Two Alberta private surgery clinic contracts in limbo amid allegations in scandal

EDMONTON — Alberta’s health ministry says two proposed private surgery clinics at the centre of allegations of high-level government corruption remain in limbo.

“At this time, no agreements have been finalized for facilities in Red Deer or Lethbridge,” Jessi Rampton, press secretary to Health Minister Adriana LaGrange, said in an email this week.

“Alberta’s government is working to determine next steps and we will provide an update at a later date.”

Questions remain over who will operate the clinics. In November, an Alberta Health Services spokesperson said a service provider had been chosen, but Rampton did not identify it this week.

The sites, first proposed in 2022, would perform surgeries for patients under Alberta’s public health plan as part of government efforts to reduce wait lists.

Athana Mentzelopoulos was tasked with getting shovels in the ground when she took over as head of Alberta Health Services in December 2023. The agency has been in charge of delivering front-line care across the province but is being broken up into four agencies as part of a health system overhaul.

Mentzelopoulos, who held the job for over a year, was fired in January and this week launched a wrongful dismissal suit against the province and LaGrange, alleging she was pressured to sign off on contracts for the sites despite concerns over costs and confusion over their ownership.

She also alleges she was being pressured to extend a contract with another service provider, Alberta Surgical Group, despite her concerns that the province was overpaying.

The allegations have not been tested in court. LaGrange has said most of the accusations are false and she plans to file a statement of defence. The government and Alberta’s auditor general are now investigating.

In her statement of claim, Mentzelopoulos said pressure came from Marshall Smith, Premier Danielle Smith’s then-chief of staff, to extend the deal with Alberta Surgical Group and sign off on the two new surgical facilities.

The statement of claim said Marshall Smith told Mentzelopoulos the backers of the facilities were “serious businessmen” unhappy with the delay. He ended one call, the claim alleges, by telling her not to “mess with them.”

Marshall Smith, who left government in October, has called the claims “outrageous and false” and says he’s eager to work with the auditor general investigation.

The statement of claim says pressure also came from LaGrange’s ministry. It said last December, a staffer told Mentzelopoulos the companies looking to operate in Red Deer and Lethbridge “were calling every day” and that LaGrange wanted the contracts signed within a week.

The pressure, said Mentzelopoulos, came as she balked at signing any of the deals for the clinics because she was worried about what was being paid out and who would get the money.

The claim says Mentzelopoulos determined the rates being paid to the Alberta Surgical Group were much higher than other facilities under contract to AHS and that the company was being paid for services that “we know has not been required,” such as providing two overnight stays for patients after surgery.

Alberta Surgical Group did not answer a request for comment but has rejected the accusations.

The unidentified service providers chosen for Red Deer and Lethbridge were demanding the same excessive pay rates, the lawsuit alleges.

Mentzelopoulos also said something was not adding up when record checks were done on the Red Deer and Lethbridge clinics and that it couldn’t be determined who had a 12 per cent ownership stake in the projects.

The claim says that as of Jan. 8, the day Mentzelopoulos was fired, AHS still didn’t know who owned that stake as the health ministry had vetoed a letter she wanted to send to the company to address outstanding questions.

Mentzelopoulos’s statement says matters came to a head in October 2024 when LaGrange stripped Mentzelopoulos of her authority over contract negotiations and put the health ministry in charge.

That directive also set pay rates for the private surgery facilities, which Mentzelopoulos alleges were again overpriced compared with other contracts and “would lead to significantly increased costs to AHS — and potentially hundreds of millions in profits for the (surgical facility) owners.”

The Opposition NDP is calling for LaGrange to be dismissed as health minister, but the premier has said she stands by her.

This report by The Canadian Press was first published Feb. 14, 2024

Jack Farrell, The Canadian Press