Maratita: Muña opaque with CHCC finances

Vice Speaker Janet Maratita, who is offering a bill that would abolish the Commonwealth Healthcare Corp. and revert it back to the Department of Public Health, accused the corporation’s management yesterday of not being transparent with its finances.

In an interview with Saipan Tribune, Maratita (R-Saipan) said that CHCC, currently under the management of chief executive officer Esther Muña, is opaque when asked to provide financial records.

“Regardless of the amount of letters sent to CHCC, it is unfortunate that we are not able to get what we need to assist them,” she said.

“We cannot assist them if they do not give us the information to justify appropriations that we appropriate to them,” she said, adding that the House has been trying to provide CHCC with funding but “the lack of concrete information” hinders that effort.

Maratita’s House Bill 20-149 seeks to repeal Public Law 16-51 that created CHCC and revive it as a line department under the Office of the Governor, known as the Department of Public Health.

“I have a passion to assist the corporation; however, I could not get all the necessary information to assist the corporation,” added Maratita.

Citing numbers reportedly extracted from the medical referral program, Maratita said a large portion of patients who are referred to off-island hospitals are due to either the lack of specialized doctors at the Commonwealth Health Center or the lack of necessary medical equipment.

Maratita said her office has been asking Muña for an updated list of hospital equipment and tools but got nothing.

When asked for comments, Muña provided Saipan Tribune with copies of the letters that Maratita sent CHCC.

According to a letter dated last Dec. 22, 2017, Maratita asked for a total of 26 documents from CHCC.

The documents, described by Muña in a message to Saipan Tribune as “voluminous,” included documents such as personnel listings and annual salaries from fiscal year 2012 to fiscal year 2018 and a separate report for policies and procedures on personnel, procurement, healthcare quality services and safety, accounting system, information technology system, revenue cycle system, off-island medical referrals, subsidy programs for low income, CMS service, financing, travels, and all other operational policies—including those for the several clinics under CHCC, the Kagman Health Center, etc.

Following these two requested items, Maratita also asked for 24 more reports to be compiled and submitted without a given deadline. All in all, Maratita asked CHCC for a total of 26 reports.

“In the meantime, we have to prepare for the audit, a cost report filing and budget preparation for the board to review, all due in January. We are a busy department,” said Muña, adding that none of Maratita’s letters specified any deadlines.

Muña also provided Saipan Tribune with their response to Maratita’s request.

Muña said in a letter dated last Jan. 12, 2018, that CHCC is bombarded by not only board of directors’ requirements, but also annual audit requirements and other external requirements expected of CHCC.

“CHCC has…begun its 2017 single audit concurrently with the 2016 audit for CHCC to be back on track for timely single audits,” Muña told Maratita. “CHCC is simultaneously addressing its 2015 single audit with the Office of the Inspector General, which requires extensive reporting and evidence substantiation.”

Muña continued: “In addition, CHCC is also working on and finalizing its fiscal year 2019 corporate-wide budget for all of its over 100 business units for presentation and submission to CHCC’s board…as well as the CNMI Legislature.”

Muña added in her letter that the 2019 corporate budget includes major reevaluation and analysis of CHCC corporate revenue projections, given the eventual loss of Medicaid Children’s Health Insurance Program funding, which amounts to “millions of dollars of lost revenues” for the corporation.

In addition to the heap of requirements, she added that she was also working on the CHCC fiscal year 2017 Medicare cost report, a report requiring extensive data analysis, reconciliation, and reporting as well as the fiscal year 2016 Medicare cost report.

“These are all major tasks required of CHCC and normally run concurrently, which requires major effort from CHCC staff. As such, we respectfully request for additional time to address your data requests,” said Muña.

Maratita reportedly did not respond to the letter.

In a message to Saipan Tribune, Muña said that CHCC has responded to requests from the Legislature several times.

“I have never seen anything like this before. A legislator who constantly attacks instead of helping CHCC,” Muña said. “I talked to [Maratita about the requirements] at church. She said it was okay and that she understood that I recently lost my brother.”

Writing off over $203M in debt

Maratita’s Dec. 22, 2018, letter not only mentioned the mammoth number of reports she requested, but also questioned CHCC writing off over $203 million in debt that was owed the former DPH, as cited in CHCC’s 2014 single audit.

“This amount, in my humble opinion, needs to be justified,” Maratita wrote Muña in the same letter.

Muña responded in her Jan. 12, 2018, letter that the bad debt, or uncollectible debt, dated back to the inception of the former DPH.

“Upon the creation of the CHCC, the bad debts of the former DPH were significantly aged. Thus, as recommended by the public auditor, these former DPH bad debts were written off as uncollectible, especially given that DPH, formerly a unit under the auspices of the Executive Branch, was dissolved and a new healthcare corporation was created by public law,” Muña wrote.

In an interview yesterday, Maratita told Saipan Tribune that CHCC was unable to provide documentation to back up the claim that the public auditor recommended that CHCC write off the balance.

Citing the public auditor, Maratita said, “They couldn’t find anything in their reports that states they recommended that.”

“Even if CHCC did write it off, she should have reported to the Legislature, reported to the people,” added Maratita.

‘CMS funding would continue’

CHC, which has been receiving funding from the Centers for Medicaid/Medicare Services, or CMS, cited the former DPH for failing to comply with one of their conditions for participation by having an organized governing body.

While Maratita recognizes that potentially losing CMS funding is a legitimate concern, she is having the House legal counsel look into the requirements.

“I can assure that we will not lose the accreditation. We are not violating [the CMS requirement] because [of the] fact that CHCC would be reverted back to a line department under the central government,” she said.

Maratita said the legal counsel reportedly informed her that CMS funding would not be disrupted if CHCC were to be reverted back.

“…Everything is going to be the same. It’s just that CHCC is not going to be run as a corporation with a governing board, but a [department under the Executive Branch],” she said.

According to Title 42, Chapter IV, Section 482.12 of the Code of Federal Relations on CMS condition of participation, a hospital must first have an “organized governing body” or, if unavailable, “persons legally responsible for the conduct of the hospital.”

That governing body would then be tasked with appointing a chief executive officer responsible for managing the hospital.

Maratita’s H.B. 20-149 would abolish both CHCC as a corporation and its board, effectively reverting it back to DPH. CMS first deemed the hospital in violation of the condition for participation due to its organizational structure as a department under the Executive Branch, with a secretary assigned by the governor leading DPH.