Former Steward executive charged with obstruction

Staff Writer
Columbus CEO

The former chief operating officer of Boston's Steward Health Care System has been indicted by a Florida grand jury on a charge he obstructed a federal investigation into the national hospital chain where he previously worked.

An Oct. 3 indictment against Joshua S. Putter, 48, of Needham was unsealed Tuesday by a magistrate at the US District Court in Fort Myers, Fla., accusing him of destroying, altering, or falsifying records. The grand jury has been examining financial fraud allegations against Naples-based Health Management Associates, where Putter had been a high-ranking executive before joining Steward.

Putter was hired by Steward chief executive Ralph de la Torre in October 2011 to bring his management experience from a large for-profit health care system to Massachusetts, where Steward runs 10 community hospitals, a rehabilitation center, and a doctors network.

But in June, employees were told Putter was taking an indefinite leave from Steward for what were called personal reasons. Since then, he has left the company, a spokeswoman said.

''The announcement today focuses exclusively on Mr. Putter's previous employment with Health Management Associates and is completely unrelated to Steward Health Care," said Steward vice president Brooke Thurston. "Mr. Putter is no Âlonger employed by Steward Health Care."

Thurston also said "no other Steward employees who formerly worked for HMA are involved" in the ongoing federal investigations into Health Management Associates' financial and accounting practices.

Several Steward executives who Putter recruited during the past two years, including the presidents of four of its community hospitals, also came from Health Management Associates. One of those presidents, Daniel Knell, stepped down from the helm at Quincy Medical Center in July following a tense one-day strike by its nurses in April, and harsh findings from a state inspection in May that led to a temporary closure of the hospital's psychiatric ward.

One of Putter's lawyers, Lee Hollander of the Naples law firm Hollander & Hanuka, said his client surrendered Tuesday and pleaded not guilty before the federal magistrate, Judge Douglas Frazier, in Fort Myers. Putter was released after posting a $250,000 bond, according to Hollander. He said Putter is scheduled to appear at a Dec. 9 status conference before Judge John E. Steele at US District Court in Fort Myers.

A trial is scheduled for ÂJanuary. If convicted, Putter faces up to 20 years in federal prison, according to a Âstatement from acting US ÂAttorney A. Lee Bentley III.

The one-count indictment cites the "destruction, alteration, or falsification of records" from federal investigations on or about Oct. 7, 2008, when Putter was a division president at Health Management Associates. In a companion document, Bentley said his office is continuing to present evidence of related offenses to the grand jury. "A request from the grand jury for a superseding Âindictment to add additional charges is anticipated in the next 45 days," the US attorney's document said.

Putter's indictment by the US Department of Justice stems from an ongoing investigation of Health Management Associates by the Federal ÂBureau of Investigation, the US Office of Health and Human Services, and the US Office of Inspector General.

Separately, the national Âhospital chain disclosed in May that the Securities and ÂExchange Commission sought documents related to its Âaccounting, billing, and Ârevenue from privately insured patients as well as those Âinsured through Medicare and Medicaid, the government health insurance programs for senior citizens and low-income residents.

MaryAnn Hodge, a spokeswoman for Health Management Associates, said in a statement Tuesday that the company had just been notified about the unsealed indictment. "Health Management has been cooperating with 1/8the3/8 inquiry for more than two years and will continue to do so," she said.

Health Management ÂAssociates agreed in July to be acquired by another for-profit hospital company, Community Health Systems Inc., based in Franklin, Tenn., for about $7.6 billion.