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San Benito Health Care District officials say the allegations raised in a series of anonymous letters are false and are defending two executives’ qualifications and the CEO’s salary.
The officials also say Hazel Hawkins meets the requirements to be designated as a Critical Access Hospital and note that it was granted five years ago.
Director Devon Pack said he didn’t feel inclined to “respond to anonymous sniping,” referring to the four letters received by the district between Aug. 26 and Sept. 12. The district confirmed it had since received a fifth letter.
“They’re tactics San Benito County needs to be growing from,” Pack said of sending anonymous letters. “It’s disgruntled individuals who are not willing to stand up for their positions. There’ll always be random disgruntled people saying things.”
One of the letters said it was from “a group of district (hospital, SNF [skilled nursing facility], and clinic) employees.”
BenitoLink asked National Nurses Union united spokesperson Rachel Berger, if nurses were part of sending the letter, but she said she had no knowledge of the letter.
Pack said if employees wanted to raise concerns they could do it in other ways such as through their union or other channels.
With regard to the Critical Access designation, a letter authored by “a concerned citizen,” states the hospital administration fashioned a route to St. Louise Regional Hospital “to artificially meet the distance criteria.”
One of the criteria of hospitals under this designation is to be either located more than 35 miles from the nearest hospital or more than 15 miles in areas with mountainous terrain or secondary roads, according to the California Centers for Medicare and Medicaid Services.
District spokesperson Marcus Young said Hazel Hawkins meets all the requirements for the designations even though it’s less than 35 miles from several hospitals such as Saint Louise in Gilroy (19.4 miles), Watsonville Community Hospital (29.1 miles) and Natividad Medical Center (29.8 miles).
Hazel Hawkins Director of Marketing and Public Relations Frankie Gallagher said that CMS approved their designation because the two-lane highways in and out of Hollister are considered secondary roads. She claimed Hazel Hawkins qualified because it is farther than the next closest hospital under the 15-mile requirement for secondary road.
Like Pack, who said questioning whether the hospital meets the mileage requirement is “splitting hairs,” Gallagher said congestion can delay people from receiving care if they drive to the nearest hospital.
“At any given time, we all know this, it can take an hour and a half to get out of here, if you’re lucky,” she said. “So arguing about critical access designation is absolutely ridiculous.”
Young said the designation, which was achieved in 2020, is important for Hazel Hawkins because it brings approximately $6 million annually in related revenue.
“It’s confusing why anyone would wish to see that go away,” he said.
According to the California Department of Health Care Access and Information, hospitals under the critical access designation receive increased revenues through Medicare reimbursements. They are also limited to no more than 25 inpatient beds and required to maintain an annual average length of stay of 96 hours or less per patient for acute inpatient care.
While Gallagher questioned why someone would challenge the hospital’s designation after having it for five years, Glenn County’s only hospital lost its designation earlier this year because of a “newly interpreted” rule about the distance requirement, according to CalMatters.
The letter which states it’s from district employees alleges Casillas promoted “long-time friend” Amy Breen-Lema to a vice president position “for which she has no qualifications” and “created yet another VP position for Suzie Mays.”
Gallagher said Breen-Lema and Mays have years of experience in health care at different facilities and were hired and promoted based on their qualifications.
“Quite honestly it’s a little insulting to have their professional credentials called into question or say they have been hired based on their personal relationships with Mary,” she said. “They’re both very accomplished health care executives.”
According to her LinkedIn page, Breen-Lema has been the VP of clinic, ambulatory and physician services for more than two years and has a masters degree in health care informatics from the University of San Diego, and a bachelors in business management from the University of Phoenix.
According to Mays’ LinkedIn page, she has been the vice president of information and strategic services for almost a year and has a masters degree in information technology management and a masters degree in healthcare management, both from Trident University International.
In response to allegations that district employees are allowed to volunteer at a private food bank “while still being paid by the hospital,” Gallagher said they were all exempt employees.
“Volunteering can be part of team building and there are many other benefits (community engagement, public service, creation of goodwill, marketing, education, etc) that all contribute to the decision to have our employees volunteer as part of their regular work day,” Young said.
The letters resurfaced criticism about Casillas’ salary, which was initially approved as part of a one-year contract for $450,000 in January 2024, when the district was petitioning for bankruptcy.
Ten months later, she was renewed for three years with a 3% raise totaling $463,500 to match the cost-of-living adjustment given to other hospital employees, according to the district.
A former elected board member, Casillas was first elected to the health care district’s board of directors in November 2018 and resigned in 2022 to take the chief operating officer position.
In November 2022, she was appointed interim CEO after her predecessor, Steve Hannah, was terminated. As a board member, she participated in interviewing COO candidates.
Some community members and the California and National nurses’ union have opposed her salary, saying it was too high given the district’s finances at that time and because Hazel Hawkins is a rural hospital. Casillas did receive support from other staff members when she first was appointed CEO.
Pack and Young said at the time of her hire, the district conducted an independent review to determine her salary.
“This was discussed and presented during a public meeting,” Young said.
The salary comparisons included in the agenda packet relied on various data including 50th percentile salary range, salary structures and total cash compensation between the Southern and Northern California regions.
Young said he would look into which hospitals were included in the comparison, saying that it included hospitals in the area, but he has not yet provided additional information.
BenitoLink analyzed the compensation surrounding hospital CEOs including Salinas Valley Memorial Hospital, Watsonville Community Hospital, Natividad Hospital, Dignity Health Dominican Hospital and Mee Memorial Healthcare System in King City and found the base salaries range from $441,000 to $696,000.
Young referred BenitoLink to the Community Hospital of Monterey Peninsula’s CEO salary. When asked for that information, a hospital representative referred BenitoLink to its tax forms. According to the latest year available, in 2022, then-CEO Steven Packer was paid $1.2 million with an additional $1.3 million in other compensation. Packer retired in March 2025 and was replaced by Mike McDermott.
Amid the 2023 concerns over Casillas’ qualifications, BenitoLink analyzed the pay of the two previous full-time Hazel Hawkins CEOs, Hannah and Ken Underwood, and found they were hired at $350,000 and $336,000, respectively. Unlike Casillas, Hannah and Underwood had held CEO positions in other healthcare organizations.
Young said the district has not typically received anonymous letters and that it makes it difficult for the board to evaluate or respond to them.
“The board and staff invite members of the public to attend meetings to voice their opinions and concerns to the board directly or send written comments for the board to consider,” he said.
Asked if the district believes the letters are coming from a particular organized group or individuals, he said the district did not have enough information to respond to the question.
“The hospital leadership and the board are committed to keeping Hazel Hawkins Memorial Hospital open and providing excellent medical care to the community,” Young said. “While this task will not be easy, HHMH will move carefully and thoughtfully to shore up existing service lines, look for ways in which to expand services, collaborate with partners, while continuing to offer quality care in San Benito County.”
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