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Schneider Board Backs CEO in Clash with Government

June 14, 2004 – The Roy L. Schneider Hospital board stood firmly behind its chief executive officer, Rodney E. Miller Sr., on Monday as he addressed a press conference on the hospital's efforts to deal with its debt to the V.I. government.
Stressing the importance of informing patients and the community of the hospital's current status, Miller said the $200,000 the board voted last Friday to deposit in the Hospital Revolving Fund will cover only the June 24 payroll. (See "Hospital Board OKs Government Payment".) Without the government paying some of what it owes the hospital, he said, there won't be funds for the next payroll.
"We don't have money in the bank," Miller said.
Finance Commissioner Bernice Turnbull wrote Miller and Juan F. Luis Hospital CEO Gregory Calliste in letters dated May 21 that the hospitals had until June 11 to pay outstanding balances, which she put at $4.5 million for Schneider and $5.7 million for Luis. "If the outstanding balance … is not paid by June 11, access to the Payroll Module will be denied," she wrote.
Juan F. Luis Hospital also sent the government a payment of $200,000 last week, its spokesman said on Monday.
On Friday, which was June 11, Miller met with Lt. Gov. Vargrave Richards in his capacity as acting governor and Commissioner Turnbull in an effort to work something out. (See "Schneider CEO: Government Owes the Hospitals, Too".)
Miller and his top management team, including Amos Carty, chief operating officer and legal counsel, will meet with Bernice Turnbull on June 30 — which she told Miller was the soonest she would be available — to seek a resolution to the problem.
Miller on Monday detailed the government's debt to the hospital, which he said it has "failed to acknowledge." When the hospital was first granted semi-autonomy, he said, "there was a $2.9 million obligation that the government owed for vendors prior to that. We sent the information to Juel Molloy and to the governor, and we never received a dime."
Molloy is Gov. Charles W. Turnbull's chief of staff.
The hospital has operated in good faith, Miller said, and he had hoped the government would do likewise.
At the June 30 meeting, he said, "We will demand that we be compensated for the services that we provide for the government agencies."
He said the government "owes $6.1 million to the hospital right now, and that does not include the $2 million the hospital spent in capital improvements to achieve Joint Commission [on Accreditation of Healthcare Organizations] accreditation. It does not include $1.6 million in nursing union contracts approved through collective bargaining agreements, but never funded. It doesn't include the $1.5 million in the HIPAA [Health Insurance Portability and Accountability Act of 1996] account enforced by the federal government for complete security and patient information."
And, more important, Miller said, "It does not include the $14.3 million in uncompensated care for the uninsured, those who cannot pay." He explained that RLS is a "safety-net" hospital, which means it cannot turn anyone in need of medical care away.
"On top of that, we have boarders, people with no place else to go," he said. "Human Services can't pay, so we get them. We had one last year who cost us $768,000 — that would buy a nice home — and another one who cost $150,000."
Also, he said, the territory's $6 million Medicaid cap, far lower than for the states, "was used in the first quarter."
"Over the years, there has been a shift in the position of the General Fund and the Health Revolving Fund, which is paid by the hospital," Miller said. "The transfers to the General Fund in 1996 were $82,000; in 1999, it jumped to $2.5 million. That's 297.3 percent. Meantime, the hospital's revenues increased by only 12.6 percent."
In her letter, Bernice Turnbull accused the hospital of "fraudulent action." She said she was "disappointed by the actions of your management team. Apparently, the decision was made to use other government funds which were appropriated for other government agencies. No certifying officer of this government has the authority to certify for the use of funds, unless those funds are available. I do not believe that anyone is above the law."
Miller, Carty and June Adams, Schneider Hospital board chair, expressed their offense at that language. Carty and Miller said that according to Title 33 of the V.I. Code, the government, not the hospital, is obliged to meet the hospital payroll.
"By law, we're not obligated," Miller said. "The government is obligated. We made a gentlemen's agreement that we would pay them back, and we acknowledge that." He added, "My name is not on any check that comes out of Finance."
Adams said: "I am insulted by the wording of the commissioner's letter. The use of the word 'fraudulent' — if she had thought about it, she might not have done it."
Miller said he is "insulted and disheartened" by Turnbull's tone.
"It never should have been made public," Adams said. "She could have picked up the phone," Miller said.
On Monday, Miller reiterated what he had said last week: "Semi-autonomy is the best thing that has ever happened to this hospital. I would never, never work here under any other circumstances."
The hospital was repaying the government on a regular basis until a nursing crisis hit last December, he said. "We spent $6 million on a nursing contract. That's unheard of anywhere in the nation. We come up with creative ways to cut costs, and then we are shot down. The traveling nurse company said 'No more nurses' until we pay, so nursing became our priority."
Miller said administration officials told him last year that if he cut down on the traveling nurses, "they would supply us with NOPAs [notices of personnel action, required for hiring] for local nurses." He said the hospital did reduce the number of visiting nurses, from 60 in November to 38 in May. "But they haven't done what they said they would," he said of the government "We have nurses who want to be government employees."
Asked if that was his toughest decision since coming on board in May of 2002, Miller smiled. "No," he said, "it is not. Getting everybody to work in one accord and change the face of the hospital has been the biggest challenge. This is easy; it's 'do or die.'"
Miller said he had a meeting with his department heads Monday morning. "We're a tough group," he said. "We worked rigorously to get accreditation and change the hospital. Failure and defeat are not in our future."
Adams said the board stands staunchly behind Miller."We want the public to know that we are standing firm," she said. "Any action that comes from Mr. Miller has the full support of the board."
Luis Hospital to Submit a Payment Plan
Gregory Calliste, CEO of Juan F. Luis Hospital, met with Bernice Turnbull, Molloy and other financial officers last Tuesday on St. Thomas. Gregory Davila, hospital spokesman, said Monday that the St. Croix hospital sent a $200,000 check to the government last week.
The hospital's financial obstacles mirror those of Schneider Hospital, Davila said, and several factors prevented the hospital from making "timely payments."
"We have a lot of elderly families, technically abandoned," he said. "They are an uncompensated cost of about $10 million a year. We have tried to get the Social Security system to have the money that the families get go to the hospital."
Davila said the hospital loses about $2 million to $3 million a year on uninsured patients. And at Luis Hospital, as at Schneider Hospital, "we can't deny treatment."
He said, "In the next week or two we will be submitting a plan. We paid the money and we are trying to stay current and work out some sort of an agreement to pay back the money we owe. On the one hand, the government is blaming us, but they are part of the problem."
Davila said he didn't have the figures at hand of what the government owes the hospital, but it does owe a great deal, just as it owes the St. Thomas hospital.
Echoing the words of Miller, Davila said: "Semi-autonomy is the best thing that has ever happened to this hospital."

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