State officials violated self-dealing contracts between the University of Maryland Medical System and board members are requesting affiliated hospitals to the health network to reform their board practices, as well as following a Baltimore Sun inquiry.
UMMS suffered from the confusion of lawmakers that the medical system had entered into contracts with companies of almost one third of its board of directors – particularly because some were not tendering. The resulting resignation of seven board members, including UMMS CEO and Baltimore mayor.
The General Assembly adopted a law last month, signed by Gov. Larry Hogan, who prevents any source dealing with the system, requires the full board to enter into contracts with member companies and to enable all board members to resign by 1 January.
Now, Hogan and state makers are calling for the 10 separate partners within UMMS to reassess business links with their own unpaid board members, totaling millions of dollars in total, and to consider the same sweeping reforms.
“The governor hopes that the new UMMS board will introduce stricter ethics standards, and extend these standards to affiliate hospitals,” said Michael Ricci, spokesman for the Republican governor. “These are non-profit institutions established for the benefit of the public, not for personal enrichment.” T
Nic Kipke, Leader of Minority House, said that UMMS hospitals are trying to “get their actions together as it relates to inappropriate contracts” before the next legislative session in January. “If I was in my shoes, I'd like to eliminate anything like self-dealing or single-source contracts.” T
Over the past five years, some board members in affiliated hospitals have reported business links with the institutions they regulate, according to The Sun's review of members' disclosure forms filed with the Maryland Health Services Cost Review Commission. A spokesman for UMMS said there were competing offers on some dealings but they did not address others.
Most affiliated board members did not report any exposure in recent years. In 2018, of over 130 board members in the affiliates, 14 disclosed business dealings as required by state rules.
They include some of the best developers and property owners in the region, telecommunications executives, insurance administrators and doctors with medical practices. Some UMMS board members also have substantial business with the affiliates.
Chief Executive of Timothy J. Regan and founder of St. John's Edward St John's Properties are board members of the University of Maryland Medical Center, the UMMS mainstream hospital in Baltimore. In Harford County, a leading businessman Richard P. Streett serves as a board member for the Chesapeake Upper Health University system of Maryland, which oversees Harford Memorial Hospital.
The three people – who contributed to various candidates in Maryland – reported that their firms are dealing with a medical system.
Regan reported that “Whiting-Turner, a national construction company based in Baltimore County… has several size building contracts… in some system hospitals.” He added value to the work at over $ 100,000, but not exact figures were required. to provide. The UMMS projects which the company discussed in public were evaluated in millions.
Another executive of Whiting-Turner, Frank Palmer, serves on the board of the University of Maryland Joseph Medical Center in Towson.
St. John and Streett reported hundreds of thousands of dollars in business dealings with the Chesapeake Upper Health system. The system leases commercial space from its companies.
A number of doctors' affiliated board members – some of whom hold high-level positions in the UMMS institutions – reported that their practices had contracts with the institutions they oversaw, which represent hundreds of thousands of dollars.
Michael Schwartzberg, UMMS spokesperson, said that “a review of contracts being carried out by an independent system of consultation on the whole hospital system is“ board-level ”focused,” but Nygren Consulting, California identified “best practices and recommendations ”will be shared with UMMS affiliate boards.
He said, “said that these boards have the autonomy of selecting members based on many factors, including the relevant local expertise of individuals and the needs of the respective organizations.” T
Schwartzberg said that some of the contracts that affiliated board members had before the board service of those members. He said that others – including Streett – are in line with “fair market value,” a standard for tax exempt organizations. The IRS accepts that these dealings are “reasonable” if non-profit documents document their valuations and the company's representatives do not vote on the transactions.
Schwartzberg said that Whiting-Turner had a business with the system before Regan entered the UMMC table in 2015, Palmer joined St. Joseph in 2016, and the two men themselves changed from board discussions about their business projects. He said that there had been competitive bids for Whiting-Turner contracts with UMMC, but he did not answer questions about the company's contracts with other system hospitals.
Schwartzberg said that Chesapeake Upper real estate lease was with St. John Properties in advance, and was exposed at the time, the appointment of St John to the UMMC board in 2018. He stated that the market was at fair market value but did not state whether a competitive tender was made.
The new law relating to UMMS requires that state auditors review UMMS board members contracts. It is over-subscribed by state and local elected officers from board members, and limits ten years to board tenancies.
The law is not able to mandate amendments to the system's affiliated hospitals. However, Sen Jill Carter's sponsored bill, Baltimore Democracy, said that the changes should apply to the affiliates.
This week, Kipke, Republican of Anne Arundel County, and other legislators said they are hoping to file legislation to reform the boards of affiliated hospitals if they do not implement similar reforms.
