UMMS board files disclosures after scandal
Business deals rocked hospital system and Baltimore in controversy
Board members at the University of Maryland Medical System have filed financial disclosures with state regulators for the first time since news of deals between the system and a third of its directors rocked the hospital network, dismantled its leadership team and helped take down Baltimore’s mayor last spring.
Among the 13 UMMS board members appointed this summer — 11 by Republican Gov. Larry Hogan and one each by Senate President Thomas V. Mike Miller and House of Delegates Speaker Adrienne A. Jones, both Democrats — only two, both appointed by Hogan, disclosed business with the system in the latest filings with the state Health Services Cost Review Commission.
Elisa Basnight, senior vice president of supply chain for the American Red Cross, disclosed the nonprofit organization did more than $20 million in business with the health system. The Red Cross said the payments were for the costs of
providing blood to UMMS, one system among 2,500 hospitals it works with.
“While the Red Cross does not charge for the blood itself, which is so generously donated by volunteers, it does recover the costs associated with the recruitment and screening of potential donors, the collection of blood by trained staff, the processing and testing of each unit of blood in state-of-the-art laboratories, and the labeling, storage and distribution of blood components,” the Red Cross said.
The organization said Basnight “does not and has never had any involvement in the procurement, activation or oversight of blood products or services to UMMS.”
Kathleen A. Birrane, a partner at the law firm DLA Piper who previously was the top lawyer at the Maryland Insurance Administration, disclosed the hospital system paid the firm about $12,260 for legal services. Other people at DLA Piper did the work, and the firm billed the system before she joined the board. Birrane did not respond to a request for comment.
Meanwhile, one holdover board member listed a contract with the system that earned him a commission of more than $20,000.
Korkut Onal, managing partner of the insurance firm Jones Birdsong, reported a 10% commission on a $207,000 premium during the period in question — July1, 2018, to June 30, 2019. In addition to serving on the UMMS board, to which Hogan appointed him in 2018, Onal is chairman of the board at University of Maryland Baltimore Washington Medical Center in Glen Burnie, which is part of UMMS. Onal did not respond to a request for comment.
Michael Schwartzberg, a spokesman for UMMS, said Onal’s deal was “a onetime expense” for an “unexpected, time-sensitive insurance coverage need,” and was “appropriately and timely disclosed in accordance with HSCRC requirements.”
Schwartzberg said that Jones Birdsong was the insurance broker, not the insurer, in the arrangement. He said the coverage “was competitively quoted and the lowest priced policy was purchased.”
UMMS includes more than a dozen hospitals spread across the state. It is a private institution, but receives substantial public funding, and its board and broader governance is controlled by state officials.
The board was shaken up after The Baltimore Sun reported in March that a third of its 30 members had deals with the system worth hundreds of thousands of dollars, some of which were never competitively bid. Some of the members with contracts, including then-Mayor Catherine Pugh, who’d been paid $500,000 by the system for her “Healthy Holly” children’s books, stepped down. Others were replaced after the General Assembly passed legislation mandating turnover of the board.
In April, agents from the FBI and the Internal Revenue Service raided Pugh’s homes and City Hall office, carrying out items related to her book sales, and the Democrat subsequently resigned as mayor under the glare of their investigation, which is ongoing. Meanwhile, much of the leadership at UMMS resigned, including the CEO, the board chairman, several other board members and several executives. The system promoted Dr. Mohan Suntha to CEO on Wednesday.
Thirteen new board members were named in June and July, and the system filed their disclosures Aug. 29 with the HSCRC. Board members are required to file disclosures within 60 days of being appointed. Hogan has since appointed an additional four board members; their disclosures are due in December.
UMMS this week also filed disclosures for holdover and former board members for the year ended June 30. The latest filings captured some of the same contracts The Sun reported in March, but some board members reported for the first time business between UMMS and other organizations and businesses where they also serve on boards.
Schwartzberg said out of “an abundance of caution, the system has asked board members at both the corporate and affiliate level to disclose their service on charitable and other nonprofit boards, even where the board member has no financial interest.”
In an overview document listing board members during the last fiscal year, UMMS indicated which members had business dealings with the system worth more than $10,000, marking their names with a “Y,” for “Yes.” Those without such deals were marked with an “N,” for “No.”
Every current and former board member with a “Y” next to their name on the reports posted online Monday filed a separate disclosure form outlining their dealings — except Pugh, who resigned March 18 from the board. After The Sun asked Tuesday why Pugh did not file a disclosure form, HSCRC responded with a revised overview sheet from the hospital system that had Pugh with a “N” next to her name.
Pugh had five different deals with UMMS, each for $100,000 for 20,000 “Healthy Holly” books. She has said that she returned the last payment, from 2018.
Steve Silverman, Pugh’s attorney, said he was told by UMMS legal counsel that Pugh did not have to submit a form.
“She’s not required to do it, per them,” Silverman said. Asked why she was not required to submit the form, Silverman said he “didn’t care about why.”
Schwartzberg said Pugh did not have to file a disclosure because she had returned the final payment, so that the value of deals between UMMS and Pugh for the time period in question was $0.
The HSCRC has posted most of the disclosures online, which is a new practice done at the request of legislators.