Embattled Redbanks Board Paid Six-Figures Over the Past Three Years

By JORDAN VANDENBERGE | jvandenberge@tristatehomepage.com

Published 08/21 2014 06:28PM

Updated 08/21 2014 06:39PM

Eyewitness News has learned board members for Henderson County Health Care Corp., the parent company of Red Banks Skilled Nursing Center, were paid for serving on the board. According to the non-profit's federal tax returns, board members received more than $200,000 over the past three years. This policy comes despite many non-profits not paying their board members.

On August 13th, it was revealed that Chumbler was no longer working at the facility. The previous week, it was announced that two board members, Joan Hoffman and Doug Bell had resigned. In a statement, their decision to resign "stemmed from a long standing concern over the manner in which the board conducted its business."

Earlier this week, Eyewitness News obtained a scathing, independent audit of the company's practices that was commissioned at Chumbler's request.

"Simply put, Redbanks Skilled Nursing Center was a HIPAA compliance disaster," the audit stated. "This organization was at HIGH risk." The audit further alleges that active medical records were not kept in a locked area. Ever since then, the sprawling campus has been enveloped in controversy.

Board members for Redbanks' parent company, Henderson Health Care Corp., receive $500 per meeting, according to sources who spoke on the condition of anomynity. According to federal tax returns obtained by Eyewitness News, the seven board members presiding over the parent organization collectively received more than $157,000 over the past three years. In addition to that sum, board members also collected nearly $50,000 the past two fiscal years for serving on the board of Red Banks Colonial Terrace, an affiliated but legally separate entity.

Despite working an average of two hours a week, each board member was paid $8500 total in 2011, according to the federal tax return. Director Frank Chamberlain was paid more than $10,000, according to the federal tax return. Furthermore, each board member was paid at least $6000 in fiscal 2012 and at least $6500 in fiscal 2013. In those years, board members worked an average of two hours per week. Board members would typically meet monthly, although special meetings were often called.

Tim Williams, the board chairman, defended the practice of paying board members.

"Redbanks is a private business and operates within the norms of our industry when it comes to our board of directors, staff, and vendors. Any assertions to the contrary are false," Williams said in a statement. "Our mission is to provide excellent care to our residents, something we do very well. The policy of making nominal payments to board members dates back more than 30 years when the decision was made by previous leadership to encourage the organization to have a working board."
The tax returns also raise more questions prompted by an independent audit presented to the board in December 2013. The audit was apparently commissioned by former executive director Mark Chumbler. After the Aug. 13th board meeting, it was announced that Chumbler was no longer an employee of Redbanks. However, no one has definitively said whether Chumbler was fired or whether he voluntarily resigned.

Among other things, the auditors raised questions over the company's contracts. The auditors apparently found that a majority of the company's major contracts traced back to the owners of Wells Health Systems, an Owensboro-based nursing consulting firm. The company was paid around $123,000 in fiscal 2012. In fiscal 2013, the company was paid almost $176,000. During that time, Greg Wells, the company's vice president of operations, served as Redbanks' interim director.

That $176,000 sum is significantly more than Chumbler was paid, according to federal tax returns. On June 30th, according to sources, Chumbler dismissed Wells Health Systems for 'poor performance.' On Aug. 13th, Chumbler departed from Redbanks. That same day, it was announced that Wells Health Systems was again working for Redbanks, according to sources.

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