“We accept that the message has been received. We accept that this will release to the affiliate boards, ”said Del. Shane Pendergrass, Howard County Democrat and chair of the House 's health and government operations committee. “But if we see it, it's obvious we will see what we need to do.” T
Kathy Szeliga, the minority whip who also sits on the health committee, said that other hospital systems operating in Maryland should be reviewing board contracts.
“This issue is a good thing for the UMMS board to give an insight into all the hospital boards – whether they are in the UMMS family or under another umbrella,” said Baltimore County Republican.
The minister started on UMMS in March after Carter introduced his bill and the Sun reported that nine board members had lucrative contracts with the system, including the Baltimore Democratic Mayor. The Sun subsequently reported that 10 board members had a contract at no cost.
Since then, system officials have acknowledged that some of these contracts are single source contracts – including Pugh's “500 Holly” self-published books. However, they did not provide data, pending the internal review.
UMMS Chief Executive Robert Chrencik and UMMS board chairman Stephen Burch have since joined Pugh and other board members to resign. Pugh also became a mayor of investigations by federal and state authorities. Other board members are absent.
Former Democratic State Sen. Frank Kelly, who holds a million dollar value on system-wide contracts by his family insurance company – administering insurance plans primarily employed – gave leave of absence from the UMMS board, and chairs Shock Trauma's board of visitors. and the chairman of the board at St. Joseph's Medical Center. His son, David Kelly and John Kelly, took leave from various boards within the system and from the University of Maryland School of Medicine.
The Kellys said they welcome the UMMS review. John Kelly said last month that Kelly's officials disclosed the company's business links with UMMS, which reported to the IRS that Kelly's insurance programs are “cut at or below market value.” T
Whiting-Turner recently announced for subcontractors for two projects with St. Joseph's Medical Center, including the refurbishment of last year's MRI room and rooms for surgical procedures this summer. Last year, Whiting-Turner was awarded a $ 5.2 million project to refurbish the sixth floor of the University of Maryland Medical Center Town Center, according to a company document.
An executive assistant with Regan said that the CEO does not speak to the media, and that it could not be found otherwise.
St. John reported on his state exposure form that builds Riverside Corporate Center LLC, a company affiliated with his real estate firm, commercial space to Upper Chesapeake Health in Belcamp in Harford County. The value of the lease is listed as more than $ 100,000.
Representatives of St John did not return calls for comments.
Streett, a business man and developer Bel Air, acts as treasurer for the Chesapeake Upper health board. The commercial company has rental contracts with the system for years.
Streett 50 percent of Rock Glenn Commercial LLC, owns the Swan Creek Village Center in Havre de Grace in Harford County, according to its exposed forms. The center and its partner, Robert Hockaday, have rented space in the center for patient offices and accounting and marketing offices for Upper Chesapeake Health and Harford Memorial Hospital. The system paid almost € 600,000 to Streett for the rental system in each of the last four years, including $ 614,870 last year, according to its disclosed records filed with state officials.
Streett did not reply to comments.
Schwartzberg, UMMS spokesman, said the terms of Chesapeake Upper Health's Rock Glenn Commercial “at fair market value and benchmarked on a regular basis.” He also said that “Hockaday handled all business dealings” and “all disclosures and recit followed protocols. ”He said the contracts came after Streett came into the board.
As well as their board seats and contracts, Regan, St. John and Streett have put thousands of dollars in recent years with political campaigns in Maryland.
The construction and real estate deals are a part of the system contracts or financial interests held by UMMS affiliated board members, according to The Sun's exposure review.
In 2016, Republican Republican Andy Harris, a board member in St. Joseph's Medical Center, reported that Tidewater Anesthesia Associates earned $ 6,000 from part-time work as an anesthetist at the Shore Medical Center in Maryland, Easton. In 2017, he reported that he received $ 5,000 to $ 10,000. His office did not respond to requests for comments.
Comcast Mary E. McLaughlin is a UMMC board member. She said the company provides "telecommunications services for various entities within the University of Maryland Medical System." McLaughlin said that "the company has worked with the University of Maryland for years," but she put questions to a representative. means that could not be achieved Schwartzberg said that in April 2018 McLaughlin joined the UMMC board, “when Comcast already had a well-established business relationship with the hospital.”
UMMS board executive August Chiasera is an executive at M&T Bank, which provides fund and deposit management services to the system, UMMC and the Town Center Campus, St. Joseph's Medical Center and other UMMS operations. Chiasera, who took leave from the UMMS board, ordered questions about the bank's contracts with UMMS. The bank reported to the regulators that its relationship with UMMS created $ 4.4 million in interest income and banking fees for the year ended June 30, 2018.