New York hospital leaders face $500M class-action lawsuit

Maimonides Medical Center in New York City is facing a $500 million dollar class-action lawsuit alleging hospital leaders and trustees diverted resources from the hospital to benefit themselves, according to a press release from Morrison Cohen, the law firm representing the plaintiffs.

The lawsuit alleges a "culture of self-dealing" at the hospital diverted funds for management salaries, contracts for companies owned by trustees, and donations to trustee-affiliated charities, according to the press release. The lawsuit states Ken Gibbs, a former banker who was named CEO of the hospital in 2016, allegedly saw his salary triple from 2016 to 2020 while the hospital's financial situation deteriorated to near bankruptcy, according to a PricewaterhouseCoopers audit.

A statement from Maimonides Medical Center addressed claims in the lawsuit.

“We take all patient concerns seriously and are proud of Maimonides’ long standing track record of community service and clinical excellence for which we are recognized by independent organizations. Unfortunately, this lawsuit contains the same discredited arguments and malicious personal attacks that the so-called Save Maimonides campaign has been recklessly hurling for nearly a year, dressed up now in legal jargon," according to a statement from the hospital sent to Becker's.

Over the last year, an anonymous source has funded a $1 million campaign to point out the negative statistics and experiences patients claim to have at Maimonides in an effort to push out current leadership. The lawsuit also calls for new trustees for the hospital.

Maimonides plans to defend the institution.

"Those who understand Maimonides and the type of challenges it faces as a safety net institution – physicians, community leaders, elected officials, and our labor partners 1199-SEIU, NYSNA, and CIR – see this campaign for what it is and have all publicly opposed it. We will defend the institution against these baseless allegations if we must, but we will continue to keep our focus squarely on providing the highest quality services for the hundreds of thousands of Brooklynites who trust Maimonides with their care," according to the statement.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars