Athana Mentzelopoulos claims she was fired for reviewing 'overpriced' contracts
The former CEO of Alberta Health Services (AHS) has launched a $1.7-million wrongful dismissal lawsuit, alleging she was terminated after investigating potentially inflated contracts with private surgical providers that she claims had ties to government officials.
Athana Mentzelopoulos, who led AHS until January, claims her dismissal was politically motivated and came after she refused to halt investigations into these contracts, according to a CBC report.
According to the lawsuit, Mentzelopoulos had been reviewing a contract with Alberta Surgical Group (ASG), a private Edmonton-based clinic, which was set for renewal. She alleges that ASG was overbilling AHS by nearly $3.5 million while failing to meet its surgical targets.
Additionally, the contract reportedly included costs for two overnight stays per procedure, despite clinical advice that such stays were unnecessary.
Mentzelopoulos claimed that in early January, an Alberta Health official directed her to stop investigating ASG and MHCare Medical, a company that had secured a $70-million contract to supply children’s pain medication.
She claims that shortly thereafter, Health Minister Adriana LaGrange urged the AHS board to fire her, but when they refused, she was dismissed the next day via Zoom by senior health bureaucrat Andre Tremblay, who then replaced her as interim CEO, according to CBC.
Following her termination, Tremblay allegedly instructed AHS staff to cancel a scheduled meeting with the provincial auditor general regarding a forensic audit and internal review that Mentzelopoulos had initiated (CBC). Within weeks, LaGrange dismissed the entire AHS board and appointed Tremblay as the agency’s sole administrator, according to the report.
The lawsuit also alleges that LaGrange later issued a directive that removed AHS’s authority to negotiate private surgery contracts. The directive resulted in higher-than-necessary rates that "would lead to significantly increased costs to AHS – and potentially hundreds of millions in profits for the [facilities] owners," CBC reported, citing the lawsuit.
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Mentzelopoulos’s lawsuit also raises concerns about Jitendra Prasad, a high-ranking AHS procurement official. The former CEO alleges that Prasad had close ties to major contractors working with AHS, including MHCare Medical, according to the CBC.
The statement of claim points out that Prasad had an email address linked to MHCare in November 2022, just one month before the company secured its multimillion-dollar contract with AHS.
The lawsuit claims that Marshall Smith – who was Premier Danielle Smith's chief of staff until last fall – told Mentzelopoulos that Prasad was "his guy" in procurement and was placed in the health ministry to ensure the government could "get contracting right,” according to the CBC.
Mentzelopoulos argues that this raised concerns about political influence over procurement decisions, which should have remained within AHS’s authority.
The statement of claim also alleges that former AHS employees involved in procurement later took positions with private surgical facilities and that ownership stakes in some of these clinics were not fully disclosed, leaving AHS officials uncertain about who controlled portions of the businesses.
The allegations in the lawsuit have not been proven in court, and the Alberta government has 20 days to file a statement of defence.
In response to the lawsuit, LaGrange stated that many of the allegations and claims in the lawsuit “are clearly false, while others will need to be investigated further," according to the CBC.
Marshall Smith has denied the claims, calling them "outrageous and false." Premier Danielle Smith has also dismissed allegations of government interference, stating that her administration spent months requesting evidence of wrongdoing from Mentzelopoulos but never received any.
Mentzelopoulos refutes this, claiming that the government’s first formal request for information came in December and that she had kept LaGrange and the health department informed about her investigations, reported CBC.
The Alberta auditor general, AHS, and potentially the RCMP are now reviewing the claims. Meanwhile, AHS has announced a freeze on awarding new contracts to any companies under review.
According to the federal government, upon receipt of an unjust dismissal complaint, the complainant or the Labour Program’s Head of Compliance and Enforcement may request in writing that the employer provide a written statement.
“The statement must give the reasons for the dismissal, and it must be provided within 15 days after the request is made.
“It is the employer’s responsibility to demonstrate that the complainant’s dismissal was for valid reasons (disciplinary, etc.).”
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