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KCHC official: We are not under CHCC

KAGMAN Community Health Center board chair Velma Palacios said KCHC is not a subordinate entity of the Commonwealth Healthcare Corporation as stated in the co-applicant agreement. 

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page1 thumb“KCHC and CHCC are partners and we are not under the CHCC. For grant purposes, we are a co-applicant,” Palacios said in a phone interview. 

In 2013, the Kagman health center initiated its operations through a “co-applicant” agreement with CHCC.

In a separate statement, CHCC Chief Executive Officer Esther Muna said “through the co-applicant Velma PalaciosVelma Palaciosagreement, CHCC provides coordination, administrative oversight, technical support and other services.  This lessens the need for these expenses to be paid for separately by the small community health center.” 

She said the co-applicant agreement helped KCHC achieve Federally Qualified Health Center or FQHC status “as it could not, at that time, independently meet the federal requirements set forth by the Health Resources and Services Administration” or HRSA. 

Muna said although KCHC has the authority to apply for FQHC funding independently, “by reusing the co-applicant agreement as part of its justification, the new application misrepresented KCHC’s relationship with CHCC.” 

The HRSA has given the KCHC a three-year grant extension which gives the health center more than $1 million funds annually for its operation. 

 Palacios said any non-profit entity may apply for this grant and it does not necessarily require a co-applicant. 

“One of the requirements is you have to have a community board. KCHC has a community board that runs and make policy for the community health center,” she said. 

After KCHC announced that it will operate independently of CHCC starting on May 1, Muna fired the center’s executive director, Vince Castro.

Muna said there were no discussions with  CHCC on how the Kagman center would interact with  CHCC after the split. 

“Only the original arrangement was listed in the application, which does not represent the new arrangements that will need to be made,” she added. “CHCC is currently in discussion with the U.S. Department of Health and Human Services  Region IX on this matter.”

According to Palacios, the KCHC board still wants to work with the CHCC board. 

“We will continue to respect the memorandum of agreement with CHCC,” she said, adding they still have to deal with the CHCC. 

“We have clients who will be needing CHCC services like in emergency situations,” she said. 

Palacios said  KCHC was a co-applicant with CHCC for five years but the community center now feels that it could run on its own as a non-profit organization. 

“This time, we applied on our own. We did not apply with CHCC. And we got the grant,” she said. 

Under the co-applicant agreement between KCHC and CHCC, Palacios said CHCC managed the center’s finances and the human resources. This arrangement will end starting on May 1, she added.

Muna said this means that as a non-profit and non-government organization, it will be KCHC’s responsibility to ensure that it performs well and manages its financial resources “with transparency and fiduciary responsibility to the community as there will be no further oversight by external entities such as CHCC or the Office of the Public Auditor to ensure that conflicts of interest are avoided.” 

As for her decision to fire KCHC executive director Vince Castro, Muna said under the co-applicant agreement, all employees of the center, including the executive director, are employees of CHCC. 

She said all employees of the KCHC are subject to CHCC’s personnel policies and procedures. 

“CHCC employee termination lies with the corporation itself. The board of directors of  CHCC has been involved in the discussions on the actions to terminate the employment of Vince Castro,” Muna added.

She said the  KCHC executive director, as an employee of CHCC, is responsible for communicating actions and decisions regarding the health center to the CEO who reports activities to the CHCC board of trustees. 

“Although CHCC supports KCHC’s desire to be independent, CHCC should have been a part of the decision-making and a transitional plan should have been established far in advance to reconcile assets shared by CHCC to KCHC and make clear arrangements for the relationship with the CHCC, including services provided by the hospital, moving forward,” Muna said.

But Palacios believes the KCHC has the authority to select, evaluate or dismiss the executive director for the health center and not CHCC. 

Citing a reason for KCHC’s decision to sever from CHCC, Palacios said the two entities have run into policy differences. 

“We both have governing boards. But we have different policies. The KCHC board may want this but  CHCC doesn’t agree. All finances go to CHCC. Even though we approved our budget, everything goes to CHCC to process payments and others,” Palacios said. 

It has always been KCHC’s plan and long-term goal to run the health center independently, she added. 

 “We mentioned this with CHCC and it was the right time to do it. We feel ready to go on our own. We have been operating for five years already,” she said. 

One of their goals is to have better opportunities to expand the center’s healthcare services, she added.

“The main mission is serve our community and to provide healthcare services.  We are trying to follow the program based on the grant requirement by providing affordable care to everybody. That is the main reason. That has always been our long-term goal. Our main goal now is to transition smoothly, continue services, focus on the plan.”

KCHC also plans to open satellite clinics on Tinian and Rota, she added.

Palacios said they have sent a letter to the CHCC board of trustees regarding the need to discuss the transition, but acting chairman David Rosario responded that the board will wait for the return of board chair Lauri Ogumoro who is on an official trip.

Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/103505-kchc-official-we-are-not-under-chcc

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