AIDS Clinic Caught in Cash Crisis
Wednesday, May 18, 2005
The Whitman-Walker Clinic, the region's leading source of services for people with HIV/AIDS, is struggling with a financial crisis that has depleted much of its reserves and forced its board to begin considering program cutbacks. On Friday, for the first time in its three decades, the clinic was unable to meet payroll.
A string of escalating budget and funding problems is responsible, according to interim Executive Director Roberta Geidner-Antoniotti. The District Health Department and Prince George's County housing agency owe it more than $700,000 for past services, and a decision by United Way to change its schedule for disbursing contributions has delayed another couple of hundred thousand dollars since the start of the year, she said.
But an even greater potential issue is the clinic's apparent overcharging of government contracts going back at least two years. Geidner-Antoniotti and the board hired an independent consultant and lawyer to examine the billing formula for laboratory tests and then suspended billing for lab work until they can determine the extent of the liability to be repaid. It could be as much as $2 million, she said.
Other factors have held up new grants since March 1, though the clinic has continued to provide social support and medical, legal and educational assistance at an unreimbursed cost of $480,000 a month.
"It's a very serious situation," Geidner-Antoniotti acknowledged yesterday. "I do not believe we will close, but I cannot give anyone a 100 percent guarantee."
In a city with one of the worst AIDS epidemics in the country, the nonprofit organization's crisis could have major repercussions. Its effect would spread beyond the District's borders. Whitman-Walker, which opened in 1974 as a gay health clinic and built a national reputation, serves 7,000 clients throughout the Washington region. It has programs in the Maryland and Northern Virginia suburbs. Last year, it administered 8,000 HIV tests.
"The breadth and depth of what is done at Whitman-Walker is not to be found elsewhere in the U.S. under one roof," said D.C. Council member Jim Graham (D-Ward 1), the clinic's executive director for 15 years. "This type of organization, if we didn't have it, we'd have to invent it."
Graham expressed disappointment and concern over the clinic's dire finances -- upon his departure in late 1998, Whitman-Walker had $3.5 million in cash and endowment, plus real estate equity totaling more than $8 million -- but yesterday he looked forward, not backward. He gave administrators and the board high marks for owning up to the situation and pledged his support.
"If this city and this region wants this organization to survive, and we should want it to survive, we've got to be prepared to provide resources sufficient for it" to do so, he said.
D.C. Health Director Gregg A. Pane also promised to help and conceded his department's failure to reimburse in a timely fashion. "We need to pay our bills and be good citizens with the community groups that provide services," he said. "We're trying to do what we can to expedite things."
Should Whitman-Walker curtail programs, "it'd be highly significant and something we don't want to see," Pane said.
The clinic began cutting back late last year, charging clients on a sliding scale, moving out of the rental housing business and reducing staff as it tried to refocus fiscally and close an anticipated deficit in its $29 million budget for 2005.
Meanwhile, it continued to dig into the laboratory services over-billing, a problem that Geidner-Antoniotti said appeared caused by innocent mistakes and not fraud.
Board members were scheduled to discuss cost-saving proposals last night. As much as 10 percent of the budget will need to be cut. "I believe we're taking the necessary steps," she said.
By Friday, the clinic hopes to pay its 240-plus staff members the balance of their last paychecks, nearly $300,000. Sixteen top managers elected to delay their salary completely.
"People are anxious, as you can imagine," Geidner-Antoniotti said.
Anxiety is starting to spread. "The clinic has played a leading role in the entire metropolitan region's response to AIDS for years," said Richard Rosendall, vice president for political affairs at the Gay and Lesbian Activists Alliance.
The sudden threat to its existence is sobering, he said: "I guess it's been easy, because they've always pulled through in the past, to be complacent."