Graybill, Palomar Health Medical Group, point fingers at each other as Graybill exits - Escondido Times-Advocate

Friday morning Sept. 27, Graybill Medical Group Inc. announced plans to terminate its managed services agreement with Palomar Health Medical Group (PHMG). This break comes after what Graybill says was PHMG’s inadequate response to a cyber-attack that disabled communication for several months beginning in May.

PHMG responded that it will evict Graybill from its San Diego County locations, including several campuses in Escondido.

The two medical groups are pointing fingers at each other—with PHMG saying that Graybill is as much at fault for the breakdown in services following the cyber-attack— whose repercussions are still felt five months later.

Graybill is a multi-specialty medical group that has served North County San Diego and South Riverside County communities for nearly a century. Graybill employs over 100 physicians and advanced practice providers, serves over 70,000 patients and accommodates more than 175,000 patient visits annually.

The cyber breach “severely impacted its operational capabilities, leaving healthcare professionals, patients, and staff with limited access to essential phones, computers, and patient records for over four months,” said a statement from Graybill.

The newspaper Monday morning interviewed Dr. Vanessa Peters, a family physician who is Chief Physician Officer for Graybill.

We asked how Graybill feels that Palomar Health let it down? What could it have done differently?

Dr. Peters replied, “The cyber-attack we felt was not managed well. May 5 was the day we went down, we are now five months down. While they say we are ‘fully restored,’ we are really only about ninety percent restored. Mammograms are not restored. We can’t schedule or do mammograms at all. Radiology went down, and there is still an issue with its software. Some phones are not fully restored. Fax lines in and out are not working 100 percent.”

Dr. Peters added, “That’s not the service we want to provide. We feel that the organization is not well managed and this is an example. We would like to provide top notch service as we have for 100 years.”

The full “fallout” from the cyber-attack is not yet known, said Dr. Peters. “We don’t know who has been missed, and who has breast cancer. There is a potential for death. I have a patient that had a heart attack who was caught up in this attack. Fortunately she survived.”

The eviction was announced while negotiations were still underway, claims Dr. Peters. Graybill had announced its intentions to leave the managed services agreement on August 12. It received the eviction announcement September 10.

“We had been in discussions that we thought were amicable. We had hopes of having a joint statement that we were working together amicably but they chose to take a different tack,” said Dr. Peters. They were, she said, given about to months’ notice to leave their buildings.

All doors appear to be closed to further negotiations, she said. “Right now my attempts to talk to them regarding the electronics health records—there has been no reply.”

Contrary to some reports, PHMG has not sued Graybill. It has threatened to enforce the five year noncompete agreement that has a year left on it, said Dr. Peters.

Meanwhile, Graybill is in talks with Sharp Medical Group (aka METIS). “We’ve been partners with them for 25 years, a partnership which we had before we had the one with PHMG.”

Such an agreement would allow patients to continue to see their current physicians and access Palomar Health and the Palomar Health specialists as they do today.

Because of the eviction, Graybill is looking at renting local medical offices. “We have nine offices. Two are outside of the Palomar district,” said Dr. Peters. “The other seven locations need to move. We are working on getting leases in the local area. Some are in Escondido.”

There is a common misperception that Graybill owns the buildings it operates in. “We don’t own the buildings, we lease them,” Peters said. “The leases —which had been held for many years by Sharp, were transferred to PHMG in 2020. “Upon departure we were hopeful we could purchase our equipment back. That is common practice. We were hoping they would transfer back to METIS (Sharp) But they have refused to assign the leases back.”

She concluded, “It feels like we are playing a game of chicken. We now have six weeks to move. They said they plan to backfill us with new doctors, but we are not sure where they would get fifty primary care physicians. So those buildings are likely to remain empty and they would continue to pay rent for them with taxpayer money.”

She added, “And as we get closer to the deadline, they might not be able to back out of things in time.”

Graybill asserts these decisions were made unilaterally by PHMG, and the physicians replacing the Graybill doctors would be hired without consulting patients or their families. In its press release Graybill states, “The patients affected by this transition will be assigned to new providers under their insurance plans without any consideration of their established relationships with their longtime physicians or the potential disruption to their ongoing medical care.”

“Palomar Health Medical Group’s decision to evict our physicians and transfer our patients to providers they have no relationship with is a direct affront to the trust and well-being of the patients we have served for decades” said Dr. Boyatt, a spokesman for Graybill. “This move jeopardizes the quality of care and dismisses the importance of patient-physician relationships, not to mention continuity of care. We are talking about people’s lives, and they deserve better.”

Palomar Health Medical Group disagrees

As might be expected, Palomar Health Medical Group (PHMG) doesn’t see the situation in the same light as Graybill. In a statement Monday, PHMG declared, “Graybill refers to a recent data security incident as a supposed force majeure event. PHMG strongly disputes Graybill’s allegations about the incident and PHMG’s response to it. Graybill attempts to distance itself from the consequences of the data security incident, despite one of Graybill’s key leaders serving as the Chief Medical Information Officer of PHMG prior to and during the incident. While PHMG has continually employed its best efforts to promote Graybill’s success and integration, Graybill is now using the data security incident to exit from a partnership this group has been uncooperative with since its acquisition in December 2020.”

The statement adds, “Through its ongoing cybersecurity protocols, PHMG promptly detected and contained the incident when it occurred. PHMG then launched a thorough and privileged investigation that remains ongoing to determine the scope and nature of the incident. PHMG also notified its patients and partners about the effect on operations, including that access to some systems used for patient appointment scheduling were temporarily interrupted.”

Palomar Health Medical Group’s interim Chief Executive Officer Russ Riehl declared, “After PHMG identified the issue, we acted decisively to secure our network and safeguard all patient information. He added, “Our top priority has been and continues to be the safety and security of our patients.”

The statement added, “PHMG’s leadership is actively working to ensure that the separation from Graybill does not impact patient care and that all physicians who choose to stay are supported throughout this transition. Graybill physicians who may be uncertain about their future are welcome to engage in open dialogue with PHMG leadership should they choose to. Like them, we want to ensure that they can make the best decision for themselves and maintain continuity of care for their patients.”

PHMG says it is offering every Graybill doctor the chance to stay and practice within its system. “There has been no eviction of any doctors, and we remain hopeful that those considering leaving will reach out to explore how they can continue working together with us here at PHMG.”

I have lived in Escondido for 22 years, and have been a patient at Greybill for 22 years. My family and I have had nothing but a wonderful experience with our doctors, whether they be Family Practice (Peters and Tordilla), Pediatrics (Jacobs) or a specialist (Brummel) until this year. It’s been a disaster. We will continue to use Greybill and their amazing team, and look forward to seeing them at their new location.

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