Attorney General’s Office: North Country Healthcare breached its fiduciary duties, needs changes

After a monthslong review, the Charitable Trusts Unit concluded that North Country Healthcare, which operates three hospitals in rural northern New Hampshire, breached its fiduciary duties when it fired Weeks Medical Center President Michael Lee and recommended a set of corrective actions to regain community trust.

The Charitable Trusts Unit, an agency within the Attorney General’s Office that reviews hospital mergers, specifically cited North Country Healthcare for failing to recruit and appoint a full-time permanent replacement for Lee. It also lamented in its report that the move spurred a series of resignations “thereby calling into question the validity of a WMC board affirmative vote to substantially alter NCH’s governance structure.”

Lee declined to speak with the Bulletin for this story because he signed a non-disclosure agreement when he left the hospital system.

The Charitable Trusts Unit was reviewing a laundry list of complaints and allegations from an organized group of concerned patients. But it determined that, besides Lee’s termination, “CTU did not find legal violations as to the other issues reviewed.”

However, it did knock North Country Healthcare for what it described as a number of communications failures in the growing tensions with community members over recent months. The Charitable Trusts Unit announced an agreement it reached with North Country Healthcare requiring the hospital system to:

• cooperate with (and pay for) an independent board governance consultant selected by the attorney general to ensure it is abiding by the governing documents it adopted in 2016;
• provide all board members with annual training on their duties as board members;
• hold future listening sessions with the community, at minimum, on a quarterly basis;
• hold off on any board governance restructuring plans;
• and reimburse the Charitable Trusts Unit $75,000 for the cost of completing the review.

“We appreciate the thorough process undertaken by the New Hampshire Charitable Trust Unit, and for their findings in several key areas that our leadership team acted reasonably and appropriately on behalf of NCH and the communities we gratefully serve,” North Country Healthcare CEO Tom Mee said in a statement. “We are prepared to work diligently and collaboratively to pursue CTU’s recommended steps to address areas requiring attention.”

The conflict between community members and North Country Healthcare began with the firing of Dr. Elizabeth Cooley, a well-known doctor at Weeks Medical Center, the system’s Lancaster location. A group of area residents, including at least three former Weeks physicians, have written letters asking North Country Healthcare to reinstate her. The Concerned Patients Group began holding public meetings to express their broader frustrations with the direction the hospital was going under the health system.

High on the list of their complaints was the company’s decision to outsource its revenue cycle department to a Colorado-based firm, a move North Country Healthcare defended as standard within the industry. They also complained about high executive salaries, particularly CEO Tom Mee’s $725,000 annual pay (according to 2024 IRS tax filings). They also cited a lack of primary care physicians at the hospital; what they considered poor customer service; and Weeks Medical Center’s loss of independence since North Country Healthcare was formed in 2016 through the merger of several nonprofit hospitals in the region.

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The patients soon caught the attention of lawmakers and officials, and the Charitable Trusts Unit announced its review in November. North Country Healthcare responded by holding a series of listening sessions throughout the region.

“The community sessions were intended to invite community input,” Rebecca More, a member of the Concerned Patients Group and former board member at Weeks Medical Center, said. “That process was highly controlled by North Country Healthcare, and a good 30 minutes of the session involved North Country Healthcare management telling the community what they wanted them to hear, and the questions that were solicited were filtered through North Country Healthcare employees, so they were not sessions in which North Country Healthcare was listening, but rather sessions in which the community was forced to listen.”

Still, she commended the Charitable Trusts Unit for taking action.

“I am grateful to the attorney general’s Charitable Trust Unit for undertaking a comprehensive review of North Country Healthcare’s management and government governance practices,” More said. “The abrupt firing of former Weeks Medical Center President Michael Lee, without the assent of Weeks’ board of trustees, left patients in the North Country without community representation. The abrupt firing of Dr. Cooley further eroded healthcare resources for a vulnerable population.”

State Sen. David Rochefort, of Littleton, who served as a liaison between residents and the Charitable Trusts Unit during the review, said he feels the review “was thorough and fair.”

“Some of the things that were concerns, they dispelled the concerns,” he continued. “But there were issues there that came up that were big issues. I mean, they had a president of a facility that was fired inappropriately. It looks like for board governance, there needs to be some work following the bylaws. If the bylaws aren’t being followed, that trickles down into all aspects, so I think that overall, it shined a light on some areas for improvement.”

Earlier this year, Rochefort sponsored legislation that would have imposed an 18-month freeze on executive compensation at any hospital located in a distressed place-based economy — a designation that applies only to Coös County — that lays off more than 10 employees within a single department within six months. The bill, Senate Bill 664, targeted North Country Healthcare, which operates Coös County’s only hospitals. However, it died in the Senate. Asked whether he would re-introduce that bill in 2027, Rochefort said the Charitable Trusts Unit assuaged his concerns.

“I think for the community citizens that brought up these issues, it was never the intent to see the hospital fail,” he said. “Nobody wants to see the hospital fail, but our communities have grown accustomed, rightfully so, to a relationship with our hospitals, and I think that that relationship, that communication, maybe had broken down a little bit, and I think this is a good opportunity to right the ship and start anew, and go to restore some of the trust within the communities.”