July 31, 2008 — Amos Carty, Schneider Regional Medical Center chief executive officer, marched into an overflowing crowd at the auditorium of Charlotte Kimelman Cancer Institute Thursday morning, squared his shoulders, took the microphone and asked for a moment of prayer.
The crowd was assembled to hear Carty's public response to a joint federal and local audit that was released Tuesday and to a V.I. Daily News report released Monday. He said more detailed comments on the audit findings would be missing from the conference because Thursday morning Gov. John deJongh Jr. had requested the resignations of four board members — June Adams, Beverly Chongasing, Francis Jackson and Natalie Thomas — slated to address specific issues.
In his response to the audit — issued earlier this month and included at the end of the report — deJongh said he would "either dissolve the St. Thomas-St. John district board, or replace for cause, those board members who have failed to live up to their fiduciary responsibility." The governor will address the resignations in a news conference scheduled for Friday morning, Government House spokeswoman Julia Watthey said later Thursday.
Standing before the packed auditorium, Carty instead immediately addressed a sore spot, referring to the Daily News report.
"Under its headline 'Salaries First, Patients Later,' the reporters all but concluded and strongly suggested that patients seeking treatment for cancer … were unable to obtain proper care immediately either because of unavailable medications or because of non-functioning equipment," he said.
Looking straight at the Daily News reporters seated before him, Carty vehemently said he "can state with absolute certainty that no patient's life was lost due to lack of medication or treatment at the Charlotte Kimelman Cancer Institute."
Carty's statement was met with applause from many staff members, who stood pressed against the walls in the crowded room, or seated bent forward so as not to miss a word.
He also took issue with the newspaper's allegations that Renee Adams, former Kimelman administrator, was terminated and offered $80,000 in "hush money" if she agreed "not to talk about the hospital or the cancer center at any time."
Adams was terminated and "offered a severance package, which was contingent upon her signing a release," Carty said. She declined that offer, he said.
"In fact, her own attorney subsequently asked that the hospital's severance package … be put back on the table in exchange for which she would execute a general release," he said.
Carty also addressed allegations that the hospital's board had not conducted a complete background check on former Schneider Chief Executive Officer Rodney Miller Sr. before hiring him. After they tried to conduct their own search for a CEO, Carty explained, the board hired Diversified Search — a world-renowned recruiting firm — to seek qualified candidates for the position. The firm said they had turned up "no ethical or moral issues" while investigating Miller, who also came "highly recommended" from another hospital on the mainland.
The Daily News report said Miller received a dishonorable discharge from the U.S. Navy after pleading guilty to nine counts of larceny and one count each of attempted larceny and obstruction of justice for a fraud and cover-up scheme.
When asked about whether the board did their own recognizance after the search firm came back with its recommendations, Carty said the hospital took Miller's fingerprints and submitted them to the V.I. Police Department to see whether he was "in the system."
"I don't know how we missed it," Carty said when asked how Miller's conviction seemed to fall through the cracks. "I'm not sure how everybody missed it."
Miller was tapped about six months ago to head Memorial Regional Hospital in Hollywood, Fla. He resigned from the post Wednesday for "personal reasons," according to the hospital's spokeswoman.
Addressing the Audit
Carty spent the rest of his time Thursday taking issue with the methods the auditors used to obtain information from his staff. The audit report — a joint effort by the Offices of the Inspectors General of the U.S. Department of the Interior and the Virgin Islands — details the problems the auditors encountered trying to get information, which they said they finally added to subpoena. (See "Audit Claims Widespread Abuse of Schneider Hospital Funds.")
Carty said he was served with two subpoenas in November 2007: "The inspector general filed a motion in Superior Court based on alleged noncompliance by the medical center with the subpoenas. The court declined to make any findings that the medical center had acted improperly."
During the five months the auditors worked directly with the medical center staff, Carty said, they were provided with office space, computers and other office equipment, and had "unrestricted access" to all records and hospital personnel.
"In addition, medical center staff were directed to provide auditors with any assistance they might require to generate financial reports or obtain access to computerized information," Carty said.
Words and phrases such as "secrecy" and "deliberate concealment" of records are "liberally scattered" throughout the report — an attempt by auditors to create the perception that medical center representatives were intentionally trying to withhold information, Carty said.
A criminal investigation into the audit findings has been launched by the Justice Department, and hospital officials have been "fully complying" with all requests for information, he said later.
Carty also tackled claims that medical center executives did not keep up with refund payments owed to patients and used money owed to its insurers to cover expenses. Auditors made it clear early on that they had no knowledge of the hospital's insurance reporting and repayment system, and had to be trained for "several hundred hours" by hospital staff, Carty said.
"We do not over bill," added Peter Najawicz, the hospital's chief financial officer. "We set charges on what we consider to be a reasonable rate."
He added that there are 115,000 patient accounts on the hospital's system, pored over daily by "many sets of hands."
"Mistakes are human nature," Najawicz said. "That's why we send an itemized bill. But our mistakes will never be the patients' responsibility."
The audit also laid out hefty pay packages, approved by the hospital board and given to Miller, Carty and Najawicz. Government payroll documents show Carty and Najawicz were both making $80,000 a year, but hospital financial reports indicate Najawicz was pulling in at least $166,000, while the chief operating officer was receiving about $146,000, the report said.
The board approved about $2.5 million worth of payments to Miller, according to medical center documents, but Miller allegedly racked up close to $3.8 million in salary and associated perks throughout his five years at the helm of the hospital, according to the audit.
"Clearly the board made a judgment call," Carty said, when asked why Miller's salary was increased despite warnings made by an outside consultant that any pay increases could increase the hospital's financial burden. "They did what they felt was necessary at the time to retain the services of Mr. Miller. I'm not saying it was the exact right thing to do, but it was their decision and they had the authority to make it."
In a letter written to deJongh at the end of last month, Carty says hospital executives and board members concur with some of the auditor's recommendat
ions. Hospital officials will institute some policy changes and refigure the board's bylaws to strengthen reporting requirements on credit-card charges and on how refunds get processed. New policies on setting compensation for the hospital's CEO and senior management have also been adopted of late, Carty said during a recent Senate hearing.
A draft of a letter to both local and federal inspectors general was given to the media before the press conference. In it, Schneider executives said the hospital's financial reports don't match what was included in the audit report — particularly in the sections that detail how much money officials were paid and what kind of charges they made on the hospital's credit cards.
In the letter, hospital officials ask the auditors to provide a list of documents and other information that can back up what was outlined in the report.
"The audit is based on information that the hospital gave us," V.I. Inspector General Steven van Beverhoudt said when contacted Thursday evening. "That's what an audit is about — and that's what we used."
A special agent from the Inspector General's Office served Carty and hospital spokesman Sam Topp with subpoenas after the press conference was over.
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