Cardiologist Richard Zelman dismisses his lawsuit against Cape Cod Healthcare, CEO

HYANNIS — Former Cape Cod Hospital cardiologist Richard Zelman has ended his high-profile lawsuit against the hospital and its CEO. In the lawsuit, Zelman alleged he was fired for blowing the whistle on hospital practices he saw as prioritizing profit over patient care.

On Jan. 25, Zelman, who also ran the cardiology department at the hospital, filed a notice to dismiss the lawsuit without prejudice, according to Barnstable Superior Court records. The lawsuit was originally filed on Dec. 6.

In an interview at the Times office on Tuesday, Michael Lauf, who is president and CEO of Cape Cod Healthcare and CEO of the hospital, vehemently denied the allegations in Zelman's lawsuit.

"I took no satisfaction at all when it was dismissed because the reputational harm really, personally had already been done," Lauf said.

He found out the suit was dismissed on Friday when his chief legal counsel called him.

"I can honestly say I don't know what led to it being filed in the first place. And I certainly don't know why it was dismissed," he said, adding Cape Cod Healthcare's lawyer anticipates the suit will be refiled. "Because nothing about this has been easy to this point. So why would we expect anything but the unexpected?"

David Brody, Zelman's lawyer, did not respond to a request for comment from the Times on Monday. On Tuesday, Zelman did not respond to phone calls or an email seeking comment; and Judy Rakowsky, managing director for communications firm Liberty Square Group that represented Zelman when the lawsuit was filed, also could not be reached.

What was Richard Zelman's lawsuit against Cape Cod Healthcare about?

Cape Cod Healthcare, based in Hyannis, operates two acute care hospitals, Cape Cod Hospital and Falmouth Hospital, along with a homecare and hospice agency, a skilled nursing and rehabilitation facility, an assisted living facility and a number of health programs. The nonprofit employs 450 physicians, according to its website.

Zelman, 64, is an interventional cardiologist who has been affiliated with Cape Cod Hospital since 1990. He was hired full-time in 2006 and became the medical director of the hospital’s Heart and Vascular Institute in 2018.

Zelman claims he was fired on Sept. 30 because he blew the whistle on hospital practices, according to the lawsuit. But Lauf said Zelman was never fired and that his contract was instead not renewed.

"There were many twists and turns with a negotiation," Lauf said. At the end of the day, it was just time to move without Zelman, he said.

The lawsuit states that in 2019, Lauf didn’t allow patients with Medicare or Medicaid insurance to use “Sentinel Devices,” instead prioritizing patients whose insurance reimbursed the hospital at higher rates. Sentinel Devices filter out stroke-causing debris during a transcatheter aortic valve replacement, according to the lawsuit.

Although Lauf eventually conceded to Zelman’s concerns, the lawsuit says, Zelman faced retaliation for his actions including an investigation into his performance.

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"Patently false," said Lauf, of the allegations. "And we look forward to supplying the data. And there's a paper trail and we look forward to supplying that to the court."

Lauf said the hospital is not currently planning to sue Zelman, saying "our whole goal is to take care of our community."

What was the relationship between Lauf and Zelman?

Lauf has held his position at Cape Cod Healthcare since 2010. He said he thought his relationship with Zelman started out rocky early on, saying he "was the new CEO that I think he was testing."

"Then, I think it got really good for the next 10, 11, years," said Lauf. "Then three years ago, it just turned sideways via him and it was never salvageable after that."

Lauf said he thinks his "audacity to ask questions" sparked the change, specifically about the efficacy of Sentinel Devices and what others in the industry were doing.

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Zelman was hired to lead the integration of cardiac services at Cape Cod Hospital until Lauf said he was "forced to make changes based on his (Zelman's) behavior." Zelman was in charge until about a year and a half ago, Lauf said.

"There is not one person in our organization that refutes that Dr. Zelman is an incredible clinician," he said. "He is but a lot of the liberties that he took in that lawsuit we plan on defending vigorously."

After filing the lawsuit, Zelman retained the ability to perform medical procedures in the hospital as part of his private practice. But he was informed on Dec. 21 that those privileges had been suspended. Lauf said he was not involved in that decision made by Cape Cod Hospital medical staff.

