Official: CHCC has to choose between paying CUC or providing health care

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DUE to lack of funding, the Commonwealth Healthcare Corp. has to choose between providing people with medical care or paying the Commonwealth Utilities Corp., CHCC Chief Executive Officer Esther Muna told senators on Tuesday.

CUC said starting on Sept. 8, it will disconnect CHCC from the CUC power grid for six hours each day, adding that the accumulated unpaid utility bill of CHCC now amounts to $35 million.

In July,  CUC demanded at least a $5 million payment. CHCC was able to pay $2.5 million after getting funding assistance from the administration.

Appearing before the Senate Committee on Fiscal Affairs on Tuesday, Muna urged lawmakers to help CHCC.

“There are some people coming in who need medicine or some people who [incur medical expenses amounting to $20,000], so sometimes we have to say  that CUC needs to wait,” Muna added.

She told the lawmakers: “Help us make the decisions easier. If you can do that for us, that would be great so we don’t have to choose between CUC and providing care to  patients.”

For fiscal year 2021, CHCC, an autonomous public corporation, is hoping to receive a $33 million subsidy from the central government.

“There is a need to continue funding CHCC,” Muna said. The CHCC request will “basically [address] the…situation that we are in now. You have to remember that the health of the community is not only CHCC’s responsibility. It is the responsibility of the government,” she added.

In a July 27, 2020 letter to the CUC board, CHCC board chair Lauri Ogumoro said the healthcare corporation is working with the governor and the Legislature to receive what the CNMI government owes CHCC for services provided to Medicaid beneficiaries, other low-income residents and government agencies.

She said CHCC has essentially been paying the Medicaid state match on behalf of the CNMI government since 2012.

“From 2012 to 2019, the CHCC has not received reimbursement from the CNMI government for nearly $72 million in services rendered to Medicaid beneficiaries,” Ogumoro stated in the letter.

She added that the CNMI Department of Corrections and the Department of Public Safety, for their part, have outstanding debts to CHCC of more than $3.1 million.

There were also appropriations from past budget laws that were not implemented, Ogumoro stated. These include:

  • Public Law 20-67, the FY 2019 budget. About $9.6 million was appropriated to CHCC, but to date only $1.6 million or 16% has been received.
  • $500,000 was appropriated to CHCC by P.L. 21-20 for medical equipment, but none of these funds have been received. “This left CHCC to come up with the funds needed for equipment replacement, upgrades and maintenance on its own,” Ogumoro said.
  • P.L. 20-11 requires public corporations and other autonomous agencies to pay 1% of their total operations for FY 2019, which is estimated by CHCC to be approximately $1.8 million, for the payment of CHCC’s past due utility bills. “None of these funds have been applied to CHCC’s debt to CUC,” Ogumoro added.
  • P.L. 18-71 appropriated $3.2 million to the outstanding debt of CHCC to the public utility. “This amount has yet to be credited despite being paid,” Ogumoro said.

CHCC chief financial officer Derek Sasamoto said the hospital operates on shortfall every year, adding that CHCC has been subsidizing the uncompensated care of the community in the amount of  more than $20 million a year.

“If…we cannot make it in terms of payroll and maybe covering medical supplies, what decision do we make? Do we cut providers? Do we cut services? Do we not pay medical suppliers, and then pay our utility bill, which is [a] government-to-government [transaction]?” Sasamoto asked.



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