LBJ Medical Center board chairman Mase Akapo told lawmakers that former hospital chief executive officer Joseph Davis-Fleming was terminated because he was not doing his job and was not qualified for the post, and any threat of a lawsuit against the hospital is that person’s individual right.

Mase, along with LBJ chief financial officer Pauline Gebauer, appeared last Friday before the Fono Joint Budget Committee for the hospital’s FY 2015 budget.

LBJ’s total FY 2015 budget total is $52.67 million — which is the same amount for FY 2014.

LBJ’s largest revenue source totals $13.49 million under Medicaid and and Medicare; followed by $7.90 in DOI funding; and $3.5 million from the 2% wage tax. ASG’s subsidy is $6 million and LBJ is projecting to collect $7.77 million in cash collections.

LBJ MANAGEMENT

At the start of the hearing, Sen. Galeai Tu’ufuli said he is very concerned with hospital management and he said it’s the cause of the many problems currently faced by the hospital — but he didn’t elaborate.

He told Mase that the law is clear— the board appoints the chief executive officer and the chief financial officer to oversee the management of the hospital.

He says the CEO is the key to the success of the hospital and also the person who carries out policies set by the board; however, when the board “micro-manages” the hospital— then that becomes a problem.

Sen. Alo Fa’auuga said he supports Galeai’s concerns, and he has previously called on the board and management to work together in harmony in order to get things done right at the hospital.

He then pointed out that news media have reported that the former CEO has threatened to file a lawsuit against the hospital and he asked as to why.

Mase responded that perhaps this is the right and appropriate time for the board to make a statement, adding that he didn’t want to respond to the media’s report about the lawsuit.

He said the former CEO was removed by the board because the person wasn’t qualified for the post and that if the man had remained, there would have been more problems at the hospital. Mase also said that following Davis-Fleming’s performance evaluation — which was reported by the media — the former CEO failed in all five evaluation categories and therefore he was removed.

According to the chairman of the board, the former CEO has the right to sue the hospital — that is his right as a human being.

Senate President Gaoteote Tofau Palaie quickly pointed out that this is a budget hearing to debate financial affairs of the hospital and that Alo can discuss with Mase after the budget hearing other details about the termination of the former CEO.

Asked by the committee, Mase said that they are still advertising the post of CEO and once it is filled, he will give up his duties as acting CEO.

Sen. Soliai Tuipine Fuimaono also said he supported Galeai’s statement and recommended that when a new CEO is hired, to let the CEO do his job and he told the board “not to interfere”.

EXCISE TAX

According to the budget document, LBJ is projecting to receive $400,000 in FY 2015 for its share from the fuel excise tax.  Sen. Nua Saoluaga pointed out that $47,500 is budgeted in the excise tax for personnel costs, but the law is clear that this share is to go for the purchase of medication and medical supplies, not personnel.

Mase replied that this is incorrect as cited in the budget, and will be removed and placed in the right budget category.

Both Sens. Magalei Logovi’i and Laolagi F.S. Vaeo asked the hospital to revisit its budget to make sure that the money LBJ receives from the excise tax goes to pay for medical supplies and medication and is not used for personnel costs.

WAGE TAX

Several questions were raised by Gaoteote and other committee members over the 2% wage tax, in which the hospital projected to collect over $3 million in FY 2014, as well as 2015. According to the law, 50% of the wage tax goes to LBJ operations and the other half is for the off island referral program.

Gaoteote said that, based on financial reports from the hospital, there should be money in the account for the 2% wage tax to pay for the off island medical referral program. He says if $3.5 million is budgeted to be received from the 2% wage tax, that means some $1.7 million should go to this important program.

Mase explained that LBJ didn’t receive all of the $3.5 million budgeted last year. He said that only $1 million was received and this helped restart the off island referral program. And since June and July, the hospital has not turned down any patient in need of off island referral based on recommendations from the referral committee, he said, adding that if recommended by the committee, then the airfare of the escort is also paid by the hospital.

However, Gaoteote said there is one patient, whom he (Gaoteote) ended up paying the airfare for that person to travel off island— and he will personally contact Mase on this issue. Additionally, there are patients who were unable to travel on LBJ, because the hospital insisted it did not have the money, the Senate president noted.

Some lawmakers still plan on getting more information from the hospital on the actual amount of money it has received under the 2% wage tax for FY 2013 and FY 2014.

When asked by the committee about the close to one-million in Hawaiian Airlines miles earned by ASG travel that was to help with costs of travel for the referral program, Mase replied that nothing has come to the hospital.

Rep. Vui Florence Saulo says that her biggest problem with the wage tax is that all wage earners — even non residents — pay this tax, but when patients are billed by the hospital, there is a resident rate and a non-resident rate.

Mase said the board continues to work on ways to assist non residents, and there is also a program to assist low income families.