The day before Vancouver’s first urgent and primary care center opened in 2018, the provincial government held a news conference celebrating the facility as a step toward improving the quality of health-care in the city.

“We want people to get the care they need in their community,” Health Minister Adrian Dix said that Sunday.

Less than five years later, that relationship has soured.

The clinic is deep into a legal battle that it says has ultimately forced doctors to stop providing patients with ultrasounds, X-rays and other critical diagnostic tests, despite having the equipment to do so in-house.

“Unfortunately, when our patients are coming to us in their most distressed state, we’re having to tell them that they can’t go and get the test done right now, even though we have the facilities down the hall,” said Dr. . Eric Cadesky, a family physician and the chief medical officer for Seymour Health.

“We have to send them elsewhere. It’s heartbreaking for us.”

The issue at the heart of a BC Supreme Court case is a bitter fight over billing for those diagnostic services, which, according to court documents, has left the clinic’s owners vulnerable to a takeover with more than $10 million in debt.

BC approached Seymour Health for help

The saga started when the government approached Seymour Health, a private company, about launching an urgent and primary care clinic (UPCC) in Vancouver earlier in 2018. The company said the province wanted to emulate the success of its existing team-based clinic in the South Granville area.

Seymour Health eventually opened two UPCCs: the City Center Clinic and North Shore Clinic in North Vancouver.

The sites were promised as one-stop shops with family doctors, nurse practitioners and diagnostic services like lab work, ultrasounds and X-rays in one place.

Seymour Health claimed it was told the province it was essential to be able to run those tests in-house if the clinics were going to be proper alternatives to emergency rooms — otherwise, patients would end up at the hospital anyway.

For the clinics to be financially viable, Seymour Health planned to bill the province’s medical services plan (MSP) for the diagnostic work.

The company claimed the government was initially on board with the MSP billing plan but never granted licenses and permissions it needed to be able to send in the bills.

“If Seymour Health had been advised that there was little or no chance of getting the licenses … it would have declined to build the City Center Clinic,” court documents read.

Cadesky said the clinic has been running $2.1-million worth of tests each year but only getting $180,000 in funding from Vancouver Coastal Health (VCH).

CBC News has contacted the Ministry of Health for comment, but they did not respond by publication time.

Company, owners use their own money to cover tests

Seymour Health’s applications for the necessary billing licenses were rejected in 2019, 2020 and again last month. The company said it initially paid out-of-pocket to keep the diagnostics running.

Its owners, Sabi Bining and Sandeep Parmar, said they personally invested $3.4 million, secured millions more in loans and took out a second mortgage to cover costs.

“At this point, Seymour Health was in a state of financial crisis,” the court filings read.

“The clinics were running well and to the satisfaction of both physicians and patients, but the continuing failure by the government … has brought Seymour Health to the edge of insolvency.”

Vancouver Coastal Health goes to court

On June 7, VCH applied to appoint a receiver to settle the company’s debts and ultimately take over the urgent and primary care centers.

“The overriding consideration in this instance is the need to protect the 70,000 patients who will almost certainly suffer significant prejudice if Seymour does not continue to operate under new ownership or some form of restructuring,” the filing read.

“The status quo is not a viable option.”

The health authority said Seymour Health’s financial trouble goes beyond the MSP billing issue, starting with trouble making rent payments in 2019. Court filings said the health authority has given Seymour Health more than $6.7 million in loans and unpaid rent, which has not been repaid.

“I think it’s really important for the public to know that Vancouver Coastal Health has been working with Seymour around their financial difficulties for over a year, and we took the steps that we have taken to make sure we can keep the urgent primary care center and the primary care clinic for those patients open and they can have continuous service,” said Bob Chapman, vice president for Vancouver Community for VCH, which oversees VCH’s primary care clinics in Vancouver.

Court documents also stated VCH commissioned an external Ernst & Young audit of the company’s finances last fall, which Chapman said found “they were not going to be able to continue to meet their financial obligations.”

Cadesky said the health authority’s court application effectively forced his clinic to stop running diagnostics because they couldn’t go into more debt while the receivership case played out.

Meanwhile, Chapman said patients said hospitals in the downtown core should offer diagnostics — which would leave patients back in hospitals the UPCCs were meant to help them avoid.

If VCH is successful in its takeover, Chapman said the authority would continue to offer diagnostic tests.

The company has countersued the province and VCH for breach of contract. Its claim said the company’s operating losses now top $12.5 million, while the owners have personally lost $8 million.

“[The owners] claimed aggravated damages based on the anxiety, humiliation, embarrassment and mental distress they have experienced arising from the tremendous financial pressure they have suffered, caused by the government’s conduct,” court documents said.