Acute Care Alberta extends contract with private surgery clinic at centre of conflict of interest probes

The Alberta agency overseeing acute care has granted a six-month contract extension to a private surgical clinic whose previous provincial government contracts are the subject of several ongoing probes.

In a $1.7-million wrongful dismissal lawsuit filed in February, ousted former Alberta Health Services CEO Athana Mentzelopoulos alleges she received political pressure to renew contracts with chartered surgical facilities (CSFs) that she believed were overpriced. Her lawsuit alleges she had been fired after launching an investigation into various contracts with links to government officials.

Alberta's auditor general, AHS and a retired Manitoba judge appointed by the province are among the agencies investigating the province's health procurement and contracting processes.

Mentzelopoulos raised concerns about several issues with different contracts, including a orthopedic surgery contract signed with an Edmonton-based company, Alberta Surgical Group (ASG). She alleges AHS was paying higher rates per procedure compared to other vendors.

Alberta Health Minister Adriana LaGrange and AHS have filed statements of defence in the Court of King's Bench, denying the allegations. They said Mentzelopoulos was fixated on suspicions of wrongdoing, and standing in the way of the government's plan to restructure Alberta's health system.

Mentzelopoulos has refuted these claims. 

Neither Alberta Surgical Group, nor any of the company's owners, responded to requests for comment about the contract extension on Wednesday. The company has previously denied any conflicts or wrongdoing.

Health minister says Edmonton needs surgical capacity

When the allegations became public in February, an AHS spokesperson said the authority had paused the awarding of surgical contracts under review, then later clarified that the pause was limited to "new surgical contracts."

ASG was under contract from Nov.1, 2022, to April 30, 2025, to perform orthopedic surgeries in the Edmonton area. The maximum value of the contract for the entire time period is listed at about $70.5 million, but details of each procedure's cost are redacted from the publicly posted agreement.

On April 1, the government transferred the authority to sign surgical contracts over to the new Acute Care Alberta agency, which will be responsible for overseeing hospital-based care and CSFs in the province.

On Monday, LaGrange's press secretary said Acute Care Alberta had extended ASG's contract for six months.

In the legislature on Tuesday, Premier Danielle Smith said the many ongoing investigations had delayed the startup of a new private surgical centre scheduled to open on the Enoch Cree Nation, just west of Edmonton.

"We're not going to cancel thousands of surgeries for hip and knee replacements," she said.

LaGrange told reporters Wednesday the Enoch facility had already won a bid to provide surgeries in the Edmonton area once it was up and running, which it is expected to be in 2026.

Her press secretary said in a statement that extending the contract with ASG for six months gives Acute Care Alberta time to finish contract negotiations with Enoch, and allows retired Manitoba Justice Raymond Wyant's government-ordered investigation to conclude.

LaGrange said Wednesday the province needs to keep thousands of surgeries going at ASG to tackle the long wait times for orthopedic procedures.

"While we are completing over 60 per cent [of surgeries] in clinically approved times, we want that number to get to 100 per cent," she said.

Cost of contract extension not public

The details of the contract aren't yet public. AHS has posted copies of previous CSF contracts online, including details such as the estimated total cost, and the maximum cost the vendor can charge for services.

Neither LaGrange nor Acute Care Alberta would say how much the contract is for, the cost per procedure, or the volume and type of procedures ASG is expected to perform.

Acute Care Alberta spokesperson Holly Budd said a version of the contract will be posted publicly once it is "fully executed."

LaGrange said Alberta is moving to a health funding model where service providers are paid based on the volume of work they do partly to shed more light on the cost of care.

NDP health critic Sarah Hoffman told reporters Wednesday it is "completely inappropriate" for a provincial agency to extend a contract with ASG while so many related investigations are underway. Hoffman said health agencies had time to formulate a backup plan to provide surgeries elsewhere.

"We have hospital operating rooms that aren't working full capacity. They could staff up and properly move forward with public health care, but they're choosing to continue full speed ahead at privatization, and that's wrong," she said.

While criticizing public hospitals' ability to complete more surgeries, the government has also made it more difficult for AHS to do procedures, Hoffman said,  including an unwillingness to pay for overnight coverage for patients to have joint replacement surgeries at the Royal Alexandra Hospital's Orthopedic Surgical Centre.

Keeping secret the details of the contracts also fosters public distrust, Hoffman said.