UMMS board files dis­clo­sures af­ter scan­dal

Busi­ness deals rocked hos­pi­tal sys­tem and Baltimore in con­tro­versy

Baltimore Sun - - FRONT PAGE - BY KEVIN REC­TOR

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.

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