Chief Executive Officer Jeff Nelson testified that the Juan F. Luis Medical Center was still in danger of losing accreditation to receive Medicare and Medicaid payments at a hearing of the Senate Committee on Government Operations, Energy and Veteran’s Affairs Wednesday.
He said that the Center for Medicare and Medicaid Services had recently surveyed the hospital and found that it had made strides towards meeting the 23 criteria for participation in the programs, but not enough to pass final inspection.
CMS has set a deadline of Feb. 13 for all criteria to be met. Nelson has stated in the past that the loss of Medicaid and Medicare payments could force the hospital to close.
Of the improvements, CMS commended the operating room and surgical unit, but said the hospital still needed improvements in the areas of documentation, involvement of medical staff, communication and increased oversight by the governing board.
Sen. Alicia “Chuckie” Hansen seized on this last topic and questioned Kye Walker, chair of the hospital’s governing board, about a decision made at their last meeting to lower the value of contracts Nelson could enter into without board approval from $250,000 to $100,000.
Hansen had been an advocate of such a change, arguing that the CEO of the Roy Lester Schneider Hospital operated under the $100,000 cap.
Both Hansen and Sen. Celestino White construed the change as a “reigning in” of Nelson, of whom both senators openly expressed their distrust and dislike.
Walker would not go so far as to say the change was a disciplinary action, but said the board had concerns about two contracts entered into by Nelson and that they decided to keep a closer eye on hospital expenditures.
Nelson also testified about the hospital’s payments to the Government Employees Retirement System. He said employee contributions were currently up to date, but the hospital owed approximately $978,000 in employer contributions.
He said that the hospital had agreed to a $100,000-a-month payment plan with GERS to balance their account.
Austin L. Nibbs, administrator of GERS, calculated the hospital’s debt much higher at $1,540,073.52, including $309,041.26 in interest delinquency fees and lost contributions.
Deepak Bansal, chief financial officer for JFL, said they had not included interest and penalties in the number they presented, partially accounting for the discrepancy. He also said that their most recent payment for the month of September was only made a week ago and he did not believe it was represented in GERS’s figure.
Nibbs also testified that the Virgin Islands Water and Power Authority owed $6,234,946.83, including $2,954,801.46 in interest, delinquency fees and lost contributions.
Hansen suggested that the government should forgive these fees and penalties because, in order to pay them, WAPA would need to raise the rates for electricity.
Nibbs strongly opposed that idea, saying WAPA was “bound by law” to make those payments.
Hansen replied that WAPA simply did not have the money to pay it, so it was better to take it off the books and “start fresh.” No action was taken on the issue.
Nelson also testified to the committee about the hospital’s current financial situation. He said that JFL was instituting several changes regarding billing and collecting practices suggested by an audit conducted by the inspector general’s office.
He said the hospital was implementing measures to better and more quickly file insurance claims, negotiating payment terms with major creditors and reviewing rates charged for services. He said the changes had led to $4.8 million in collections in August and September, a record for the hospital.
Nelson went on to say that the hospital had made money every month for the last six months, a streak that has not been seen since 2008. He said, however, that the positive cash flow was being canceled out by the hospital’s considerable debts, leaving no money for capital improvements.
The hospital owes $37 million to various vendors, many of whom have JFL on a credit hold and are demanding cash-up-front payments for supplies. Nelson said this puts the hospital in a precarious position and renewed his request for greater government assistance.
He said that the hospital’s yearly appropriation only covered $19 million of the $29 million worth of free care JFL provides to the community.
Hansen grilled Nelson on a wide range of other issues over the course of the day. She asked him why the hospital had not entered into a cooperative purchasing agreement with local doctors to lower costs.
Nelson responded that the hospital had entered into an agreement with a bulk purchasing company that services several hospitals, resulting in savings of $1 million on pharmaceutical and supply purchases.
Hansen said she would still like to see some type of agreement with local doctors that could help lower their costs.
At another point in the hearing, Hansen asked Walker if she was aware that Nelson had ordered all Bibles removed from the hospital.
“I don’t know anything about that and I don’t believe that to be true,” Walker replied.
Hansen said she had heard from hospital employees that they had been ordered to remove Bibles from the premises.
