Feds inspecting cash-strapped Luis Hospital

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ST. CROIX - Federal regulators showed up at Luis Hospital on Monday morning to conduct a full inspection of the facility.

In a statement released late Monday afternoon, the hospital announced the survey by the U.S. Centers for Medicare and Medicaid Services, or CMS, saying that three inspectors arrived at the hospital Monday morning to start the evaluation.

A fourth CMS representative is scheduled to join them today, and the inspection is expected to last through Friday, according to the statement.

Luis Hospital Interim Chief Executive Officer Dr. Kendall Griffith said the evaluation is twofold, to follow-up on CMS' last inspection in January and to look into a complaint about the hospital that the federal agency received.

"We don't know what the complaint is," he said.

CMS previously has warned that the hospital is in danger of losing its certification.

The inspection punctuates a week in which the hospital missed a scheduled payday on Wednesday and paid employees on Friday instead after the V.I. government provided a temporary bailout with a cash advance on the hospital's December allotment. Then on Friday, Griffith announced 8 percent pay cuts across the board for all employees and fired his chief financial officer and 14 other staff members.

It was the third round of dismissals at the troubled hospital - which owes more than $42 million to vendors and has less than a day's worth of cash on hand - in less than two years. Most of the layoffs were from non-clinical areas of the hospital, including the Human Resources Department, the Maintenance Department and Housekeeping.

The terminations left the hospital without a financial management team.

Griffith said he fired the chief financial officer, Deepak Bansal, and an assistant chief financial officer. The hospital's remaining assistant chief financial officer then resigned effective immediately, Griffith said.

Bansal has not returned calls from Daily News.

Under V.I. Code, the hospital CEO is empowered to appoint and remove the medical director and the CFO but must do so "with the advice and consent of the respective District Board."

However, Luis Hospital's board - with nine seats but only three members - does not have a quorum and so cannot conduct business.

Griffith said on Monday that he spoke with Dr. Anthony Ricketts, the acting chairman of the Luis Hospital board, before terminating Bansal.

"I spoke with the acting chair," Griffith said. "He was in agreement. He discussed it with the district board."

Ricketts did not respond to a request for comment from The Daily News.

Griffith said he also informed Ricketts on Friday about the departure of the rest of the financial management team.

Government House spokesman Jean Greaux Jr. said that when Gov. John deJongh Jr. spoke with Griffith and hospital managers during a lengthy visit on Wednesday, he was made aware of impending layoffs - but the conversation did not go into the specific positions to be laid off.

"His greatest concern is that the hospital can continue to provide quality medical care to the community," Greaux said of the governor.

After it became clear that the hospital no longer had a financial management team, the governor did talk to Griffith, according to Greaux.

"Over the weekend, the governor did share his concern about the financial management team at JFL being part of the layoffs and was assured by Dr. Griffith that the hospital will be hiring two persons with extensive backgrounds in financial management of health care institutions shortly," Greaux wrote in a response to Daily News inquiries.

Griffith said on Monday that he is talking to a candidate to take the position of acting chief financial officer.

"I have not hired anyone. We are talking to a potential acting CFO to serve a few months until we can get a permanent CFO through a search," he said.

He would not, on Monday, confirm who that person is.

Griffith said that there is a plan for the acting CFO and for the operations of the hospital's Finance Department but that he could not speak about it at this point.

"We do have a plan. I'm not at liberty to discuss yet," he said.

The Finance Department is continuing to operate, according to Griffith.

"We have not stopped," he said. "We are still billing. We are still coding. We are still collecting."

The hospital has only two certifying officers who are authorized to sign checks - Griffith and hospital board Finance Chairperson Wallace Phaire.

Phaire declined comment on Monday.

Griffith said that there was a discussion with board members about getting more certifying officers on Monday. It was not clear how that would occur without a quorum to conduct business, unless the territorial hospital board meets to take action.

Regarding his decision on the 8 percent cuts, Griffith said Monday that he had not received any complaints or grievances from the unions.

"If they do come, then we will have to deal with them as they do come," he said.

The 8 percent pay cut that all V.I. government employees, including hospital employees, experienced for two years - full salaries were restored in July - was done legislatively.

Unions sued when that measure was implemented. It was not clear Monday what the reaction would be to Griffith's decision to go back to the salary cuts for hospital employees.

Griffith said he is trying to make positive change at the hospital.

"We cannot be expecting to do the same thing over and over again and expecting a different result. Change is not easy, but change is necessary," he said. "In order for Juan Luis to become viable, we have to make some substantial changes in the way we operate."

A CMS spokesman who The Daily News contacted Monday morning did not answer basic questions and said he had been unable to even confirm whether the inspection was occurring.

Luis Hospital has been under the regulatory microscope and intense scrutiny by CMS in recent years.

In November 2011, after an inspection uncovered a multitude of deficiencies, hospital officials signed a systems improvement agreement with CMS, aimed at forcing the hospital to correct the deficiencies so that it could maintain CMS certification. Thus far, the hospital has not achieved compliance with the agreement.

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

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