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‘CUC customers subsidizing hospital’

Posted on Jul 24 2020

Right now, the Commonwealth Healthcare Corp. owes the Commonwealth Utilities Corp. nearly $36 million that keeps growing by about $400,000 per month, according to CUC. That owed amount, CUC said, is impacting the utility company’s ability to provide power, water, and wastewater services to the community. It has now come to a point that CHCC must pay CUC at least $5 million by Aug. 6, which is in two weeks.

These points were outlined in a letter dated July 6 that CUC sent CHCC, saying that CHCC has an outstanding balance of $35,742,570.93 that is growing by the month. CHCC board of trustees chair Lauri Ogumoro said they are working to get the money, that they are due to meet with Gov. Ralph DLG Torres today at the Office of the Governor on Capitol Hill “…and hopefully, we will have more information from there.”

CUC pointed out that one way for the hospital to keep its power costs down is by running its own generator for at least six hours a day. “CHCC is capable of storing fuel for its generators for reserve and back-up use. In short, CHCC possesses the necessary infrastructure to self-generate power for the entire hospital grounds for six hours daily and has demonstrated its ability to do so on multiple occasions.

“Thus, if CUC implements daily, six-hour disconnections to CHCC, such disconnections should have little to no effect on hospital services dependent on a power supply. This action will help CHCC control its monthly utility costs owed to CUC as well as assist CUC in diverting critical resources to other infrastructure in dire need of maintenance and repair,” said CUC.

CUC executive director Gary Camacho and CHCC chief executive officer Esther Muña met last Oct. 2, 2019 to discuss the outstanding balance and brought up the concern again to CHCC in official writing last Dec. 20, 2019.

Additionally, CUC says that the outstanding balance of CHCC has affected their ability to provide power, water, and wastewater services to the rest of the community. “CHCC’s outstanding balance has reached the point where both residential and commercial customers are essentially subsidizing CHCC’s monthly utility obligations. This is an unfortunate situation that CHCC could have avoided if it had made payments to CUC for services rendered. Consequently, the CUC board must now take policy action to alleviate CUC’s financial strains caused by CHCC so that CUC can effectively provide utilities to all of its customers” said CUC.

If CHCC uses a generator as a source of power, it will need another back-up generator, which is a requirement of the Centers for Medicare and Medicaid Services or CMS. “Unfortunately, we don’t have that,” Muna said.

CHCC Hospital Emergency Preparedness director Warren Villagomez earlier said CHCC’s 30-year-old generator will compromise a lot of the hospital’s services and that going offline six hours a day will affect the machine and services that the hospital provides.

CHCC is building its own solar power project on the grounds of the hospital but Villagomez said that only the first phase of the project had been completed, that there was a delay in connecting the system because of the ongoing pandemic. Once connected, the solar power system will be able to provide 22% of the power needs of CHCC.

In order to be able to pay CUC, CHCC will have to cut half of the $10 million allotted for medical supplies or take $5 million from the salaries of nurses and other health providers, said CHCC chief financial officer Derek Sasamoto.

During the CHCC budget hearing conducted by the House Ways and Means Committee last July 13, Sasamoto said mandated allotments for CHCC had not been remitted by the central government. Sasamoto also noted that uncompensated care reached $18 million in the current fiscal year. He said this has become a massive liability for CHCC, which needs government support.

“We will lose our nurses and our providers and it will be another situation of not providing services [to the public],” Sasamoto said.

“We want to pay what is due, but we are handcuffed,” Ogumoro said. “We are tied by our inability to collect the money from within the [CNMI] government. We cannot turn off the patients like we can turn off the power to your house. We don’t do that.”

Muna said CHCC has come up with a list of what the CNMI government owes the corporation, from the services it provides outside the hospital, including interisland medical referrals, the health services provided to the Department of Corrections, the Department of Public Safety, and other agencies.

Muna said once “we get an allotment from the government, we will split it up and [share it with] CUC. But we have not gotten that allotment.”

Justine Nauta
Justine Nauta is Saipan Tribune's community and health reporter and has covered a wide range of news beats, including the Northern Marianas College and Commonwealth Health Care Corp. She's currently pursuing a bachelor’s degree in Rehabilitation and Human Services at NMC.
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