Luis board votes to limit Nelson's spending power
Published: September 27, 2012
Font size: [A] [A] [A]
ST. CROIX - The Luis Hospital board on Wednesday reined in the autonomy it had given to the hospital's chief executive to execute contracts.
The board voted to limit the authority of Chief Executive Officer Jeff Nelson to execute contracts to a maximum of $100,000 per vendor, per year. The limitation extends to employee contracts as well.
In March 2011, less than two months after Nelson took the job, the board unanimously passed a resolution declaring a financial state of emergency at the hospital.
As part of that resolution, the board allowed Nelson to execute contracts up to $250,000 without coming to the board. It also allowed him to approve contracts in an expedited process, without putting them out to bid.
The measure the board approved Wednesday reins in that authority, limiting the contracts Nelson can execute to $100,000 per vendor or employee, per year.
The motion was made after the board came out of an executive session at the end of a lengthy meeting Wednesday night.
Board chairwoman Kye Walker said after the meeting that the decision was "based on the recent need of the board to scrutinize more carefully contracts that have been executed in recent history."
She declined to elaborate further.
Also after the executive session, the board voted to select Premier LLC to be the independent expert overseeing the hospital's implementation of a settlement agreement with the Centers for Medicare and Medicaid Services that requires the hospital to make major improvements.
Marsh Consulting previously had the contract to be independent expert, but that contract ended in July, officials said.
CMS will have to approve Premier as the independent expert before the contract is executed, Walker said.
Discussion during the regular meeting indicated that three companies had submitted bids to be the independent expert and that Premier's bid was for $275 per hour for the service.
The hospital was familiar with Premier, as the company already conducted a mock CMS survey to help the hospital prepare for the real thing.
The real thing, it turns out, is going on right now.
CMS inspectors have come to Luis Hospital to do a focused survey on issues that include patient care, patient safety, nursing staffing and patient documentation, Nelson said. The survey is part of the monitoring CMS is doing as part of the settlement agreement.
Officials said CMS inspectors came in on Saturday and will be here until Friday, when they will do an exit interview with hospital officials about the inspection.
In other discussion, Chief Financial Officer Deepak Bansal told the board that the hospital continues to be "in dire need" of money for improvements and for operations.
"To deliver quality patient care, we absolutely need capital, capital, capital," he said.
As part of his report, Bansal told the board that the hospital has been leaving money on the table. He asked for, and received, approval to implement a $2,000 set-up fee for the operating room that will be added to the hospital's list of patient charges. Other hospitals have similar charges, he said.
Bansal said that the operating room has high overhead costs and the hospital needs to recoup more of those costs.
Board member Imelda Dizon expressed concern about the expense and its effect on patients, and suggested starting with a set-up fee of $1,000, but the board ultimately voted to allow the $2,000 fee.
Director of Cornerstone Services Peter Abrahams told the board that the V.I. Water and Power Authority's new Levelized Energy Adjustment Clause rate will hit the hospital hard.
The hospital's WAPA bill averages $350,000 per month, and likely will go up by approximately $66,500 per month because of the new LEAC rate.
"That's going to be a tremendous burden," he said.
According to Senate testimony earlier this month, the hospital owes WAPA in excess of $7 million, although the government intends to pay off past-due WAPA bills with some of the money from a recent borrowing.
The board also welcomed Dr. Anthony Ricketts, a local pediatrician, as the new physician board member.
Among other actions, the board:
- Approved a revised 2012 performance improvement plan and an environment of care plan.
- Approved August financial reports and a capital budget plan for 2013.
- Approved writing off $8,653,531 in accounts receivable. The write-off is an end-of-year accounting measure only, and does not affect collection efforts, which will continue, Bansal said.
- Approved developing a discount policy for self-pay patients in which, once they have paid 60 percent of their bill, the remaining charges will be removed from the bill, as an incentive to pay. The discount is similar to the types of discounts that hospitals may have with insurance companies.
- Approved using BKB CPAs to do the hospital's external audit, at a cost of $185,000.
- Contact Joy Blackburn at 714-9145 or email email@example.com.