Togiola to
submit bill aimed at forgiving LBJ $5M loan
Doing
so will free up funds to pay back Medicare, he says
by Fili Sagapolutele
Samoa News Correspondent
Gov. Togiola
Tulafono plans to submit to the Fono sometime this week an Administration
bill to write-off or forgive the $5 million loan that LBJ Medical
Center received from ASG five years ago.
Speaking on his
weekend radio program on Saturday, Togiola said forgiving this
loan will allow LBJ to save necessary funds to pay the $9 million
it owes to the federal Center of Medicaid and Medicare (CMS)
for the Medicare program
Togiola was responding
to a caller who asked about the $9 million and why LBJ owes this
money. The caller says she is concerned over the misuse of funds,
to which the governor made clear there was never any misuse of
federal funds, but instead it was an "overpayment"
by Medicare to LBJ.
Last October,
LBJ received the Final Cost Report Settlement information from
Medicare for financial years ending 2003, 2004, 2005, 2006, including
the final cost report settlement requirements totaling just over
$9 million.
Togiola said
LBJ must pay this money back or LBJ will lose out on continued
funding for Medicare as well as other federal block funding for
the hospital. He said there is just no way around this issue
but to pay it back.
He said the most
serious problem faced by the hospital is the 12% interest, which
amounts to a huge sum, and therefore the $9 million needs to
be paid as soon as possible.
LBJ's chief executive
officer Patricia Tindall told Samoa News recently that the hospital
has been making monthly payments of about $211,000 and as of
last month payments made stood at $1.2 million using operating
funds and monies earmarked for contingent liabilities.
Togiola also
confirmed that LBJ has submitted a revenue measure to help pay
down the $9 million, saying that LBJ proposed to increase the
current excise tax from 5% to 10% with the additional money going
to pay off the $9 million.
However, the
governor said he rejected the proposal because that would be
an added burden on the community already facing a high cost of
living.
To assist the
hospital and save money to pay the $9 million, Togiola said he
plans to submit to the Fono today legislation that would forgive
LBJ's $5 million loan from ASG in 2003.
A bill to address
the Medicare payment is one of the issues on the special session
called by the governor.
The loan bill,
funded by $11.6 million leftover from the Hurricane Val insurance
settlement, was signed into law in November 2003 and since late
2004 some lawmakers have called for the administration to forgive
this loan, saying that the funding source was windfall money.
The most recent
call to write-off this loan was made early this year following
a government report which said that the $5 million remains a
pending expense yet to be paid by LBJ.
Last year, the
LBJ board requested that the government forgive this loan because
LBJ was already struggling to meet certain financial obligations
and there was no money set aside to pay it off.
The loan was
used to pay off some outstanding LBJ debts such as U.S. FICA
and Medicare taxes; Employee and employer contributions to the
ASG Employees' Retirement Fund; Utility payables; Pharmaceutical
company payables; other vendor payables incurred for essential
operational services and ASG withholding taxes.
Reach the
reporter at fili@samoanews.com.
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