A clearly befuddled Nelson said he had never given any such order and had no idea what those employees may have been referring to.
“So our Bibles will remain in the hospitals,” Hansen said.
“I’ve never … yeah. Yes,” he replied.
When the committee reconvened after the lunch recess, Nelson said he was in contact with his staff and learned that a group wanting to bring in Gideon Bibles had been told that they could do so provided the Bibles were sterile. Apparently there was concern that if the pages were moldy, they could expose patients to disease. No effort was made to remove existing Bibles or to prevent clean Bibles from coming in.
Hansen responded that she believed “Bibles don’t get germs” due to their sacredness.
Hansen also questioned Nelson extensively about the hospital’s plan to outsource its dialysis unit.
Bansal testified that the dialysis unit was not profitable, costing the hospital $1.6 million dollars a year. He said that when a dialysis center operated as part of a hospital, it has to meet higher standards to be accredited by CMS than a stand-alone center. This leads to higher overhead.
Nelson said that it was the norm across the country for dialysis centers to operate independently from hospitals for this reason. JFL had therefore put out a request for proposals for companies to take over care for the hospital’s dialysis patients.
Hansen called on Dr. Walter Gardiner, proprietor of the Caribbean Kidney Center, to testify on the matter.
Gardiner is currently suing JFL concerning its connection to his dialysis center. In 2010, the hospital’s dialysis unit was closed by CMS and the hospital contracted with CKC for dialysis services. Gardiner goes on to claim that in February 2012 he was “fired” by the hospital and a month thereafter the CMS restrictions were lifted and many of his patients left CKC to seek care at the hospital.
Gardiner claims that he was fired in order to put pressure on CMS to lift the restrictions and that the affair was an attempt by Nelson to put him out of business. He claimed that he was only the first to be targeted, and that Nelson intended to absorb or drive out of business every private practice he coveted on the island.
Nelson replied that Gardiner had not been fired because he was not an employee. Rather, Gardiner had had his privileges to practice at the hospital revoked. Nelson said that a medical provider’s ability to practice at the hospital was determined by a board of their peers, not by himself or the board.
Nelson said he would not go into detail, due to privacy issues, but that a series of events concerning Gardner had taken place at the hospital that ultimately led to other doctors at the hospital voting to revoke his privileges, essentially banishing him from the hospital.
Walker went on to say that, in 2010, the hospital had intended to outsource its dialysis unit directly to CKC, but many of their patients revolted.
“We had a number of patients who insisted they would not go to the Kidney Center. We had patients say they would rather die – rather die – than go to the Kidney Center,” she said.
Walker said that the patients opposed to CKC held meetings and even went on the news to voice their dissent. Ultimately, she said, the board had no choice but to listen to their concerns.
Gardner said that patients who opposed him clearly had never been treated by him. He said that the public had a “misperception of what I’m all about,” and that his reputation had been tarnished by false rumors.
Hansen said that if the dialysis unit was to be outsourced, she would prefer to see it taken over by Virgin Island doctors and encouraged JFL to consider CKC. Walker and Nelson responded that CKC had been allowed to submit a proposal but declined to do so. They also said that two of the proposals they’ve received were submitted by local doctors.
In other business, the committee voted on four bills that would grant exclusive franchises to taxi companies to operate at the territory’s various airports and ferry terminals.
White championed the bills, portraying them as a means of protecting small business owners from the moneyed interests of the larger hotels who would prefer to run shuttle services to and from the airports.
In written testimony, the Department of Tourism and the U.S. Virgin Islands Hotel and Tourism Association strongly opposed the measure, claiming the monopolies led to poor customer service and higher rates.
The bills would give taxi company’s 10-year franchises with an option for the companies to renew for another 10 years. The ports would be assigned as follows: Henry E. Rohlsen Airport to the St. Croix Taxicab Association, the Austin “Babe” Monsanto Marine Terminal to St. Thomas Taxi Association, the Urman V. Fredericks Marine Terminal to the East End Taxi Association, and the Cyril E. King Airport to the Virgin Islands Taxi Association.
Sens. Hansen, White, Terrence Nelson and Janette Millen Young voted in favor of the bills. They were forwarded directly to the floor for final approval.