Muña: Millions of medical referral promissory notes were forgiven

Esther L. Muña

Commonwealth Healthcare Corp. chief executive officer Esther L. Muña has disclosed that an audit conducted by the Office of the Public Auditor in 2021 showed that the outstanding balance of the promissory notes entered by the Medical Referral Services Office beginning in 1997 with MRSO beneficiaries was estimated to be $11 million as of May 3, 2021, but that based on records pulled from the JD Edwards software system by CHCC in December 2022, the total outstanding was only about $6.4 million.

Muña expressed concern about inaccurate records as shown by the significant $4.6 million variance in a letter dated Dec. 14, 2022, to Senate President Jude U. Hofschneider (R-Tinian).

The large discrepancy in records by years is a further concern, said Muña in explaining CHCC’s justification for MRSO promissory notes write-off/forgiveness.

She said OPA noted in its 2021 audit that promissory notes were not reconciled for accuracy and completeness.

Beginning in 1968 under the Trust Territory government, financial assistance has been available to eligible CNMI residents to access off-island medical care through a publicly funded and administered service now known as the MRSO.

The MRSO has served as a travel and logistics coordinator for patients going off-island for care since its inception. The program also covers medical claim expenses for patients who meet the income eligibility requirements and have not yet met the lifetime caps.

Muña said that, according to available records, the program began entering into promissory agreements with MRSO beneficiaries who either hit the lifetime limit on medical coverage through the program; cannot afford their co-pay, or do not have insurance and do not qualify for the indigent program.

The CEO said that in June 2021, the Office of the Attorney General determined that the MRSO lacks the legal authority to enter such promissory arrangements. She said OPA recommended in its audit published in September 2021 that the MRSO should cease issuing promissory notes immediately.

Since the administration of the program transitioned from the Office of the Governor to CHCC in October 2021, no new promissory notes have been issued, Muña said.

She said CHCC does not intend to collect on outstanding promissory notes issued as the MRSO lacked the authority to issue promissory notes in the first place as determined by the OAG.

She said MRSO records indicate that every year from 2011 to 2020, the total number of patients with third-party coverage exceeds the number of patients sent through the program.

Muña said it’s possible that a number of patients were covered under more than one health insurance plan.

“The data available do not indicate what percentage of patients had more one type of health insurance, and how many had no health insurance at all,” the CEO said.

She said it is not clear that patients’ private and public health insurance coverage was maximized before medical expenses were covered by the MRSO.

Muña said it was common practice to send patients covered under Medicaid to providers that were not covered by the CNMI Medicaid program. This means, she said, that medical costs for patients may have been unfairly accrued to the $80,000 lifetime limit under the program, and therefore hit the limit sooner.

The CEO said that, as the OPA had pointed out in its audit, the MRSO has not been enforcing its processes for collections stated in its promissory notes.

She said OPA also determined that MRSO lacks standard operating procedures to identify which promissory notes have reached its statute of limitation for collection purposes.

Due to this lack, it is not clear whether MRSO patients were asked to sign promissory notes before a third-party payor reimbursement was received. She said it’s not clear whether that reimbursement would have been credited back to any promissory note the patient may have signed.

Muna said that, according to the CNMI Medicaid Agency, Medicaid was reimbursing MRSO anywhere from $70,000 to $210,000 per month for Medicaid patient referrals between 2019 and 2020.

The medical referral program is considered the payor of last resort, according to the program regulations.