertson officially took over the position on Sept. 15, 2017.
In Robertson’s announcement that she’s stepping down, she acknowledged “major challenges” at the hospital, but said they are “well underway to being behind KRH” and that she has “extreme confidence in the organization’s future.”