$4.45M more sought for Medical Referral

The Commonwealth Healthcare Corp. has requested Gov. Arnold I. Palacios to provide $4.45 million in supplemental funding for the remainder of fiscal year 2023 to support the costs of the former Medical Referral Program (now known as the Health Network Program) and for the immediate transfer of $292,666 to pay its vendors.

In a letter to Palacios on Monday, CHCC chief executive officer Esther L. Muña also disclosed that, based on their analysis, the CNMI government has retained $4,115,492 of the $17,808,596 appropriations from Public Law 22-08 (the fiscal year 2022 budget law), and $217,924 from Rota Local Law 22-04 that was intended for CHCC.

“We would like an accounting of the expenditures charged to that to ensure no obligation prior the date of transfer was charged to this account pursuant to Public Law 22-08 and Public Law 22-33,” Muña said.

She asked for the prompt transfer of the unused funds to CHCC, pursuant to the law that established the Health Network Program under CHCC (Public Law 22-33). Palacios signed the law on Jan. 31, 2023.

Muña said the additional funding is needed to sustain the HNP operations. She said CHCC is dedicated to providing quality healthcare services to CNMI residents, and the HNP plays a crucial role in achieving that mission.

Despite ongoing successes to expand health services access within the CNMI, Muña said there remain services that are not available within the Commonwealth. “The HNP bridges this gap for our income-eligible residents,” she said.

And while the HNP is a lifeline for many, Muña said the financial costs of this program is beginning to impede CHCC’s responsibilities to providing care within CNMI itself.

Muña noted that both Palacios and Lt. Gov. David M. Apatang may remember from their time in the 16th CNMI Legislature when they both voted in favor of CHCC’s enabling legislation that there was an understanding among the members of the House of Representatives that, until the CNMI enacts a comprehensive healthcare financing system, “CHC will continue to require governmental subsidy particularly for indigent care and medical referrals.”

Muña noted that, from 2018 to 2020, the average annual deficit of the Medical Referral Program was more than $9.8 million. Yet since the transfer of the Medical Referral program to CHCC, they have been able to reduce expenditures by more than 30%, demonstrating their commitment to financial responsibility and efficiency, she said.

“Despite this progress, we still rely on public funds to keep the program operational,” the CEO said.

With understanding that the government’s budget is limited, Muña said they are committed to ensuring that any additional funds will be used prudently and effectively to bring about tangible improvements to the healthcare system.

Muña said that, pursuant to a provision of Public Law 22-33, the unexpended balances of appropriations, allocations, allotments and other funds available for the use of off-island Medical Referral Program on the date of the transfer shall be transmitted to CHCC.

She said in the transfer of such funds, an amount may be reserved for the liquidation of obligations incurred prior to the handover.

Muña said that pending the transfer of any unused funds from Public Law 22-08, CHCC having been appropriated only $1 from Public Law 22-22 (Fiscal Year 2023 Appropriations Act), it will now have to request Palacios and the Legislature for supplemental appropriation.

Muña said the projected need of $4,450,507 will support the HNP offices on Saipan, Guam, and Hawaii, and the cost related to patient airfare, accommodation, ground transportation, and subsistence, from April 1 to Sept. 30, 2023.

CHCC did not include in this projection medical evacuation requiring air ambulance and the cost of returning human remains.

On the request for immediate transfer of $292,666, Muña said that, as of March 31, 2023, cumulative transfers to CHCC was $13,911,028, while medical travel reimbursements was $1,014,194, for a total of $14,925,222.

With total expenditures of $15,217,888, this leaves CHCC $292,666 in deficit.