Rules Panel Approves Tabled Medicaid Windfall Bill

From left, Rules Committee Chairman Janelle Sarauw confers with Sens. Steven Payne, Myron Jackson, Novelle Francis and Oakland Benta at Monday’s hearing. (Photo Courtesy of the V.I. Legislature)
From left, Rules Committee Chairman Janelle Sarauw confers with Sens. Steven Payne, Myron Jackson, Novelle Francis and Oakland Benta at Monday’s hearing. (Photo Courtesy of the V.I. Legislature)

The Senate Rules and Judiciary Committee made a quick turnaround on Monday, convening in the late afternoon and approving the bill redirecting some $39 million in Medicaid payments that it held in committee on Friday.

The Rules Committee approval means the bill will go to a vote when the full Senate convenes in session on Tuesday, even though the same bill already appeared on the Senate session agenda Monday morning, before the Rules Committee’s vote Monday afternoon.

“It’s not a perfect bill,” said Sen. Janelle Sarauw. “Everyone is not going to get what they want or what they requested but we have critical needs.”

The $39.5 million from the Centers for Medicare and Medicaid Services is the result of an audit of cost reports for the years 2011 through 2013 that showed Medicare underpaid the territory’s medical facilities. The initial Senate bill proposed that a bulk of the amount should go to the territory’s hospitals and to the Water and Power Authority by paying down the bills the hospitals owed WAPA.

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Earlier this month, WAPA Executive Director Lawrence Kupfer told lawmakers that those payments are critical to paying its vendors and keeping the authority functioning. On Friday, Sen. Novelle Francis (D-STX) said tabling the measure would allow the committee to introduce another bill that addresses the concerns raised.

Friday’s hearing was the latest snag the Medicaid windfall bill encountered, having bounced between committees, generating controversy at every stopping point in the last couple of months. It was introduced in early May and voted out of the Senate Finance Committee before being special ordered to the Committee of the Whole. The legislation was sent back to Rules and Judiciary after hitting some objections, including the fact that the appropriation does not provide funding for St. Thomas East End Medical Center and Frederiksted Health Care, both of which provided some of the care that Medicaid was paying back.

At the time, Gov. Albert Bryan also objected to the money being used for salary raises for government employees.

According to Sarauw, Monday’s legislation, Bill No. 33-0101, is the result of “robust discussions” and input from stakeholders. It appropriates $11.7 million to Gov. Juan F. Luis Hospital and $10.5 million to the Schneider Regional Medical Center. Both hospitals have earmarked the money to pay outstanding obligations to WAPA. Another $700,000 would go to the V.I. Waste Management Authority to pay its WAPA obligations.

The remainder is distributed among various agencies, including the Department of Health, Department of Human Services and the two hospitals for repairs and negotiated salary increases.

The St. Thomas East End Medical Center and the Frederiksted Health Care get $1.8 million and $2.5 million respectively, something Sen. Donna Frett-Gregory (D-STT) said she was pleased with, in spite of concerns about how the bill was handled.

“What concerns me though is when this conversation initially came up, we surprisingly received correspondence from [WAPA vendor] VITOL demanding payment. I’m very concerned that VITOL can send us a letter requesting this money knowing what’s happening here. That’s very interesting and very timely that VITOL would be sending that letter. Seems like they have inside intel,” Gregory said.

VITOL was contracted by WAPA under Hugo Hodge Jr. to convert WAPA’s generators to burn propane, a roughly $87 million project. In November 2014, the WAPA board voted to raise the contract budget for the conversion project to $150 million. Two years later, it authorized another $10 million for the project.

Now WAPA owes VITOL $100 million, according to Kupfer, which could result in “rolling blackouts or brownouts” in the territory if unpaid within months. Gregory asked Sarauw to find out which vendors are being paid when WAPA receives the $22.2 million in payments from the hospitals.

“I suspect this entire amount is going to VITOL,” Gregory said on Monday, something Kupfer already admitted to lawmakers on June 6.

Voting in favor of the bill were Sens. Alicia Barnes (D-STX), Myron Jackson (D-STT), Javan James (D-STX), Steven Payne (At-Large), Francis and Sarauw. Sen. Kenneth Gittens (D-STX) was absent.

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