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Fee hikes anticipated as work hour cuts are rescinded

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, April 17, 2012) – LBJ Medical Center in American Samoa has rescinded this past weekend the reduction in working hours for certain employees while the hospital is now working on a somewhat "higher facility fees" increase with more information to be released once the fee levels are determined.

These two issues were cited in an e-mail yesterday morning from hospital chief executive officer Michael Gerstenberger to LBJ employees, updating the workforce on recent discussions with Gov. Togiola Tulafono and the status of the various austerity measures implemented by the hospital in February this year. (Gerstenberger released to the news media his email to employees).

The austerity measures were required by the governor in order for LBJ to receive the $3 million loan from the American Samoa Government (ASG) Workmen’s Compensation Account, with $1.5 million released in February once the agreement was signed and the other half released recently.

The loan is being repaid with the new 2 percent wage tax and once the loan is paid off revenues collected thereafter are to be earmarked for LBJ operations.

Gerstenberger informed LBJ personnel that the hospital has now received the entire $3 million of the loan from the ASG. "We have also complied with all of the terms of that loan and, as a result, the Governor issued us a letter late last week, relieving LBJ of the terms of that agreement," he said.

(Samoa News still maintains there is no loan to LBJ — there is a loan to ASG from its Workmen’s Compensation Account, which is to be repaid by the new 2 percent wage tax. LBJ does not owe the money to ASG; ASG must pay back the money it took from the account.)

Employees were further informed that effective pay period starting Apr. 15, the mandatory hour reduction for all hourly-paid employees is rescinded and employees will now be able to work and be paid for their normal hours.

"Similarly, all contract and exempt employees who entered into a voluntary wage reduction agreement may request that those wage reductions be terminated," said Gerstenberger.

Another change is that effective this Friday (Apr. 20) all outpatient clinics which had been closed on Fridays will be open on Fridays and will resume their normal working hours.


"We will be working on implementing new, somewhat higher facility fees," he said. After the fee levels are determined, we will post notice of the proposed changes and observe the required waiting period, as required by the Administrative Code of American Samoa."

"We anticipate these new fees will become effective sometime in May," he said. (He told the news media that when the new facility fees are finalized "we will let you know.")

The Fono did not come up with an additional financial aid package for the cash-strapped hospital, and the governor had warned that he may end up telling LBJ to go ahead with their fees hikes, if the Fono during the special session — which ended last week — failed to approve money bills for the hospital.


Despite the good news that LBJ has received all of the $3 million loan money and the reduction in working hours has been rescinded, Gerstenberger said, "it does not mean that we are out of financial difficulty."

"As you know, we received no additional financial aid as a result of the Special Session of the Fono," wrote Gerstenberger to LBJ workers. "The governor was very clear that, aside from our appropriated subsidy, we should expect no additional money from the ASG this fiscal year."

"Therefore, we must continue other restrictions on our spending such as limitations on hiring, restrictions on travel and very limited capital purchases," he said.

"Volume in most departments is down: therefore it is incumbent upon all of us to assure that our staffing and expenditures reflects that lower level of activity," he said and thanked LBJ’s workforce for their "cooperation and understanding during this difficult time."

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