May 18, 2005 – Officials from the St. Thomas East End Clinic Medical Center (STEEMC) told the Senate Health, Hospitals and Human Services Committee Wednesday they were seeking to improve the state of the troubled health facility.
"We have been in crisis, both financially and administratively," Lloyd Williams, chairman of the clinic's board said. "But we're in the process of turning it around."
The medical center has gone through several recent changes with the firing of its former executive director Maureen Rabsatt-Cullar on Feb. 14. Wayne Moyer has been serving as the interim executive director for the clinic since April 18. Moyer is the manager of a medical center in Milwaukee but was sent by the U.S. Department of Health to assist the center until a permanent executive director is hired.
Williams said the board decided to fire Rabsatt-Cullar, who was present at Wednesday's hearing, because she did not provide accurate financial statements. Rabsatt-Cullar worked for the center for two years, from January 2003 until she was released in February.
The center's fiscal condition had taken a downhill turn when it moved from a public corporation under the Health Department to a private, non-profit entity in 2000. The decision to go private was made in hopes of getting federal funds that were not available because the clinic was not an independent, non-profit corporation. The Health Department had been operating the center since its establishment in1975.
A plan was made to transition all the Health Department employees at the center as employees of the East End Clinic. However, this plan has never been fully implemented, Williams said, because the organization has not been able to demonstrate its ability to pay for the employees.
"Is the clinic on the verge of bankruptcy?" Sen. Liston Davis asked.
Anneta Heyliger, chief financial officer for the clinic, said yes, because the center "doesn't have assets," and it cannot meet its debt because the money coming in is not sufficient to meet its obligations.
The East End Clinic, which is located at the Tutu Park Mall, owes the mall management about $70,000 in back rent since the V.I. government stopped paying the center's rent in November. The rent is $21,000 a month or $244,000 annually.
"We're in arrears about three to four months," Heyliger said.
The clinic also owes the government $1.2 million in payroll expenses for the local employees that should have been transferred to the medical center. The center is currently negotiating a payment plan with the government. The clinic also has several federal employees, but these are paid with grant money.
The center receives two federal grants each year amounting to $797,829 – $547,829 from the Section 330 grant and $250,000 from the Ryan White III grant. However, money slated for the 2005 fiscal year, which started March 1, can't be draw down until the clinic provides details of how the funds will be used.
The clinic receives $450,000 from the V.I. government each year.
The center is also owed $268,000 in unpaid medical bills, Heyliger said. The clinic serves primarily elderly, uninsured and indigent clients. By law the clinic cannot turn away anyone regardless of their ability to pay.
Sen. Celestino A. White Sr. said he didn't understand why, when the Frederiksted Health Center/Ingeborg Nesbitt Clinic received $800,000 annually from the V.I. government and was not paying rent, the East End Clinic received only about half that amount.
Elmo Adams, legal counsel for the government, said the Frederiksted center had more local employees than grant employees, hence the reason for the "disparity between the budgets of the two entities."
Sen. Adlah "Foncie" Donastorg said that since the East End Clinic became a private entity it was not issued a certificate of need from the Health Department as is required from all private health facilities.
"Our concentration was making sure that the corporation would exist," Williams said, adding they did not know if they would have been around long enough to pursue a certificate of need.
Williams said because of this morale had been low among employees.
"There's a fear of uncertainty, and once you have uncertainty, you have morale problems," Williams said.
Committee Chairman Sen. Usie Richards called Rabsatt-Cullar into the well to testify, but Williams opposed.
"I think it is highly inappropriate to have us here and to have Ms. Rabsatt-Cullar here," Williams said, adding that if he knew Rabsatt-Cullar would have been testifying he would not have come to the hearing.
Richards said, because all the current administrative employees of the clinic were new, he had invited Rabsatt-Cullar to speak to the budget of the center.
He wanted her to explain some of the "discrepancies" with the budget that was sent to him earlier this year. However, Rabsatt-Cullar said she could not speak to the matter because she did not want to "rely on memory."
Williams said the clinic board approved a recovery plan for the center Tuesday. The plan includes a cash flow projection, an employee reduction plan, a management recruitment plan, a facility replacement plan, a transition plan of personnel from the Health Department and a plan to complete the financial audit for 2001 to 2004.
Sen. Neville James asked why regular audits weren't conducted.
"This doesn't make any sense," James said.
Williams said, "It is required that there be an annual audit, but it wasn't done."
Heyliger said, two audits were conducted for calendar years 2001 and 2002; however, the federal government requested the audits be redone because they were not up to standard.
Williams, who has been on the board for a year, said the previous board did not meet its management obligations.
Williams said the make up of the board didn't have enough variety to reflect the community and members didn't have the skills set required to do the job.
Sixteen members now serve on the East End Clinic board, six of whom are appointed by the governor.
As part of the recovery plan, the clinic is negotiating with the Tutu Park Mall to reduce its office space and rent to $8,000 a month in an effort to reduce costs. The clinic has also discontinued its on-site dental program because it was a liability to the center due to the high cost of operation.
Davis said he was concerned about that because the Head Start population received dental treatment through the clinic.
"I hope that some type of services will be provided to these youngsters," Davis said.
"It's a plan in progress, although it has been approved," Williams said of the recovery plan, adding that changes are still pending. "It's a matter of trying to save STEEMC. We're having a good feeling that things will begin to turn around."
Williams added, "We're trying our best to really make this a viable corporation."
He said there's "urgency" in taking the actions outlined in the recovery plan because their four-year grant expires at the end of this year, and the center will have to once again apply for it.
Williams said, "We have got to, by the end of this year, be in a competitive grant mode."
Committee members present at the hearing were: Sens. Craig Barshinger, Davis, James and Norman Jn Baptiste. Sens. Lorraine L. Berry and Pedro "Pete" Encarnacion were absent. Sens. Donastorg and White, who are not members of the committee, were also present.
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