Serious Allegations Against NorCal Hospital

SEBASTOPOL, Calif. (CN) — A Sonoma County hospital fired its CFO for blowing the whistle on the chairman of the board, who profited from a "seriously defective" medical records system that endangers patients, the former CFO claims in court.

Former CFO Douglas Goldfarb claims Sonoma West Medical Center fired him after he told hospital officials that Chairman of the Board Dan Smith insisted on using a "seriously defective" electronic medical records system designed by Smith's company, OffSite Care Resources.

At $84,500 a month, the system was far more expensive than better ones that were available, Goldfarb says. He adds: "SWMC has been essentially controlled by multimillionaire businessman Dan Smith, who seeks to use SWMC as a vehicle for self-dealing in service of his own personal financial interests and the financial interests of his businesses."

Sonoma West Medical Center is the only defendant in the Aug. 1 lawsuit in Sonoma County Court.

Goldfarb claims, among other things, that the defective HarmoniMD system "intermingles" patient records, "so one patient's medications would show up on another patient's records;" that new medications repeatedly "disappear(ed) from patient records;" that newly prescribed medications are not updated unless a nurse refreshes the system; and that the system "once reverted time back to the 1900s," causing patients to miss their antibiotics for more than a day.

"It's a miracle people haven't died," Goldfarb's attorney Daniel Bartley said in an interview. "It could be that people have died but we don't know it, because of the medical records software."

Former Sonoma West CEO Ray Hino told the Santa Rosa Press Democrat in June that the system has never harmed a patient and does not endanger patient health.

Representatives for Smith and Sonoma West did not return requests for comment on Wednesday.

Goldfarb says he confronted Smith at a May meeting with department heads, telling them about the problems with the HarmoniMD software that medical staff had disclosed to him. At the meeting, he says, he questioned Smith's "conflict of interest" in installing his company's software at Sonoma West, but Smith refused to allow him to renegotiate a cheaper contract or hire a different vendor.

Attorney Bartley said in the interview that Smith has introduced HarmoniMD into hospitals in developing countries and is using Sonoma West as a "launching pad" into the U.S. market.

According to HarmoniMD's website, the system is used in a hospital in Tanzania.

"That's the big objective here," Bartley said. "He's going to make tens of millions of dollars if he gets it into hospitals in the U.S."

The complaint states: "(I)f HarmoniMD, which is being beta-tested at SWMC, becomes functional, Dan Smith and his companies prosper financially."

Goldfarb also claims that Smith tried to force him to juggle the books.

"As CFO, I was expected to tolerate, and participate in, accounting and recordkeeping practices that absolutely did not comply with GAAP ('generally accepted accounting practices')," Goldfarb says. (Parentheses in complaint.)

He adds: "Smith attempted to coerce me to understate contractual adjustments to reflect a break-even or positive operating profit and/or losses. Smith ardently attempted to have me falsely portray the hospital as having a positive operating profit."

Goldfarb says HarmoniMD's flaws delayed patient billing so severely that the hospital lost money.

The lawsuit comes two months after Sonoma West defaulted on more than $6 million in loans, which may force the 37-bed hospital shut its doors, according to the North Bay Business Journal.

Goldfarb's complaint mirrors a June 1 lawsuit in the same court from former chief nursing officer Autumn AnDra, who sued the hospital and Smith. According to the Courthouse News same-day summary of that complaint: "Defendant Daniel Dimitrov Smith engineered plaintiff's firing from her job as Chief Nursing Officer at defendant Sonoma West Medical after she voiced concerns about the use of a defective electronic records system, the misuse of money for management salaries instead of more medical staff, and the endangerment of patient safety."

Goldfarb says the hospital has gone through three chief nursing officers, three CFOs and four nurse managers in the past 14 months. Hino resigned in July.

"This fellow has fired countless people who have stood up to him," Bartley said. "A lot of people are very fearful of him."

Goldfarb seeks statutory and punitive damages for discrimination, harassment, retaliation, wrongful firing and violations of the California Health and Safety Code.Bartley, of Campbell, Calif., also represents AnDra

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