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Senate Passes Unfunded Hospital Appropriations Package

Before passing a completely unfunded $7 million emergency appropriation to hopefully keep Gov. Juan F. Luis Hospital from being effectively shut down, the V.I. Legislature added an additional $3 million appropriation of nonexistent funds for Schneider Regional Medical Center on Thursday.

Both territorial hospitals have been struggling financially for years, in part due to a large proportion of patients who are uninsured and do not pay for their care, among other, more complex and subtle issues. Juan Luis Hospital has also had a management crisis, with the V.I. Legislature passing legislation to prevent cost-cutting measures by the prior chief executive officer and the forced resignation of the prior CEO. Later several senators worked with the replacement and current CEO, Kendall Griffith, to help him force out several of the hospital’s governing board members, breaking its quorum. (See Related Links below)

Sen. Kenneth Gittens sent a press release out at the time announcing that he and other senators "worked feverishly … to draft legislation to dismantle the St. Croix Hospital Board." Griffith resigned his position and told senators he would only return if certain members of the board were removed. Those volunteer board members resigned to assuage Griffith and Gittens and the other senators. Griffith later fired the hospital’s chief financial officer and the post went unfilled for a time, during which much billing stopped at the hospital.

The Centers for Medicare and Medicaid Services issued a scathing report on the hospital and decertified it in September of 2014. The CMS report mentions the lack of a quorum on the board five separate times. It speaks of a "lack of oversight" and "the governing body’s ineffectiveness." It lists terrifying patient-harm incidents that should have been reviewed by the St. Croix board or, if not, by the territorial board so preventative measures could be put in place.

Since the report, two new board members have been confirmed, giving it a bare quorum, and the hospital has entered into a plan of correction with CMS.

Griffith testified for the $7 million appropriation, saying the medications, information technology, consultants and other budgetary items in the appropriation were absolutely necessary for JFL to regain full CMS certification. Without it, the hospital would lose $24 million every year in CMS reimbursements – and when insurance and other issues created by the CMS decertification are taken into account, the cost of decertification would be around $50 million a year, Griffith said.

Without the funding, it would be essentially impossible to make the improvements to regain CMS certification, so the loss would cripple the hospital and mean drastically reduced health care services for the St. Croix community, Griffith said.

But with the funding, the hospital is already on the right track, and has resolved "80 percent of compliance" issues already, Griffith said. "We have completely transformed our financial team," he said. "We did it. We doubled our collections. That is not a little thing," he said.

Acting Finance Commissioner Valdamier Collens testified that the administration of Gov. Kenneth Mapp supports the bill, supports the hospital and will do what it can to help – but he stressed the money simply is not there. Collens said there was still a $133 million budget shortfall and severe cash-flow problems, so any payment from the V.I. government could come in payments over time.

“If we are to have an honest discussion about this legislation, we must begin with a collective recognition that this legislation is seeking to appropriate funds that are simply not available. We must work together to eliminate the long standing tradition of appropriating (and re-appropriating) the same funds for multiple projects,” Collens said.

While the administration supports the bill, "it will be a matter of managing expectations," Collens said. "I do not want JFL to believe there will be a $5 million or $7 million check. What they can expect is something along the lines of an allotment," he added.

Sen. Janette Millin Young offered an amendment sponsored by 14 of the 15 senators appropriating an additional $3.4 million in nonexistent funding for Schneider Regional Medical Center.

Another amendment appropriated a much smaller sum for a payment plan to pay back the Federal Emergency Management Agency federal funding disallowed in a 2012 federal audit of VITEMA.

In August of 2014, FEMA began attempting to recoup $1.2 million in "unallowable" costs, acting VITEMA Director Mona Barnes testified. The largest portion is $568,069 for wages that "were not supported by activity reports or time sheets that indicated personnel had worked on grant projects or activities as required by regulations," she said.

Another $472,000 is for a sole-source professional service contract entered into "without prior written approval from FEMA as required," Barnes said.

VITEMA managed to reduce the amount for wages paid without evidence of work being done by $133,000 by submitting "missing certified time sheets as well as submitted affidavits from four out of the five employees in question," she said.

The governor requested a payment plan for the remaining $1.1 million in January, proposing a down payment of $150,000 by the end of March and quarterly payments of half that amount until the debt is paid off.

Barnes said, "Failure to meet this obligation may result in FEMA performing an administrative offset against requests for reimbursement on other projects, withholding of advance payments" or other unpleasant results.

The Legislature approved the bill as amended with 14 yes votes and Sen. Terrence "Positive" Nelson voting no.

Griffiths and hospital board members testified in support of another bill to let the hospital board temporarily pick two members to serve on the board for up to two years. Senators voted the bill down on a 10-5 vote.

Griffith said the board still only had a bare quorum of five members and it would be very helpful to be able to report to CMS "that this body and the executive branch has given two or four additional board members. It would show our commitment to resolve issues of compliance."

According to Dr. Anthony Ricketts, the JFL board chairman, "CMS was very clear they want a full board, not just a quorum but a full board."

But numerous senators expressed reservations over giving up their power to appoint members to the hospital board, even temporarily. Some senators suggested any potential board member the board itself might propose could be immediately forwarded to Mapp, then sent to the Legislature, making the change to the law unnecessary.

"I do not believe it will result in a member coming to the board any sooner. We did not get that testimony today," Sen. Tregenza Roach said.

The measure failed.

Voting no were Gittens, Nelson, Millin Young, Roach, Sens. Marvin Blyden, Jean Forde, Clifford Graham, Justin Harrigan, Myron Jackson and Novelle Francis. Voting yes on the bill were Sens. Neville James, Almando "Rocky" Liburd, Nereida "Nellie" Rivera-O’Reilly, Sammuel Sanes and Kurt Vialet.

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