By Troy Torres
(Tumon, Guam) Gov. Lou Leon Guerrero fired two Guam Memorial Hospital executives, who arguably made the two largest contributions to medical care on the island in decades.
The governor, who ran on a pro-hospital platform as a nurse who once worked there, hasn't put her money where her mouth is since taking office. Ms. Leon Guerrero had her cronies in the Guam Legislature defeat almost every attempt by Sen. Therese Terlaje to divert unappropriated revenue this fiscal year to GMH, which is critically short of the budget it needs to operate. Ms. Terlaje is the chairwoman of the legislative health committee. She tried vociferously throughout the budget debate for the upcoming Fiscal Year 2020 to appropriate at least bare-minimum funding to GMH,
That's because Ms. Leon Guerrero failed to consider that funding herself in her budget request to the Legislature. It's as though GMH didn't matter to her, compared to the other agencies that got boosts in funding levels. Ms. Leon Guerrero even went out of her way to push to maintain the tax hike that is hurting so many poor and working families. The funding generated from that, although originally intended for GMH, has been pluntaed all over a political Christmas tree; the presents under the tree wrapped up in pretty bows for other agencies to tear apart come October 1.
So perhaps Ms. Leon Guerrero is banking on the receipt of millions of dollars more each year to GMH from both the Centers for Medicare and Medicaid Services, also known as CMS, and from insurance companies, to carry GMH through. That's because on January 12 this year - days after taking office - Ms. Leon Guerrero got great news from CMS. They told her that they've approved Guam's application for Tax Equity and Fiscal Responsibility Act (TEFRA)-rebasing of Medicare rates.
The rates public hospitals can charge to patients - that insurance companies and that CMS will pay - are based on these Medicare rates. The last time CMS approved base rates for GMH was in 1997; those rates applied to 1998 costs for medical care. Between then and January 2019, the base rate had been stuck in 1998, despite the exponential growth in medical care costs. For over 20 years, GovGuam would seek the rebasing of these rates, and CMS would deny the applications.
The reason for the denials was - until January 12 this year - impossible to overcome. The government of Guam in 1998 told CMS officials that the hospital's financial records blew away during Supertyphoon Paka, in 1997. Without those records, there was nothing to base the rebasing on.
Enter Benita Manglona. In 2015, former Gov. Eddie Calvo transferred Ms. Manglona from her position as the popular director of administration to become the chief financial officer of GMH. Her mission included the establishment of a working billings system, stabilization of the hospital's finances, and TEFRA rebasing. Within her first year on the job, she accomplished the first two parts of her mission, albeit hospital finances began taking a nose dive, when the Legislature began withholding critical appropriations to GMH. TEFRA rebasing, however, remained a lofty goal.
Ms. Manglona and then-deputy director of the Department of Revenue and Taxation Marie Benito, met several times with U.S. Internal Revenue Service and U.S. Department of Health and Human Services officials in Washington, D.C. and San Francisco several times between 2015 and 2018. Each time, they came back home with shortening lists of deficiencies for GMH and the government of Guam to fix.
By December 2018, the final month of the Calvo administration, Mr. Calvo's fiscal team had wrapped up their final report to CMS. Mr. Calvo and Ms. Benito left office. Ms. Manglona's contract as GMH CFO continued in existence through the start of Ms. Leon Guerrero's administration.
A few days after she took office, CMS made a phone call: TEFRA rebasing had been approved. The impossible was accomplished. And it was Ms. Manglona, who led the way.
But Ms. Leon Guerrero didn't give any credit to Ms. Manglona. In a news release from the Governor's Office, Ms. Leon Guerrero took all the credit for the achievement, even though it was the result of four years of effort, of which she'd only been to work for a week.
Ms. Terlaje, however, was far more magnanimous. In a resolution she penned following the news from CMS, she wrote, "[T]he continuous denial by CMS to adjust GMHA patient rates resulted in reimbursement based on averages from 1998, resulting in years of underfunding GMHA compensation for patient healthcare. [C]onvincing CMS to increase the Medicare base rate has been a longstanding priority and goal for many past Board of Trustees members, former Administrators, Chief Financial Officers, management and staff."
Ms. Terlaje, while her resolution thanks the GMHA family for their contributions, which indeed came as a result of tremendous teamwork, pointed out one person, who led the effort.
"[S]ince 2015, GMHA Chief Financial Officer Benita Manglona had taken the lead in the GMHA Fiscal Department's decade-long effort to achieve 'rebased' patient rates by working closely with CMS," she wrote in her Resolution No. 33-35.
According to her resolution and the news from CMS, the rebasing of rates didn't just happen moving forward. The new base rate was made retroactive to October 1, 2014, providing to the hospital in January tens of millions of dollars in unanticipated revenue from CMS.
Perhaps this is exactly how GMH administrator Lillian Perez-Posadas has been able to pay payroll taxes since January, as she bragged she was able to do following the firing of Ms. Manglona. Ms. Manglona was blamed by Ms. Leon Guerrero and Ms. Perez-Posadas for the failure to remit payroll taxes the past few years. It was, in fact, among the critical fiscal deficiencies resulting from the underfunding of GMH by the Legislature.
The question is, if GMH received all this money as a result of Ms. Manglona's hard-earned efforts, why didn't GMH pay the payroll taxes debt, among other accounts payables that have accumulated through the period of deficient funding? If the governor and her GMH administrator knew, for years, about the payroll taxes issue, why didn't they dedicate the additional money Ms. Manglona won for Guam to pay its existing debt? What have our leaders been using this money on?