AG and health corp. agree on a new six-month contract for ICS

A new six-month contract with International Consulting Services will soon be signed, according to the Office of the Attorney General and the Commonwealth Healthcare Corp. after their meeting Friday with the owner of ICS.

Attorney General Edward Buckingham said in a statement yesterday that the corporation and ICS owner Dan Cochrane reached a “near-final” agreement Friday for support services in patient billing and collection.

Buckingham said the parties are working to address legal issues, which include a cap on start-up costs and removing the 10-percent administrative fee, reducing ICS’ fee from a maximum of 11.5 percent to the industry standard, removing the 5 percent fee in cases where errors by CHC prevent collection, and providing for a six-month contract.

ICS was originally approved a six-year contract, to be paid at 11 percent commission in the first three years and 11.5 percent in the last three years. The Executive Branch criticized these rates as “too high” and “not within industry standards.” The contract also became the subject of criticisms as it was sole-sourced and made outside the emergency declaration at the hospital.

Babauta told Saipan Tribune that the hospital needs ICS to provide a base financial support for the Commonwealth Health Center. “I am grateful that ICS has come back to the negotiating table and has provided the Commonwealth with more favorable terms. These should prove invaluable to not only those in the healthcare field but should reassure the public that we are making real progress in our continued delivery of health services,” he said.

Cochrane spent hours Friday meeting with the corporation board in a closed-door session. “We are grateful that we will have the opportunity to show support to the people of the Commonwealth. Our company is thrilled to bring its extensive experience and skills to bear,” said Cochrane.

ICS and the corporation expect the new six-month contract to be ready for final review and approval by parties and the OAG in the next several days.

“The devil is always in the details….but we are hopeful we can get this into language acceptable to all parties concerned,” said Buckingham in a statement to the Saipan Tribune.

Eight corporation board members signed Friday an official statement that clears both ICS and Babauta of alleged illegal billing contract after an hour-long executive session where they personally discussed the matter with Cochrane.

“It has recently been said in the press that ICS and in particular, Louis Kraml, has entered into an illegal contract with the CHCC. ICS has done nothing illegal and in fact were the only people willing to help CHCC when this small hospital was about to close leaving the 55,000 residents of Saipan without critical healthcare. It is important to understand that ICS did not approach CHCC to solicit business. In fact, CHCC sought ICS out through their reputation and asked them if there was anything they could do to help,” states part of the board statement.

It added that the issues surrounding the ICS contract are between the OAG and the CEO. “These issues surround the authority and manner under which the new corporation enters into contracts. These issues have now been resolved and the contract meets the specifications previously identified by the OAG. Consequently, the contract is in the process of being approved,” the statement added.

The document was signed by Babauta, board members Joaquin Torres, Pedro Dela Cruz, Roy T. Rios, Anthony Aguon, Anthony Raho, Dr. Jeremy Richards, and corporation chief financial officer Alvaro Santos.