ICS cuts commission, removes other fees

The controversial contract of Idaho-based International Consulting Services LLC will soon be revised after the company’s top executive agreed to reduce their commission and remove other fees, according to Commonwealth Healthcare Corp. chief executive officer Juan N. Babauta Saturday.

Babauta, and chief operating officer James Phillips, reported to the corporation board that ICS is willing to provide a flat rate of 11 percent for all the services it will render to the organization. Its top official, Louis Kraml, is set to fly this week to Saipan to present the company’s plan for the corporation and seek an audience with the board in a closed-door meeting.

ICS was earlier approved a six-year contract with the corporation, paid on commission at a rate of 11 percent in first three years and 11.5 percent in the last three. This is on top of other fees such as 5 percent of billed charges for accounts that are deemed uncollectible because of erroneous information from the corporation will be reimbursed to contractor and $95 per hour rate of service when ICS performs management, bookkeeping and accounting works, among others.

Saipan Tribune learned that Gov. Benigno R. Fitial, during his 7am meeting Thursday with Babauta, had expressed concerns with the original contract, particularly the commission rate, describing 11 percent as “too high” and not “within industry standards.” The governor had also raised the need for the attorney general’s signature on the contract.

Babauta said he immediately conveyed all these concerns to Kraml, who affirmed the company’s commitment to help turn around the public hospital.

In his letter to Babauta, the ICS official reiterated that the company will continue what it has been doing and will not only meet but will exceed the expectations of the corporation for the hospital to succeed. Kraml also promised to provide additional help in providing high quality physicians if the corporation needs it.

“We have the best of intentions and we will not abandon but will continue to help CHC,” Kraml said, confirming his upcoming trip to Saipan.

Babauta described Kraml’s commitment as a positive thing for the corporation, which is convinced that ICS will help CHC in its mission to keep the hospital open.

Babauta said the company offers “much more than billing and collection services.” More importantly, he said, it will fix the hospital’s broken financial system, which is key to realizing the desired revenues. He described the existing collections and revenues generated by the hospital as only a “scratch on the surface.”

Last Friday, the governor declared a new state of emergency for the hospital to allow the corporation to address issues with the billing service provider. Babauta said that throughout this 30-day declaration, new documents will be routed-this time with the AG’s signature-and with the revised service fees with ICS.

Board members voted Saturday to keep the ICS contract.

Babauta explained that he went ahead and processed the ICS contract with the best intentions, mainly due to urgency of the crisis at the hospital and in consultation with assistant attorney general James Kearney.

“We’re sinking deeper and deeper. And I have to act, but is not a unilateral act because I consulted with the board chairman and members and our legal counsel. We did it in the open and with the best intentions,” he added.