Hospice defends software deal

LARGO - Hospice of the Florida Suncoast wanted to be a market leader, and not just in end-of-life care. It wanted to sell software to help hospices across the nation improve their operations. To do that, hospice president Mary Labyak said, the nonprofit loaned $1.9-million in donated money to its for-profit software company in 2001, calling it an investment in hospice's financial future. Documents and interviews show the money was used to buy out a Louisiana corporation that worked with hospice to develop software. The company is headed by the son of Labyak's friend Jo-Ann Mueller. The closeness of the friendship is disputed. Hospice says the two aren't close friends. If they are, a lawyer suing hospice for the misuse of donor money says, it's inappropriate for hospice to have done business with the company. "I think it's questionable," said attorney Jonathan Alpert. "We have some significant issues that donors and the community have a right to know." As hospice officials fielded questions Friday about both the friendship and hospice documents obtained by the St. Petersburg Times, hospice lawyers filed court papers accusing Alpert's client of releasing confidential patient information. Hospice says Fluffy Cazalas, a former hospice information technology worker, unlawfully obtained and sent confidential materials to three people before she quit in 2002. None of the allegations involve the Times. The court motion seeks to keep Cazalas from releasing anything else, or destroying anything. Cazalas denied the allegations. "A lot of accusations are being made against hospice that I think are false or, at best, exaggerated," said hospice lawyer John Campbell. "A great disservice is being done to the community." Alpert said the motion was "an attempt to plug leaks, not fix their problems." In 1997, hospice began working with a New Orleans company, Benedict Kearns Inc., to develop software that did it all,from tracking billsto listing patient medications. By 2001, hospice had decided to buy out Benedict Kearns, which owned a 40 percent share of hospice's software company, Suncoast Solutions. In June 2001, hospice paid $1.48-million to Benedict Kearns, whose president is Mueller's son, Mark Mueller. Another $413,043 was payable to the company in installments over five years. The price was $300,000 below the appraised value for that 40 percent share, hospice records show. For a time, payroll records show, Mark Mueller also collected a salary of about $2,500 a week. A sales contract notes that Jo-Ann Mueller, who could not be reached for comment, worked as a paid consultant for SuncoastSolutions before and for a short time after the sale. Her salary is not listed. Mark Mueller said that his mother and Labyak are good friends. But he said the friendship was based on business associations. His mother formerly operated a hospice in New Orleans. Cazalas said most Hospice of the Florida Suncoast employees know Labyak and Mueller are good friends who vacation together. Hospice denied this. Mike Bell, a hospice spokesman, said Mark Mueller's company was the best qualified to do work for hospice because it was one of the first to develop such software. Jo-Ann Mueller and Labyak, he said, have worked together professionally. "It's a professional relationship," he said. Many in the New Orleans hospice community know Jo-Ann Mueller. Beth Langlois, human resource director for Odyssey Healthcare in the city, said Labyak and Mueller are "friends. They're very good friends." Frank Rutter, who heads Odyssey Healthcare, said the two women know each other through business associations. He said, "I know they're good friends." The president of a nonprofit charity watchdog said there is nothing improper about a nonprofit steering business to a friend's company as long as the company is qualified. "It isn't awful, as long as it's handled in an upright manner and they can justify it," said Daniel Borochoff, president of the American Institute of Philanthropy. "But charities have to be concerned about even the appearance of conflicts of interest. Appearances can make it hazy for donors."