Feds find Luis improving in CMS requirements, CEO reports

ST. CROIX - Federal regulators who inspected Luis Hospital last week found that the hospital has made some progress toward meeting Centers for Medicare and Medicaid Services requirements, but it still has work to do.

Luis Hospital Chief Executive Officer Jeff Nelson offered that information on Wednesday as he gave senators a status update on Luis Hospital during meeting of the Senate Committee on Government Operations, Energy and Veterans Affairs.

The meeting was a continuation of a previous meeting that focused on issues at the hospital.

The survey by the Centers for Medicare and Medicaid Services, or CMS - which lasted for a week and ended on Friday - was among the issues Nelson discussed during his prepared testimony Wednesday.

A hospital-wide CMS inspection in June 2011 uncovered a multitude of deficiencies that needed correcting. In November 2011, Luis Hospital and CMS signed a settlement agreement that provided for direct CMS oversight of the hospital for the next three years, in order to avoid the hospital's termination from the federal program.

Under the settlement, the hospital agreed to make improvements, and CMS representatives can come into the hospital at any time to verify whether services are up to standards.

Nelson said that last week's CMS survey was focused on certain areas, including patient care, patient safety, nursing staffing and patient documentation, and was part of the monitoring the federal agency is doing under the settlement agreement.

On Wednesday, Nelson testified that regulators told officials as they were leaving that the hospital has made progress toward meeting some CMS conditions of participation, including improvements in the operating room and the surgical unit - but the progress is not yet enough to pass the final inspection.

In those focused areas that surveyors reviewed last week, the hospital still must improve documentation, increase involvement of the medical staff, improve communication and increase oversight by the governing board, Nelson said.

Nelson said Luis has until Feb. 23 to meet all federal standards.

Other items Nelson discussed in his prepared testimony included information about the hospital's financial performance getting better, updates on the hospital's implementation of changes identified in a federal inspector general's report, health insurance coverage for hospital employees and the status of the hospital's payments to the Government Employees Retirement System.

Nelson testified that Luis Hospital has paid the employee and retired employee payments it owes to GERS through Sept. 30 and is current. The hospital is behind in its employer payments to the retirement system by approximately $978,000, he said.

The hospital has worked out an agreement with GERS to pay $100,000 monthly toward the past-due amount, according to Nelson.

However, GERS administrator Austin Nibbs said that Nelson's balances were different than his. GERS shows that the hospital owes $1.23 million in principal, plus interest and fees. The $1.23 million, according to GERS figures, includes $40,185 in unpaid employee contributions.

Hospital chief financial officer Deepak Bansal said that the hospital and GERS will reconcile their figures.

Bansal said he thinks the discrepancy may stem from interest and penalties that were not part of the hospital's figures and the possibility that a hospital payment has not yet been received by GERS.

Senators also questioned the Luis Hospital board's decision last week to reign in the spending powers it gave Nelson shortly after he arrived.

The board last week voted to cut back the maximum amount - from $250,000 to $100,000 - that Nelson can authorize without board approval on contracts per vendor or employee per year.

Luis Hospital Board Chairwoman Kye Walker said Wednesday that the board made the decision because members felt they needed to scrutinize contracts more closely, in part because of CMS requirements, but also because the board had learned of two contracts that caused some concern.

Those two contracts included one for a physician that Nelson failed to get board approval for and another that contained a clause that board members had understood was not included in the contract, Walker said. Board members learned that the clause was part of the contract in a newspaper article, she said.

The Daily News published an article Sept. 18 about Bansal's contract, after receiving it through an Open Public Records Request to the hospital. Bansal was a board member before Nelson chose him as CFO.

The contract set Bansal's annual salary at $150,000 and entitles him to receive "incentive payments" of up to an additional $45,000 per year, subject to board approval, for a total of $195,000. Nelson said the clause would not be exercised at this point and that there would be no bonuses.

Other discussion at Wednesday's Senate hearing centered on the hospital's dialysis unit and conflict between hospital officials and Dr. Walter Gardiner, who established the Caribbean Kidney Center, a privately-owned dialysis unit.

Gardiner and the hospital are involved in ongoing litigation.

- Contact Joy Blackburn at 714-9145 or email jblackburn@dailynews.vi.

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