CHC under state of emergency-again

Gov. Benigno R. Fitial declared a state of emergency-again-for the Commonwealth Healthcare Corp. yesterday, allowing for both the reprogramming of funds to prevent a hospital shutdown and for the corporation to continue to contract with International Consulting Services LLC for medical billing services without going through standard procurement rules.

The governor signed the emergency declaration at the urging of CHC chief executive officer Juan N. Babauta since early this week.

Attorney General Edward T. Buckingham earlier issued a cease-and-desist notice to Babauta as the ICS contract “did not meet procurement regulations.”

With the governor’s state of emergency declaration, CHC will be able to either come up with a new sole-source emergency contract with ICS or correct the deficiencies in the existing contract to satisfy the AG’s concerns, among other things.

“A state of emergency for the Commonwealth of the Northern Mariana Islands is declared due to the imminent threat of the disruption of critical medical services in the Commonwealth and the danger that such a condition poses to the public because of the great increase in otherwise preventable deaths that would result,” Fitial said in his two-page Executive Order 2012-03 signed at 12:30pm yesterday.

The last time the governor issued an emergency declaration for CHC was on March 6, 2012, that expired early this month.

That previous EO allowed CHC to enter into a loan deal with the Marianas Public Land Trust, so that doctors, nurses, other employees, hospital vendors, and other outstanding obligations including power and water services will be paid, among other things.

Fitial’s previous EO came at a time when the House and Senate were not seeing eye-to-eye on a bill that would authorize almost the same loan agreement between CHC and MPLT.

Fitial’s new emergency declaration for CHC allows:

Suspension of all statutory or regulatory provisions as required;

The reprogramming of funds as necessary to meet this emergency.

As of yesterday, there was no telling whether Fitial would reprogram any funds to give to CHC so that the hospital won’t need to shut down some units.

Senate President Paul Manglona (Ind-Rota) said yesterday that the last time the governor placed CHC under a state of emergency, he did not reprogram any funds either.

Manglona said the Senate leadership is poised to approve a “compromise” bill that would authorize MPLT to provide a line of credit for CHC, even as the governor had already placed CHC under a state of emergency.

“I don’t think the governor declared a state of emergency to pre-empt what the conference committee has been doing,” he told Saipan Tribune.

Rep. Ray Basa (Cov-Saipan), a member of the six-member conference committee on House Bill 17-278, said they are going back to the original amount of $11.58 million, but this just incorporates the $3 million already provided to CHC as well as a $1.58 million loan for its electronic system.

In essence, the compromise bill will give the corporation an additional $7 million line of credit.

Basa, author of HB 17-278, said the conference committee completed its report on Friday morning and the three House members have already signed off on it.

Sen. Jovita Taimanao (Ind-Rota) said the three Senate members of the conference committee, including herself, are still reviewing the report and have yet to sign off on it as of yesterday afternoon.

House Speaker Eli Cabrera (R-Saipan) called for a session on Monday, during which the compromise version of HB 17-278 is expected to be acted on.

The Senate president also called for a session on Tuesday, mainly to act on HB 17-278 that will come out of the conference committee that is co-chaired by Rep. Sylvester Iguel (Cov-Saipan) and Sen. Ralph Torres (R-Saipan). Both are chairs of their respective committees on health.

Preventing financial abuse

Fitial, in his new EO, said the emergency declaration incorporates the March 19, 2012, memorandum of understanding between CHC and the Department of Finance, Office of Management and Budget, and Office of the Attorney General” to ensure that the suspension of regulatory provisions “does not lead to financial abuse.”

“In addition, any financial reports submitted by the CHC pursuant to the MOU must be submitted with a certification of the person submitting them stating that the reports are full and accurate under penalty or perjury,” the governor said.

CHC provides the bulk of healthcare in the CNMI, and all emergency medical services.

Fitial said disruption of CHC’s medical services poses a direct threat to the health and safety of CNMI people.

The corporation is also currently in arrears with its payments to vendors and salary payments to employees.

“CHC, due to financial constraints, will have to shut down major functions of the hospital, thus presenting an imminent threat to the public’s health and welfare. .CHC requires an infusion of funds to continue to provide medical services necessary for the health, welfare and safety of the people of the Northern Mariana Islands,” Fitial added.

MPLT and CHC agreed to a $3 million loan to provide needed funds to CHC so that it may continue to provide critical medical services.

Fitial said in order to refinance the repayment of an earlier loan from MPLT, and for CHC to ensure its future financial security, it is necessary for an emergency declaration to be made that will allow CHC to contract with a provider of medical billing services without CHC going through the standard procurement regulations, referring to the Idaho-based ICS.