"We certainly made it easy for him to continue to practice medicine there. We changed the rules that he had created in the Cath (Catheterization) lab that limited the credential access for other providers," Lauf said. "We relaxed those rules so he could stay as an independent physician and made our staff completely available to him."

Zelman retains privileges at Beth Israel Deaconess Plymouth and St. Elizabeth’s Medical Center in Boston. He is also applying for privileges at Beth Israel Deaconess Medical Center in Boston.

25 physicians signed a letter in support of Lauf, Cape Cod Healthcare

Shortly after the lawsuit was filed, 25 physician members of Cape Cod Emergency Associates — nearly all the doctors in the emergency department besides two — signed a letter voicing support for Cape Cod Healthcare and Lauf.

More:Cape Cod Healthcare pays ex-CEO $3.2M since resignation

"We are cognizant that the excellent practice of medicine is a team game," reads the letter. "Our team at Cape Cod Hospital includes the Hospital's outstanding leader, Michael Lauf, his dedicated administrative staff, our phenomenal nurses, and our highly talented advanced practitioners, therapists, technicians, clerks, secretaries, housekeepers, support staff and physicians."

The letter was issued by Dr. Nate Rudman, the chief of emergency medicine and a member of Cape Cod Healthcare's Board of Trustees.

"There was a big mismatch between what was written in the paper and what our group experience was … we felt it was necessary to give our perspective on the safety and quality of the hospital," Rudman said in an interview before the lawsuit was dismissed.

Molly Malone, an emergency physician with Cape Cod Emergency Associates in Hyannis since graduating residency in 2018, said Lauf had previously told her and others that he "does not tell doctors how to doctor and that's exactly how we feel."

"He has never ever told us how to do our jobs or tried to form how our patient care is achieved," she said.

What are the details of the Zelman lawsuit?

According to the lawsuit, in 2021, Zelman reported two cardiac surgeons at the hospital had caused preventable patient deaths. This included three post-operative deaths on low-risk candidates who were supposed to have uncomplicated surgeries, a fourth patient died as a result of their life support tube, which was sutured in place by one of the surgeons, falling out during transport to another facility, according to the lawsuit.

Zelman took his concerns about the cardiac surgeons to Lauf and Chief Medical Officer Dr. William Agel, according to the lawsuit, but said they did not protect patients. The cardiac surgeons worked at Cape Cod Hospital but were employed by Brigham and Women’s Hospital so Lauf deferred to that hospital for oversight of the surgeons, according to the lawsuit.

Zelman claimed Lauf did not take action due to "the potential substantial lost revenue."

Brigham and Women's self-reported to the Centers for Medicare and Medicaid Services how its Cape Cod surgeons documented their participation in transcatheter aortic valve replacements with Zelman, according to the lawsuit.

The Boston hospital then refunded the Centers for Medicare and Medicaid Services for six years' worth of costs related to the procedure, raising the risk of Cape Cod Hospital also having to issue refunds, according to the lawsuit.

Zelman's suit said he was informed his employment would be terminated shortly after Cape Cod Hospital found out Brigham and Women’s Hospital would be refunding Centers for Medicare and Medicaid Services for procedures Zelman questioned and informed Lauf about, according to the lawsuit. However, Lauf was willing to allow Zelman to continue his employment if Zelman agreed to sign a contract that would force him to be silent on patient safety issues, but Zelman refused.

The hospital no longer has a contract with Brigham and Women's Hospital in Boston, which has partnered with Cape Cod Hospital’s open-heart program since its inception in 2002 and is now affiliated with Beth Israel Lahey Health since 2022.

Lauf said the hospital has not seen any wrongful death lawsuits related to these incidents and emphatically denied that the hospital values profit over people, saying he never heard such allegations during the pandemic.

"This has painted such a negative light over our organization over our community, over the employees that have grown from being nurses aides to physicians to the 16 people that we've hired in the past year that couldn't speak English … Our story is pretty damn remarkable. And it's been thrown to the curb by this lawsuit and we look forward to defending that," Lauf said.

Zane Razzaq writes about housing and real estate. Reach her at [email protected]. Follow her on Twitter @zanerazz.

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This article originally appeared on Cape Cod Times: Cape Cod Healthcare CEO defends practices as Zelman lawsuit ends