Sasamoto: Every year there’s a deficit of $17M

Posted on Jul 15 2020

Derek Sasamoto, the Commonwealth Healthcare Corp. chief financial officer, says that CHCC will acquire the $17-million deficit of the medical referral program if the operation was transferred to the corporation during the House of Representatives Ways and Means Committee budget hearings for fiscal year 2021 on Capitol Hill last July 13.

Sasamoto shared his financial point of view of the Torres administration’s proposal to transfer the Medical Referral Office operation, which is a $21-million program in terms of costs to CHCC.

“Every year it is funded about $3 million. So every year there’s a deficit of $17 million or more. Essentially, they are transferring that deficit to CHCC,” Sasamoto explained to legislators.

Additionally, he added that CHCC is already operating at a deficit of over $15 million for the uncompensated care. Also, CHCC does not have the funds for Medicaid match and has not been getting paid by the government agencies.

“We really have to consider and really think hard about funding because you cannot fund that program for 40% and expect 100% execution,” said Sasamoto. He added that transferring medical referral to CHCC is “another mountain they have to climb.”

Sasamoto said that they have gone from $30 million in revenues to $60 million and CHCC has been doing their part to expand services, increase its revenue, and cleaning up their audit.

“Right now, we are battling so much from the past and many issues occur in the present, not to mention what’s happening with the cash flow and COVID-19,” he said.

Sasamoto added that CHCC is operating on $90 million and for fiscal year 2021, they are requesting a budget of $33 million. However, the Governor’s Office has proposed a $4.4-million funding for the hospital, 87% less than what CHCC is asking for.

“I am hearing we are going to get funded $4.4 million, but there might be a reduction of $2.7 million. Even at the $4.4 million level at a $21-million program, it is going to be at the $17.6 million deficit,” he said.

Sasamoto pressed lawmakers to settle upon if it is doable and make the decision to properly fund it. Sasamoto added that without the funding support, it can be “very difficult” and that CHCC supports the proposal to transfer the medical referral program to CHCC.

According to CHCC chief executive officer Esther Muna, the medical referral program has been “bleeding a lot of money” and she had been requesting in the past that the government should have invested that to CHCC, so they can offer that services.

“That is one of the reasons why we have actually expanded it to have a cancer center here at CHCC. We did reduce the budget in total spending for oncology services by having our own oncologist here,” Muna added. She says that she has heard from the community that they don’t want to leave to get tertiary healthcare or specialty care outside.

Should the administration push through with its proposal, Muna said they have to form a task force for the program. “We want to get everybody involved and not put the same burden that we had when we started the corporation,” she said.

According to Muna, when they started the corporation, the government threw them seed money and let them deal with the problems which cost CHCC their Centers for Medicare & Medicaid Services certification.

“If they are going to transfer to us, please help us,” Muna said.

Rep. Tina Sablan (D-Saipan) commented that it is irresponsible on their part to throw the medical referral responsibility to CHCC and let them figure it out what to do. “We need to support this corporation if this is going to be the decision of the government.”

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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