34 Employees Laid Off After Staffing Agency Ends Contracts With Vista Medical Center East Over Alleged Nonpayment

WAUKEGAN, Ill. — More than 30 employees have been laid off after a staffing agency ended its contracts with Vista Medical Center East in Waukegan, citing the hospital’s alleged failure to pay for services provided.

Precision Practice Management (PPM) initially suspended nearly all of its services at Vista Medical Center East, located at 1324 N. Sheridan Road, in late June, with the exception of emergency room registration services. The company also suspended services at Gateway Regional Medical Center in Granite City. Both hospitals are owned by American Healthcare Systems (AHS).

The suspension was initially described as temporary after the hospitals allegedly failed to provide payment for services rendered.

“As a result, we are unable to continue providing most staffing services at these facilities until this issue is resolved,” Precision Practice Management said in a message to employees. The company added that it had made “repeated efforts to resolve the matter.”

At the time, all employees except those assigned to emergency room registration were instructed not to report to work or perform any work-related duties until further notice.

PPM said it expected the suspension of services to last up to a week while operational and funding issues were addressed. The company also told employees it would continue paying affected workers during the temporary suspension and pledged to provide updates.

“We understand that this situation may create uncertainty, and we appreciate your patience, professionalism, and continued commitment during this time. Our goal is to keep everyone informed as we work through these challenges,” the company said.

However, Precision Practice Management Chief Executive Officer Mike Barnell later confirmed that the agreements with American Healthcare Systems had been terminated.

In a statement provided to Pulse Radio 96.1, Barnell said PPM had provided revenue cycle management services, including patient registration, scheduling, insurance verification, billing, and collections, to Vista Medical Center East and Gateway Regional Medical Center.

“PPM performed its services fully and in good faith but due to non-payment of fees for those services, PPM was left with no choice but to terminate the agreements with AHS,” Barnell said.

According to Barnell, revenue cycle management services officially ended on June 30.

“PPM deeply regrets the impact the loss of work at AHS has had on the dedicated employees who supported the two facilities,” Barnell said.

The affected workers had previously been employed directly by the hospitals before being transitioned to Precision Practice Management at the hospitals’ request in December.

The company said it issued 60-day notices to affected employees as required under Illinois law and notified the Illinois Department of Commerce and Economic Opportunity (IDCEO) and local officials. PPM also said it would provide recommendation letters and outplacement resources to assist employees with finding new jobs.

Documents obtained by Pulse Radio 96.1 show that 34 employees were affected by the layoffs, with a final separation date scheduled for August 30.

Earlier last month, Vista Health System Community Engagement and Marketing Director Deanna Cruz said Vista Medical Center East had not implemented employee layoffs.

“We continue to operate at full capacity, and our services remain fully available to the patients and communities we serve,” Cruz said.

When asked for additional information regarding Precision Practice Management’s decision and its potential impact on hospital operations, Vista Health System declined to comment.

It remains unclear whether any other vendors doing business with Vista Medical Center East have also suspended services over alleged nonpayment.

The developments come after the hospital experienced financial challenges earlier this year. In March and April, employees at Vista Medical Center East did not receive their paychecks on time on two separate occasions. Hospital officials said delayed payroll funding caused both incidents.

Additionally, a lienholder has initiated foreclosure proceedings seeking to take possession of Vista Medical Center East after the hospital allegedly failed to pay more than $2 million in property taxes.