Former PACE exec sues Pavilions under Whistleblower Act

Jan. 22—TRAVERSE CITY — The former executive director of PACE North has sued the Grand Traverse Pavilions, its CEO and a board member for violating the Whistleblower Protection Act.

Mary John-Williams, who was terminated in October, also claims she faced discrimination based on her race, age and status as a single mother, according to the lawsuit filed in 13th Circuit Court.

Rose Coleman, CEO of the Pavilions; Cecil McNally, chairman of the county Department of Health and Human Services Board, which oversees the Pavilions; the board itself; and the county-owned Pavilions are named in the lawsuit.

John-Williams was hired by the Program of All-inclusive Care for the Elderly (PACE) North in July 2021 and, after a few months on the job, began to question several items outlined in the management agreement with the Grand Traverse Pavilions.

Her questions included services that weren't being delivered and a pay scale based on a percentage of PACE's gross revenue rather than a flat fee, she said.

The agreement wasn't like any John-Williams said she had ever seen in her five years of experience working with the PACE model.

She said she also wasn't sure why Coleman, who was named CEO of the Pavilions in November 2021, was her direct supervisor, since the agreement states that PACE North is its own entity and the Pavilions is a contractor.

John-Williams said she had not seen the management agreement before being hired and had expected that she would answer directly to the PACE North Board of Directors.

When she asked Coleman about the management structure, she was told that PACE was owned by the Pavilions, something John-Williams said wasn't true.

"That's one of the problems with the management agreement," said attorney Blake Ringsmuth, who represents John-Williams. "The executive director of PACE, a separate organization, is an employee of the Pavilions — which has a financial stake in PACE and is a conflict of interest."

When contacted by the Record-Eagle, McNally said it would be inappropriate for him to comment on the lawsuit, but that he was aware it had been filed. Coleman could not be reached by the Record-Eagle.

Coleman was promoted to CEO of the Pavilions about three months after John-Williams was named executive director of PACE. Coleman replaced former CEO Kory Hansen, with whom John-Williams said she had a good working relationship.

When Coleman took over, John-Williams said she noticed a difference right away in how she was treated.

She was micromanaged, she said, with Coleman dictating when John-Williams could take a day off. Coleman would want to meet with her, but it was never about PACE, she said.

She said she had never been treated like that in other executive roles she has held and their interactions made her uncomfortable.

"We put in the filing that it was based on race," John-Williams said, noting that this is an unusual stance for her.

"I didn't get this far by (thinking) every time I walk out my door if somebody looks at me or says something mean, I think it's because I'm a Black female," she said. "I wouldn't survive thinking that way."

John-Williams said she wasn't sure what was going on, but her "spidey senses" were up, especially when Coleman told her she was the first Black woman to hold a position of this stature in this community.

And, when John-Williams said she needed support from the executive team, that she was working nights and weekends, Coleman suggested that she was unable to do her job because she was a single parent.

"She referenced me being a single parent and alluded to my output, my ability to do this job," she said. "Instead of, 'I support you, let me know what you need,' it was: 'You're a single parent.'"

John-Williams said she asked Coleman not to refer to her being a single parent or to her community stature as a Black woman because it had no relevance, but Coleman brought up both again during her evaluation.

John-Williams also thought it was important for her employees to have Martin Luther King Jr. Day as a holiday.

Coleman told John-Williams that her employees could have the day off, but that she couldn't because she was an employee of the Pavilions.

The topic of MLK Day came up in John-Williams' evaluation when Coleman stated the day "was only important to the people down in Detroit" and that it "was not important to the people in northern Michigan," according to the lawsuit.

The discrimination toward John-Williams was offensive, hostile, intimidating and continued throughout her employment, the lawsuit states.

The investigation that is required by the Michigan Civil Rights Act when an employee makes a discrimination claim was never done because the Pavilions kept delaying it, according to the lawsuit.

The suit also alleges that the county's HHS board chair McNally repeatedly told PACE representatives that Coleman's comments were not a concern, the investigation wouldn't find anything significant, and Coleman would not be disciplined.


PACE North, at 2325 N. Garfield Road, provides all-inclusive care for those 55 and older who may qualify for nursing home care, but would rather stay at home. There are 144 PACE organizations operating across the U.S., with 14 in Michigan.

Each one is a stand-alone entity. Programs are mostly funded by Medicaid and Medicare reimbursements and must comply with the the federal Centers for Medicare & Medicaid Services (CMS) to receive funding.

