CHC gets 45-day window to iron out ICS contract

Without a “lawful” contract, all activities between International Consulting Services and the Commonwealth Healthcare Corp. will have to end 45 days from the date of the notice to cease and desist, according to Attorney General Edward T. Buckingham.

Buckingham issued the notice on April 17 to corporation chief executive officer Juan N. Babauta, more than a month after Babauta signed a sole-source, six-year contract with the Idaho-based ICS to provide billing and collection services for the Commonwealth Health Center.

In a phone interview last night, Buckingham said the 45-day window is “reasonable and fair” given the “unique” circumstance of having the OAG be presented “with an activity that is not lawful.”

However, he was also informed by Babauta that acting precipitously on the matter would do harm to the financial structure of CHC.

“What I attempted to do is provide a reasonable period of time to address this while at the same time, ending an activity that is not lawful,” Buckingham told Saipan Tribune.

When asked if the corporation and ICS are aware of the 45-day period, Buckingham said that the notice to cease and desist was stamped “received” by Babauta’s office.

In an effort “to try to work together,” Buckingham said he met with Babauta and ICS president Dan Cochran last Wednesday. He said the meeting “sounded pretty positive.”

The meeting was conducted to discuss and request documents about, among other things, ICS start-up and maximum costs, list of deliverables, strategic plan, and specific work flow to be submitted to the OAG.

“However, part of what concerns me is what happened after that meeting,” said Buckingham. “We have not seen what ICS needed to provide.”

In a statement, Gov. Benigno R. Fitial said, “I listened to the audiotape of Wednesday’s meeting and was pleased that all the parties were being respectful and constructive. There was a clear set of to-do items from the meeting. I don’t know why nothing was done.”

Buckingham again met with Babauta yesterday, this time with corporation board chair Joaquin Torres and Fitial at the Governor’s Office as part of ongoing efforts “to move the relationship with ICS to one [that is] based on a lawful contract.”

In a separate interview yesterday, Babauta confirmed his attendance at the meeting and said that they are “still working out what information needs to be submitted by ICS.”

“Once that’s completed, we’ll go from there,” he added.

Babauta noted that the corporation has been working with Fitial since the beginning to work out the legal issues involving the ICS deal. If the contract remains unapproved, Babauta said the corporation will have a time setback “and time is not in our side.

“We want to be able to generate revenue for the hospital. Any setback will be a setback in time. It will delay any further ability for the agency to generate revenue,” he said.

Speaking about the doctors who wrote an open letter threatening to resign if the ICS contract is disapproved, Babauta said the doctors only want to see the ICS contract executed given the “urgency” of the situation at the hospital.

“I don’t blame them for being concerned.They want to be able to feel we are on our way to being able to generate enough money so we can continue to operate the hospital so that they can have peace of mind in terms of their future here financially. I’m with them on that,” he added.

Board chair Torres disclosed that ICS, through Cochran, has been informed by corporation chief operating officer James Phillips about yesterday’s meeting.

“Jim [Phillips] reported to us that he did talk to Dan Cochran and that they will be submitting the documents to Saipan,” he said.

Although Buckingham’s concerns are “legitimate” and “reasonable,” Torres believes that Cochran had the information readily available during his visit to Saipan.

“I’m hopeful that the ICS can comply with the requirements and we’ll go on from there. I’m very optimistic that we can still proceed with the contract,” added Torres.