CNMI HOSPITAL COULD CLOSE IF UNPAID PROVIDERS LEAVE

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Leaders bank on land trust contribution to save health center

By Emmanuel T. Erediano

SAIPAN, CNMI (Marianas Variety, Feb. 14, 2012) – Commonwealth Healthcare Corp. chief executive officer Juan N. Babauta told lawmakers yesterday that the Commonwealth of the Northern Marianas’ only hospital may shut down if healthcare providers will walk out due to delayed payroll.

Babauta at the same time urged lawmakers to pass House Bill 17-278 which will pledge $11.58 million of Marianas Public Land Trust’s (MPLT) future interest income distribution to help the healthcare corporation’s "operation needs" and its electronic health information technology development.

By a vote of 16 to 2, the House passed H.B. 17-278. Reps. Froilan C. Tenorio, Covenant-Saipan, and Janet U. Maratita, R-Saipan, voted no while Reps. Trenton B. Conner, R-Tinian, and Sylvestre I. Iguel, Covenant-Tinian, were absent.

The bill now goes to the Senate.

CHC, according to the bill’s author Rep. Ramon S. Basa, Covenant-Saipan, does not have to get the entire amount right away.

He said $10 million will serve as the corporation’s "line of credit" while $1.58 million will be considered a loan that the hospital will use to create its electronic health information system.

Basa in an interview said the threat of some healthcare providers to walk out of the hospital was also brought to their attention.

He said CHC is in dire need of money and "we don’t want its doctors to walk out."

Babauta told the lawmakers that for last week’s payday, CHC was only able to pay essential employees — doctors and nurses. They have not paid the nurses on Rota and Tinian, and he feels "so sorry" about it.

The former governor said the corporation needs $800,000 every payday for its 600 employees including those on Tinian and Rota.

"If we don’t have this [H.B. 17-278], we will be faced with a 40 percent cut across the board," Babauta said.

He added that "there might be a walkout on the part of healthcare providers which may shut down the hospital."

After the House passed the bill, Babauta expressed his appreciation to its members especially Basa and Speaker Eli D. Cabrera, R-Saipan.

"This is very important for CHC and I appreciate the House passing this today," he said, adding that he and other corporation officials will have to make themselves available as soon as the Senate is ready to act on the measure so they can answer questions.

Once again, he added, "I emphasize the fact that we are facing a serious situation at CHC."

Asked why the corporation waited until election year to urge lawmakers to act on a problem healthcare officials already saw last year, Babauta said: "No, we’re not doing that. Please don’t inject politics into this. This is a serious matter."

Babauta said H.B. 17-278 is just a temporary measure to "carry us over so we can meet our obligations primarily to the employees."

He added, "This is not permanent solution. What we’re going to do is, as we have indicated before, we are going to beef up our system, make it work so we are able to collect more."

H.B. 17-278 pledges MPLT’s interest income starting fiscal year 2014. It allows MPLT to "withhold interest income distributions for such fiscal years as necessary to pay for and satisfy any due amounts for principal and interest due from the Commonwealth Healthcare Corp. payable to MPLT."

Babauta assured lawmakers that CHC will not incur more debts and that it will pay its loan using its own monthly earnings.

Right now, he said, the corporation continues its "aggressive collection" efforts.

Vice Speaker Felicidad T. Ogumoro, Covenant-Saipan, and Rep. Ray N. Yumul, R-Saipan, offered floor amendment before the House passed the measure.

Ogumoro’s amendment provides that CHC payments in future "are deemed earmarked and herein appropriated."

Yumul’s amendment requires CHC to pay interest to the commonwealth government.

Tenorio who voted against the bill said he supports its intention but the measure "is full of unconstitutional provisions."

[PIR editor’s note: The "line-of-credit" nature of the bill has been called a temporary solution in the short-term for the hospital. The type of loan has been described as "different from a typical loan," in that "CHC will only draw down what it needs from the total amount. This way, CHC will not have to pay for the full interest of an $11.58 million loan but only the interest on what it will actually draw down."]

The former governor does not believe the Legislature has the authority to tell the MPLT board what to do with its funding.

Also, he said, the language of the bill binds future Legislatures to it. "We don’t have that authority," he added.

MPLT is supposed to benefit people of Northern Marianas descent only, he noted. If the bill becomes law, it may be challenged in court.

Instead of coming up with a questionable measure, Tenorio said MPLT can directly help CHC through a loan, or the governor can declare a state of emergency and use MPLT funds to help the hospital.

Rep. Teresita A. Santos, Ind.-Rota, said she has talked with the unpaid employees of Rota Health Center and felt the need to help the corporation.

"The preservation of healthcare is a duty of us all," she said.

Ogumoro said the House members should also continue to urge the Senate to pass the Saipan casino bill so there will be more revenue for CHC and other critical agencies.

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