News & Features

‘Clearly a Challenge’

New Kalispell Regional Healthcare CEO discusses settlement, compliance program, future and vision

Dr. Craig Lambrecht, the new president and chief executive officer of Kalispell Regional Healthcare, didn’t mince words when asked about the realities of his new job overseeing an institution that is mired in the aftermath of a lawsuit, federal investigation and $24 million settlement, plus an ongoing mandatory compliance program overseen by the U.S. Department of Justice.

“It’s clearly a challenge,” Lambrecht said in an April 15 interview.

But he’s just as forthright in describing his reasons for taking on the challenge.

“The thing that piqued my interest the most was the quality of people in the community and the commitment of the employees, despite all the other activity, was just so stellar,” he said. “People are so committed to doing their jobs; people love being here. That was a huge intangible that I didn’t see in the paper. That sparked that interest of, ‘you know what, this is very doable,’ despite what was going on.”

“At the end of the day, you look at what the employees and providers have accomplished, we’re still a 5-star rated CMS organization,” he added. “The health care and the safety are stellar.”

Lambrecht, who is in his first month on the job, has deep ties to the Treasure State, as his family is originally from the Hi-Line near Havre and operates an open-grazing cattle ranch in southeastern Montana. He served in the U.S. National Guard for 30 years, including three overseas combat missions, and received numerous awards for exemplary service during his military career, all the while pursuing a parallel track in medicine.

Lambrecht received his doctor of medicine (MD) from the University of North Dakota School of Medicine and completed his emergency medicine residency at the Medical College of Wisconsin. He practiced emergency medicine in the military and served as a commander. He also has a Master of Science in Health Services Administration, a Master of Public Health and a Master of Business Administration.

Lambrecht was a practicing physician before moving into health care leadership in 2002 as senior chief medical officer with the North Dakota Department of Health. He later served multiple leadership roles at Medcenter One Health System in Bismarck, North Dakota before becoming president of Sanford West, a member of the Sanford Health System, a position he has held since 2012.

“Suddenly you’re not practicing as much medicine and you’re wearing a tie,” he said of the career transition into leadership.

Lambrecht replaces Pamela Robertson, who departed as president and CEO in November after a year in the position. Her tenure was rocked by the public release of previously sealed federal litigation filed by the hospital’s former physician network chief financial officer alleging that executives and certain physicians orchestrated a widespread illegal kickback scheme. The activity detailed in the allegations occurred under Robertson’s predecessor, the late Velinda Stevens.

Kalispell Regional Healthcare (KRH) admitted no wrongdoing and settled the case. The $24 million settlement, to be paid out by the hospital over six years, is the largest False Claims Act recovery in Montana history.

As part of the settlement, KRH was also required to enter a compliance program with federal authorities through a Corporate Integrity Agreement (CIA). The agreement requires the hospital to hire a compliance officer and imposes new duties to monitor, report and certify that its financial arrangements with physicians meet federal requirements surrounding federal health care programs like Medicare and Medicaid. A violation could mean exclusion from those programs.

The CIA lasts five years and also includes requirements to appoint a compliance committee; develop written standards and policies; implement an employee training program; retain an independent review organization; establish a confidential disclosure program; report overpayments, reportable events and ongoing investigations or legal proceedings; and provide an implementation report to the Office of Inspector General on the status of compliance activities.

KRH submitted its first report in January, and Lambrecht said the hospital is putting the pieces together for a “robust” compliance program that meets all of the federal requirements.

“It’s a challenge that is pretty clear: here are the rules,” he said. “We’re in a very regulated environment. You play by the rules … At the end of the day, if we fall short in the compliance program, the risk is losing Medicare funding. If we lose Medicare funding, we’re not viable.”

“I felt very, very confident,” he added, “that despite all the information and all that had happened, this was not an intentional effort to defraud or do something bad. It was an intention to put together a system that could create a delivery system for the people of Northwest Montana where they could come, where they could stay, they didn’t have to travel, and where they had incredible providers and staff. I didn’t feel there was deliberate wrongdoing, and that was absolutely key.”

But Lambrecht acknowledges the need to repair trust and relationships with both the public and staff: “absolutely, from a credibility standpoint.” Earlier this month, he held open forums welcoming anybody under the KRH umbrella: from volunteers to doctors to environmental services to nurses, as well as their spouses.

More than 1,500 people attended the forums, and Lambrecht said he asked for feedback in three major areas: advice for him and suggestions for where to focus his attention; identifying opportunities at the hospital; and identifying challenges.

“Let’s look at the path forward now,” he said. “Let’s look at what are the things that are being done to make sure we have compliance, that we have a very credible system that’s putting the patient at the center of the universe, creating access and great quality. That transparency is going to take some work. From the community to even employees, the trust discussions are very heartfelt.”

“Everybody’s looking to us, and you’re looking to me, to create an environment where we’re credible and our patients trust us and our community trusts us and you want to work here,” he continued, describing his conversations with employees. “We want this to be the best place to work … We need to be that employer of choice for the region and we need to be the ultimate community partner, and not have folks wondering, ‘What are they really up to?’ That’s not going to promote an environment of trust and great care. ”

Lambrecht notes that the valley is second fastest growing area in Montana behind Gallatin County, and KRH must keep up with that growth — in terms of technology, providers, services and wages — as the region’s leader in primary, secondary, tertiary and burgeoning quaternary care.

“You can’t do that as a status-quo organization,” he said. “But you can’t be reckless. This is about growth that makes sense.”

A shining embodiment of the hospital’s growth will open on July 1: the Montana Children’s Medical Center. Lambrecht said Stevens, who was CEO for nearly two decades before Robertson, built a “very strong base of providers and the foundations for a system, and that’s not an easy thing to do.” He sees the task ahead as finding the right balance of smart evolution.

“Now it’s time to make the adjustments, from a standpoint of finding efficiencies: electronic health records, supplies, pharmacies, all those boring things that really do keep costs down and most importantly provide access for patients,” he said.

Lambrecht said identifying and implementing efficiencies is more straightforward within an organization the size of KRH, which he said is a $600 million operation. He acknowledges that figure might sound large to a lot of people, but it’s not in the broader context of health care.

“There’s this perception that KRH is the big behemoth, and yeah, we are the largest employer,” he said. “But in the scalability of health care across the country, we’re pretty small. We’ve got to figure out those efficiencies and be nimble, which we can do based on our size and our service area.”

A number of other major hospitals in Montana cities are under the umbrella of larger multi-state health care entities, and Lambrecht says he faced questions at the forums over whether KRH planned to merge with Sanford Health, his former employer and the nation’s largest rural nonprofit health care system covering multiple states.

Even as forum attendees shared their “fears, frustrations and emotion,” Lambrecht said, “what I heard in a resounding way is that we’re committed to patient care and we want to remain independent.”

“It’s going to take a lot of work to remain independent, and I’m extremely optimistic that we’re going to do that because that’s clearly the passion,” he said.

Lambrecht and his wife have five kids and own a home in Big Sky, and the family cattle ranch in southeastern Montana is still operating. He says he’s most comfortable in a rural state and looks forward to laying down roots in the valley. As for his first priority on the job, he sums it up in one word: “culture.”

“Building the confidence back with employees that, one, they have a voice and, two, there’s a path forward; there’s some stability in leadership,” he said. “God willing, something doesn’t happen to me, I’m not a fly-by-night guy … I’m committed to this job and I really don’t have plans to go anywhere else, so hopefully there will not be executive leadership turnover.”

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