Sage Memorial Hospital in Ganado, Arizona, has settled its lawsuit against the Indian Health Service for $200 million, according to a press release from Razaghi Health Care, the hospital’s management company.

Entrance to Sage Memorial Hospital. (Times file photo – Donovan Quintero)

The hospital had sued the IHS in 2013 after the government agency terminated its PL 93-638 contract, citing an independent audit that had confirmed whistleblower complaints of financial mismanagement, including a $1.8 million bonus paid to Razaghi Health Care CEO Ahmad Razaghi and the fact that the hospital had contracted with a staffing company also run by Razaghi.

In 2015, a federal judge in Albuquerque ruled that the IHS had failed to prove that the financial dealings had harmed patients at the hospital, and ordered the IHS to restore Sage’s contract.

Under the settlement, Sage will get a three-year contract with the IHS as well as $200 million over the three-year period to cover the money Sage lost by not having an IHS contract, which Sage claimed was roughly half its revenue.

Razaghi Health Care had sued the Navajo Times, the Gallup Independent and the five whistleblowers for running stories about the alleged mismanagement. The Times and Independent were later dropped from the suit and most of the defendants settled with the company.

Cindy Yurth is the Tséyi’ Bureau reporter, covering the Central Agency of the Navajo Nation. Her other beats include agriculture and Arizona state politics. She holds a bachelor’s degree in technical journalism from Colorado State University with a cognate in geology. She has been in the news business since 1980 and with the Navajo Times since 2005, and is the author of “Exploring the Navajo Nation Chapter by Chapter.” She can be reached at [email protected].