New PACE programs are audited every year during a three-year trial period to make sure they are in compliance.

After John-Williams was hired, she said she made a point to familiarize herself with the management agreement, which has been in place since October 2018. In it, PACE North is named the "owner," and Grand Traverse County Health & Human Services Board, doing business as the Pavilions, is named as the "manager."

Under that agreement, the manager is to provide human resource services, marketing and communications, maintenance, IT and some financial services. The only services being provided were IT services, so she questioned what services PACE was paying the Pavilions for, John-Williams said.

She also questioned the fee structure, which she said conflicts with CMS criteria that says providers of management services are to be paid a flat fee based on fair market value.

The fee received by the Pavilions is on a sliding scale.

If PACE has up to 99 enrolled clients, the fee is 1 percent of PACE's revenues; from 101 to 149, the fee is 2 percent; and if there are 150 or more enrolled, the fee is 3 percent. If more than 200 are enrolled, the agreement is to be renegotiated.

The program is now at capacity, or 140 clients, according to a recent report from Coleman to the Grand Traverse County Commission.

"It was a 20-year contract and there was not a flat rate that was going to the Grand Traverse Pavilions," John-Williams said. "It was based purely on the revenue of PACE North. So, as PACE North grew, it would be paying to the Pavilions a percentage of that revenue. That is nothing I'd ever seen."

Another point that bothered John-Williams was that a copy of the agreement was not included in foundation documents for PACE that were given to CMS.

"Here we are, going into our third audit, and CMS did not know that we were operating under a management agreement," she said. "That was concerning."

It was not so egregious that she felt she should pick up the phone and call CMS, but PACE was in its third year of the trial period and she said she felt there was some urgency to get it right.

So John-Williams informed Coleman and McNally of her concerns, but said nothing was done.

"As part of my duties, I need to make sure this organization is running in compliance with the law," John-Williams said. "That's my role, I felt, as an executive director, to review all of these things and, if you notice you're out of compliance, there is a timeframe in which you can course-correct."


In May 2012, The Maples, a Benzie County-owned skilled nursing facility in Frankfort, was sued by Lori K. Smith for retaliation regarding the Medicaid False Claim Act.

Coleman, who was not named in that suit, was the facility's director at that time.

Smith had been a social worker at The Maples for about five years when she was terminated in September 2011, after telling administrators that she would no longer report inaccurate information to the state regarding a resident who had been improperly certified for Medicaid coverage, according to the lawsuit.

She had been raising the issue for about three years, Smith said.

Throughout that time, that lawsuit alleged, Coleman told staff to not discharge the resident and to falsely bill Medicaid for his care, saying she would "take a risk" of the state discovering the false billing.

Coleman, who was director there for about six years, left that post in January 2012, according to previous reporting by the Record-Eagle.

No reason was given for her departure.

Coleman received about $80,000 in a severance agreement and agreed to not file a lawsuit against The Maples or the Benzie County Department of Human Services Board, which oversees the facility.

The agreement also stated her personnel record will show she voluntarily resigned and it prohibits her from publicly making negative comments about The Maples.

Two months later, Coleman was hired by the Pavilions.

About 11/2 years later, Coleman was named in a lawsuit filed by Beth Rideout, who claimed wrongful termination in violation of the Whistleblowers' Protection Act.

The Pavilions and Grand Traverse Medical Care Facility also were named in the suit.

Rideout had been a social worker at the Pavilions for about four years when she was fired in May 2013.

According to the lawsuit, Rideout was subjected to harassment by Coleman after she reported seeing a nursing assistant strike a patient.

She was placed on a five-day suspension after reporting the October 2012 incident and subjected to daily monitoring and biweekly reviews by Coleman, even though Rideout had been given a raise and a good review just months before, the lawsuit stated.


John-Williams said that, after moving to Traverse City, she has felt very welcomed by the community and has made it her home.

She is involved in a mentorship program and her daughter was accepted to Interlochen Center for the Arts.

"I never expected to be treated this way by my employer," she said.

Her attorney said he was shocked by the racial animus shown to John-Williams.

"I'm proud to stand behind Mary," Ringsmuth said. "She is a brave woman to come forward.

"Discrimination and retaliation rarely withstand scrutiny in the light of day. This is not what our community stands for and it is an honor to help expose and purge it."