OPA: Referral patients, escorts sent at high-cost unrestricted airfare rates

The Office of the Public Auditor has found that patients and/or escorts sent off-island under the CNMI Medical Referral Services Office’s program were being sent at high-cost unrestricted economy airfare rates.

In its audit report released last week on MRSO’s internal controls for fiscal years 2018 to 2020, OPA noted that airfares are purchased by MRSO for approved medical referral patients and escorts at standard high-cost airfare rates.

OPA recommended that MRSO negotiate and create an agreement with travel agencies to make sure that patients and their escorts are being sent on cost-effective airfare rates.

MRSO director Ronald D. Sablan agreed with OPA’s recommendation.

Sablan said a medical referral fee had been established to avoid charges on date changes, rebookings, cancellations, and reissuance fees, which depended on patient medical status. However, a new travel agency recently challenged the fixed fee. Sablan said that MRSO now deal directly with the airline and bypass the travel agencies using credit card to avail the lowest cost available and avoid such charges. Sablan said this is currently in final stage of negotiation and to be finalized upon issuance of a credit card.

In the Commonwealth Healthcare Corp.’s response, CHCC chief executive officer Esther L. Muna said they are unable to concur or disagree with OPA’s finding as they are not a party to these agreements.

OPA said these pre-determined airfare rates are for unrestricted roundtrip airfare with economy seats that ranges between $305 to $4,350 per traveler and vary across referral locations.

OPA learned that the predetermined high-cost airfare rates were considered to be “special rates” set by a travel agency through a previous agreement, but MRSO could not provide a copy of the agreement.

OPA said it requested for a copy of the agreement from the travel agencies associated with MRSO; however, none of the travel agencies had existing or previously executed agreements.

At OPA’s request, travel agencies associated with MRSO provided a listing of all airfares for medical referral patients and escorts for fiscal years 2018 to 2020.

Based on the data provided, OPA found significant disparities between the number of travelers sent to Guam, Honolulu, Manila, and San Diego in fiscal years 2018-2020. OPA said despite the disparities of travelers to these locations, the costs incurred across referral locations are comparable.

OPA said that, as a best practice, the standards state that “a control cannot be effectively implemented if it was not effectively designed.”

In addition, OPA said the standards also state that “a deficiency in implementation exists when a properly designed control is not implemented correctly in the internal control system.”

In its internal policy, MRSO is responsible for facilitating the referral of patients to recognized referral health care facilities outside the CNMI for extended medical care. This includes lodging, ground transportation, and subsistence allowance.