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April 10, 2013 / Paul Levy

Dear Board member

Saturday, November 3, 2007, 4:51am

Apologies to those readers who are tired of the union topic, but there is something going on that deserves public attention. And, if you are on the board of a hospital in Massachusetts, you might want to read closely.

As I have noted elsewhere, a key component of the organizing strategy of the SEIU is to engage in a corporate campaign against a hospital and to put pressure of the board of trustees to agree to concessions during the organizing process. As the situation unfolds at BIDMC, we see the precursors of such a campaign.

Over the last few weeks the SEIU has written letters to board members of Caregroup, BIDMC, and BID~Needham regarding one or another issue — like accounting, billing, or intellectual property transactions. In each letter, the SEIU will point out a flaw, mistake, or other circumstance that it asserts has occurred. The letter will make the point that the board members have a fiduciary responsibility with regard to the issue raised and the broader issue of supervising the hospital and encourages them to look into the matter in more detail.

Interestingly, SEIU has not sought press coverage or public disclosure of all of these items as they are filed with the boards. Instead they are simply mailed to the board members. What is going on here?

One has to predict that these issues will be raised by the union, but in what forum and in what way? One possible use could be in filings made with federal or state governmental bodies claiming that the boards of the hospital are not carrying out their fiduciary responsibilities and therefore the hospital (1) should not be permitted to issue tax-exempt bonds to support hospital capital programs and/or (2) should not be permitted to continue to receive state or federal reimbursement for patient care and/or (3) should not be permitted to continue to receive federal research funding and/or (4) should be stripped of its tax-exempt status. Another way is to simply try to embarrass the board members in the community.

Now, our boards, like most hospital boards, have all the governing structures in place that are designed to properly fulfill their fiduciary roles: Committees for compliance, audit, finance, research supervision, compensation, and the like. The board members take their responsibilities seriously and work hard at doing the job well for the community. And there are external reviews by accounting firms and audits as well by state and federal agencies, as well as bodies like the Joint Commission that review the actual delivery of patient care.

Nonetheless, in a large organization, there are be certain to be mistakes. When we find them or hear about them — regardless of the source — we fix them. For example, last week SEIU correctly pointed out an error from several years ago regarding BID~Needham bills to Medicare (just under two dozen patient encounters were billed incorrectly during 2004, resulting in an estimated overpayment by Medicare of approximately $569,000). Informed of the issue, we reviewed the records, notified Medicare immediately, and asked them for the best way to repay the dollars.

But sometimes we disagree with claims that have been made. A few months ago, for example, SEIU made assertions about our filings under the state’s uncompensated care pool, and we readily met with the relevant state officials to explain why we felt their assertions were incorrect.

On this blog and elsewhere, you have seen the utter transparency with which BIDMC conducts its business. This transparency is fully endorsed and encouraged by our governing bodies because they understand that we are ultimately accountable to the public and that we will do a better job for our community if we admit our mistakes and try to continually improve. It would be a sad irony, indeed, if that approach were thrown back in their face in the pursuit of campaign to organize workers.

The particular issues raised by the union and any mistakes that might have been made do not indicate a lack of fiduciary controls by the boards. They indicate that in the complicated world of health care, there can be both actual mistakes and also disagreements about the interpretation of rules and regulations. I think it is fair to say that if the intensely involved and diligent BIDMC boards are accused of not carrying out their fiduciary duties on the basis of the kinds of issues raised by the SEIU, every single hospital board member in Massachusetts is vulnerable to a similar charge.

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