Idaho-based ICS officially out of CHC

The Commonwealth Healthcare Corp. management and board of directors have agreed to officially end its relationship with Idaho-based International Consulting Services last June 1.

Corporation board chair Joaquin Torres confirmed with Saipan Tribune yesterday that ICS staff left the hospital Friday after the expiration of the grace period of the cease-and-desist order from the Office of the Attorney General.

The sole-source ICS contract was earlier declared by OAG as unlawful for failing to meet the requirements of the law.

The deficiencies in the original contract—signed on Feb. 28 this year—were supposed to have been “fixed” by the central government’s re-declaration of a state of emergency at the hospital, on top of ICS reducing its service fee from 11.5 percent to 10 percent. All these efforts are now deemed moot, according to Torres, including the reduction of the original six-year contract to just six months.

Torres revealed that the corporation’s chief executive officer Juan N. Babauta is rebuilding a team of in-house personnel who will take over the supposed function of the ICS through its billing and collection department. A meeting was scheduled between Babauta and the management team yesterday morning to further discuss plans for this department.

Torres said that at this point, the corporation will not seek a new contractor for the billing and collection services of the hospital.

Last week, the corporation also did not renew the six-month contract of chief operating officer Jim Phillips, whom the board earlier described as the contact person for the ICS contract. Torres had expressed dissatisfaction with Phillips’ performance, accusing him of not divulging all information and transactions with ICS.

Since they don’t have enough existing staff to man the proposed billings and collection department, Torres said the hiring of qualified employees such as coders and billers is on the table and being finalized.

Prior to the ICS contract, CHC hired the services of Guam Marianas Collection Agency to collect “old debt” from patients. Torres could not immediately comment if the GMCA contract is still valid, but pointed out that the company’s scope of work was only up to March 2011.

Since taking over the hospital in October last year, the corporation has uncovered $52 million in uncollectibles, mainly due to the late issuance and delivery of medical bills to patients and clients.

Torres told Saipan Tribune yesterday that a joint investigation was initiated since last week by the OAG in conjunction with the Office of Public Auditor after the discovery of about $37,000 in advanced payments received by ICS, without the knowledge of the board.

Torres said the corporation aims to recoup any “improper” payments made to ICS.

Besides the investigation on ICS, the OAG and OPA are also looking at other contracts and agreements signed by the corporation without the signature of the attorney general, pursuant to law. Among these contracts is the hiring of chief financial officer Alvaro Santos.