Fitial working to privatize CHC

Gov. Benigno R. Fitial’s administration is now looking at privatizing the Commonwealth Healthcare Corp. and is working with Philippine-based The Medical City to assess the viability of transitioning the only government hospital in the CNMI into a private entity. But it is still a long shot, given the need to invite proposers instead of awarding a sole-source contract.

The Medical City is currently building an estimated $220-million private hospital in Guam, to be called the Guam Regional Medical City and to be completed in 2014.

Press secretary Angel Demapan said The Medical City “is doing the assessment on their own” and will not cost the CNMI government.

“The governor welcomes any other private providers who may be interested in presenting their plans,” Demapan said when asked whether Fitial plans to meet other private providers as well.

Fitial’s plan of privatizing the CNMI hospital comes barely seven months since the government hospital transitioned into a corporation.

Senate Health Committee chair Ralph Torres (R-Saipan) and House Health Committee chair Sylvester Iguel (Cov-Saipan) separately said that the Fitial administration should not rush to privatizing the hospital without giving CHC the chance to really grow.

Fitial, Lt. Gov. Eloy S. Inos, CHC chief executive officer Juan N. Babauta, CHC board members and other officials met with The Medical City officials yesterday morning at the governor’s office on Capital Hill. The TMC group was led by Margaret Bengzon, president and chief executive officer of Guam Regional Medical City.

Privatization is expected help the hospital further improve the delivery of patient care and treatment, billings and collections, among other things.

Demapan said The Medical City is a tertiary care hospital with over 40 years’ experience in hospital operation and administration.

“They were on island today to brief the administration and the corporation on their experiences in successfully managing a privately-operated hospital. They informed the governor and lieutenant governor that they will tour the CHC facility today to conduct an assessment on the viability of transitioning the lone hospital into privatization,” Demapan told Saipan Tribune.

Once their assessment is completed, Demapan said “they intend to once again brief the governor and lieutenant governor, at which time further discussion on the future of the hospital would be discussed.”

The Medical City serves some 40,000 in-patients and 400,000 out-patients annually, its website says. TMC has a medical staff of over 1,000 physicians who are established experts in their various fields of specialization. This core of professionals is complemented by a 2,200-strong human resource complement, engaged in allied medical, administrative, and support services, it adds.

The company website also says The Medical City is accredited by the Joint Commission International, the world’s most prestigious accrediting body for international health care organizations.

Torres, chairman of the Senate Committee on Health, believes that despite CHC’s problems with its billing and collection, among other things, the corporation will be able to turn the hospital around if given enough support.

“I still believe the corporation can work, but maybe it’s just being run by the wrong person,” Torres said. “We should give the corporation a chance to grow and stand on its own feet rather than rush to privatize it.”

If and when the Fitial administration and CHC are really convinced that privatization is the way to go, there should not be a sole-source award of contract to privatize the hospital, Torres said.

“There should be an RFP [request for proposal]. Look at what happened with the ICS [International Consulting Services LLC] contract. Had we done an RFP in the beginning, we wouldn’t have all these problems with the contract and we could have availed of the services of real, legitimate experts now. ICS is not the only billing expert in the world,” he said.

Iguel, for his part, said he’s “very much surprised” that the administration is now looking at privatizing the hospital.

“I have to agree with my counterpart in the Senate. We have to really look into this before making a decision. We have been working with the corporation to make the hospital work and in the middle of the game, there’s a change of plan. We should see what the corporation can do first and not make drastic change,” Iguel said.

Bills now before the governor

Fitial placed CHC under a state of emergency again on April 20, allowing for both the reprogramming of funds to prevent a hospital shutdown and for the corporation to continue to contract with ICS for medical billing services without going through standard procurement rules.

Attorney General Edward T. Buckingham earlier issued a cease-and-desist notice to CHC as the ICS contract “did not meet procurement regulations,” and later on, said the CHC-ICS contract negotiations were not proceeding anymore.

Since the emergency declaration, the Fitial administration has not reprogrammed funds to CHC.

At the urging of CHC, the House and Senate passed a compromise bill that would authorize the Marianas Public Land Trust to provide an additional revolving line of credit of up to $7 million to CHC so it can efficiently run its operations and prevent shutdown. That compromise measure, House Bill 17-278, is still under the administration’s review.

“The bill is currently under consideration,” Demapan said.

No sense of urgency?

Torres said there doesn’t seem to be any urgency on the part of the governor to approve the $7 million line of credit bill for CHC. He said this may be because CHC reportedly has $2.5 million that has yet to be drawn down, so this means CHC still has money to spare.

“Based on the information I got, CHC has not drawn down because it has yet to identify billings for it. Why not reimburse when the $2.5 million check is ready? I was told it’s still on the CEO’s desk,” he said.

Babauta had yet to return media calls as of press time, for comment on this particular matter.

A separate document obtained by Saipan Tribune yesterday afternoon also shows that Medicare made payments to the hospital and hemodialysis unit totaling $906,976.63 since November 2011.

CHC’s Babauta gave a detailed list of payments to Finance Secretary Larrisa Larson in a May 8 letter.

In that letter, Babauta asked Larson to “please prepare an accounting for when and how these payments were received and processed by CNMI Department of Finance-Treasury and provide the specific dates and voucher numbers under which these funds were transferred to CHCC’s account.”

Based on Babauta’s letter, there was close to $33,000 in payment made by Medicare to CHC on Feb. 27, for example, or over $78,000 on Feb. 21, 2012.

The list was from Dec. 1, 2011 to April 6, 2012. The individual payments range from $93.12 to $78,009.34.

‘Governing’ board

Torres said the governor also has before him his Senate bill that would change the CHC board from an “advisory” to a “governing” one.

He said he introduced Senate Bill 17-80 as early as June 2011, months before appointments to the CHC board were made, but the bill gathered dust at the House and only recently found its way to the governor’s desk.

“I think that had the board been changed to governing since then, we wouldn’t have a problem such as ICS because there’s going to be more individuals looking and approving a contract and not just one or two,” he said.

Torres, however, said “it’s not yet time to call for an oversight hearing on CHC’s contracts with vendors” and related matters. “But we are closely monitoring the situation at CHC,” he added.

Iguel said his committee is also keeping an eye on CHC matters.