New CNMI Hospital Corp. CEO: ‘Failure Is Not An Option’

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Muna, governing board to put full attention on certification issues

By Tammy Doty

SAIPAN, CNMI (Marianas Variety, May 1, 2013) – The Northern Marianas Commonwealth Healthcare Corporation’s (CHC) newly appointed interim chief executive officer, Esther Muna, told the media yesterday that "failure is not an option."

The statement came on her first day in the executive post in response to CHC’s most pressing concern: maintaining federal certification.

The NMI’s lone hospital has just 60 days left to correct the remaining Centers for Medicare and Medicaid, or CMS, citations.

A loss of CMS certification would mean a loss to the hospital of over $10 million in yearly funding, which in effect would shut the facility down.

As we move toward June, CHC is expecting a CMS site visit although the exact date is not announced beforehand.

The hospital leadership understands that CHC must pass the impending re-survey and are working furiously to rectify the remaining CMS citations.

The corporation avoided its last de-certification date in February by proving it had rectified the three immediate jeopardy citations issued against it after a Sep. 2012 site survey.

To date the hospital has spent over $4 million in the effort to meet CMS’ conditions of participation, or COP, but Muna noted they will need to spend much more in the next two months.


In a press release and memo to CHC staff yesterday, Muna’s interim CEO appointment was announced.

The new CEO immediately convened a staff assembly to deliver a message: "The past is gone, we must move forward as a team."

Remarks emphasized improved patient care, exceptional customer service and sustainable healthcare for the islands.

Muna underscored that her role as interim CEO was "temporary" and that she does not seek the position permanently.

In the meantime, however, Muna committed herself to making the "difficult decisions" now that she has been vested with full authority.

Working in tandem with Muna is controller Cora Ada, who’s in effect acting as chief financial officer until a final decision is made on filling that key position.

While CHC is still in need of a long overdue strategic plan, Muna noted it wasn’t an immediate priority.

"Decisions must be made with and among the hospital’s directors as to the long-term direction of the hospital and we’ll address that soon enough and work with the advisory board to finalize the plan," Muna said.

Next steps

Now that the official CEO change is complete, Muna and the governing body, or GB, must turn their full attention to satisfying the federal COPs before the summer re-survey.

Comprising the GB are Muna, Ada, director of medical affairs Sherleen Osman and University of Hawaii’s Dr. Norman Okamura who serves as a non-voting adviser.

This decision-making body will delegate implementation and accountability to director of hospital services Karen Buettner.

Also under revision is the hospital’s organization chart that will clearly define areas of responsibility; a long-term problem at the corporation that resulted in finger-pointing and a general lack of accountability.

Muna made clear that no wholesale staff changes are in the works as the hospital implements the crucial organizational changes.

She noted receipt of a "courtesy resignation" from one employee but said she had declined to accept it.

"While mistakes were made it is also true that directors were never given a ‘position description,’ so how could they be effectively evaluated when the organization had no clearly defined roles and staff didn’t know exactly what their responsibilities were."

Critical funding

As the corporation re-tools and seeks to fix the remaining federal COP problems the bottom line is money.

Currently the corporation has some $4 million in its bank account and is collecting $700,000-$900,000 monthly, a big chunk of which comes from CMS reimbursements.

CHC was hoping for a larger FY 2014 government appropriation above last year’s $1.9 million, but the governor and lawmakers seem in no mood to grant the request.

In a statement to Variety, Governor Eloy S. Inos defended the amount by citing the balanced budget CHC submitted to his office a few weeks ago.

"As a corporation, the CHCC has averaged $32 million in revenues generated annually… [so] the proposed additional $2 million ends up [giving CHC] an annual budget of $36 million."

Former CHC CEO Juan N. Babauta was roundly criticized by the board for an "unreliable budget" that misrepresented the hospital’s financial condition by balancing revenues and expenses at $34 million.

The problem with that financial picture was it assumed the government would cover the $9.9 million of unreimbursed costs of care for Medicaid, indigent and prison patients.

At this point in time, those millions are clearly a black hole in CHC’s bottom line.

The corporation is currently working with a financial adviser to produce a fact-based budget, but it may be too late to convince the NMI government that the hospital needs significantly more financial assistance while the facility struggles to stabilize itself.

Muna recognized that the $1.9 million proposed government subsidy "may not look like a strong signal of support" to the feds but remained realistic.

"When the revised budget document is ready we’ll present it to the Legislature, but CHC has to leverage what resources it has to do best we can… it’s going to be hard work."

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