The consulting company that recently lost its contract to run the District’s public hospital will stay on for up to two months as the hospital’s board seeks a new management company to take over, board members decided Monday.
The unanimous vote by United Medical Center’s directors means that Veritas of Washington, which has overseen since 2016 the financially troubled hospital’s operations for a monthly fee of $300,000, could remain in charge through the end of 2017.
Board members voted to temporarily extend the Veritas contract on a month-to-month basis for up to 60 days, allowing themselves time to find a new contractor. On Nov. 7, the D.C. Council narrowly voted not to continue the Veritas contract, citing allegations of mismanagement and concerns about patient safety.
The board also got sobering news Monday about the hospital’s financial condition. D.C. Chief Financial Officer Jeffrey S. DeWitt said UMC’s cash reserves — a vital measure of its financial health, given the unexpected expenses that can crop up for a hospital — have dwindled to approximately $4 million, down from about $10 million several months ago.
Should the reserves continue to drop, DeWitt said, the hospital could have trouble handling any large and unanticipated expenses.
“We really can’t take a hit,” he said. “It’s at the point where it needs to be watched very, very closely.”
Hospital board members — who in September approved a balanced budget for fiscal 2018 — now acknowledge the budget will have to be redone, a process that could entail cuts to hospital services or a request to the city for a subsidy.
Board chairwoman and former Ward 8 council member LaRuby May said that despite its financial challenges and management turnover, UMC should aim to provide the best care possible to its patients until it is eventually replaced with a new public hospital in Southeast Washington. Mayor Muriel E. Bowser (D) is expected to announce more detailed plans for that hospital, including its future operator, sometime next year.
“Our goal should not be to limp along until this hospital is replaced with a new facility,” May said Monday morning in a prepared statement that was written by fellow board member Wayne Turnage, Bowser’s health-care finance director. Under District law, the mayor appoints six of the board’s 11 voting members and picks its chair.
Council member Vincent C. Gray (D-Ward 7), who led the effort to cut short the Veritas contract, said in an interview that he thought the board’s action “makes sense” to ensure a smooth transition at UMC.
A spokeswoman for Veritas did not respond to requests for comment.
Veritas of Washington was founded in 2015. The company is owned by Chrystie Boucrée, wife of longtime health-care executive Corbett Price, who is listed as the company’s executive chairman in documents submitted to city officials.
Price, his relatives and his companies made more than $35,000 in political contributions to Bowser in 2014, the year she won office, campaign-finance records show. Bowser has said she had no role in the firm’s selection to run UMC, although a member of her administration recommended the company to the hospital board, which gave the firm a no-bid contract in the spring of 2016.
In March of this year, the city’s top health regulator warned hospital officials that she had detected problems with the quality of care at UMC. In August, she shut down UMC’s entire obstetrics ward, leaving two wards of the city without a local delivery room.
On Aug. 25, UMC nursing-home resident Warren Webb died after crying out for help, saying he couldn’t breathe and being left on the floor for approximately 20 minutes by his nurse. Hospital officials did not report key details of that incident to health regulators, who are now investigating based on a report on Webb’s death in The Washington Post.
On Nov. 3, Julian Craig, UMC’s chief medical officer and past president of the Medical Society of the District of Columbia, wrote a letter to the D.C. Council alleging that Veritas employee Luis Hernandez encouraged doctors to admit patients who did not require treatment in an effort to boost admissions figures and revenue.
The same day, the hospital’s former director of quality management and patient safety testified at a hearing of the council’s health committee that she left the hospital in July after just seven months because of “a lack of support by the Veritas leadership and continued pushback and interference” from one of the Veritas consultants.
Veritas has denied Craig’s allegations. In a Nov. 5 letter to May, Boucrée said that the board had hired an independent legal team to investigate Craig’s claims of improper admissions and that the team had informed Hernandez that he was cleared of wrongdoing. The board has not responded to The Post’s requests for further information about that investigation, including who conducted it and its findings.
Boucrée also defended the hospital’s focus on patients and quality of care, noting its recent reaccreditation by the Joint Commission, a private inspection body.
Hospital officials say they can pay for a replacement firm with funds that have already been set aside for Veritas for the rest of this fiscal year, which ends Sept. 30.
Beyond that, however, the board says it may have to make additional cuts to the hospital’s budget — or ask the District for an operating subsidy — in 2018.
City officials say the hospital’s deteriorating financial state has causes that include declining patient admissions amid heightened scrutiny of UMC since August and overbilling of the federal government — which insures many UMC patients through Medicare and Medicaid — between 2015 and 2017.
DeWitt said Monday that the hospital would have to repay at least $2.2 million in federal payments, depending on the findings of an ongoing review of billing practices.
The hospital could also face costs for reopening the obstetrics ward and new contracts — including an anticipated agreement with GW Medical Faculty Associates, a group affiliated with George Washington University — to take over some medical services that are not currently included in this fiscal year’s budget, officials say.