On August 31, 2015, the United States District Court for the District of New Mexico issued a 91-page Memorandum Opinion and Order ruling that the Indian Health Service (“IHS”) violated federal law, the Indian Self-Determination and Education Assistance Act (“ISDEA”), when it declined to extend and fully fund Sage Hospital’s contract proposals through September 30, 2017. Sage’s legal positions were fully vindicated in the Court’s decision. The court scheduled a hearing in April 2016 to determine Sage’s damages caused by IHS’s unlawful actions.
On page 82 of the Opinion, the District Court specifically determined that nothing in a report produced for IHS by the accounting firm of Moss Adams provided any justification for IHS’s refusal to contract. That report was used in large part to attack Sage’s Board of Directors. The Court determined that IHS merely attached “conclusory statements” to concerns identified by Moss Adams, and the Court found “no evidence to support these statements” and that the Moss Adams report “contains no findings that Sage Hospital violated federal law.” As the Court found, even the author of the Moss Adams report “did not offer any information to suggest that Sage Hospital violated any federal laws or ISDEA financial management guidelines.”
The Court specifically credited the sworn testimony of Council Delegates Alton Joe Shepherd, Kee Allen Begay, Jr., Raymond Smith, Jr. and Lee Jack, Sr., in the decision. All throughout this litigation, Sage has continued to provide what the Court observed was “exemplary” care to its patients and has not laid off any of its over 200 employees. Sage will continue to provide quality services to its patients and Chapter communities, provide employment opportunities for Navajo community members, and work with the Chapters, the Navajo Nation, and the IHS to improve and expand health care services for the benefit of the Navajo People. The Sage Board of Directors and Administration would like to extend thanks to the many people who have maintained their faith and trust in Sage, and again express our heartfelt appreciation to its employees, community members, patients, and their families, and also a special thanks to Delegates Shepherd, Begay, Smith, and Jack, and other officials who have continued to support Sage during this regrettable controversy.
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“We humbly thank our patient communities and tribal leaders who have supported us during difficult times, and are proud of our strategic Board, professional management company, and dedicated staff. The Indian Health Service is a vital stakeholder in assisting us to continue to provide quality healthcare for our people. It is time for all of us to move forward together,” stated Board Chairperson Stenson Wauneka.