Updated: Oct 16
Former GMH administrator reveals power struggle , connivances and double-dipping by physicians
By Mar-Vic Cagurangan
During his brief stint as CEO of the Guam Memorial Hospital, Theodore "Ted" Lewis said he was never able to go past the governor’s cordon sanitaire. Mark Calvo, the governor’s chief of staff, was the only person in Adelup who would see him. “I was never able to meet with the governor one-on-one during the time I was there,” Lewis said. “The chief of staff told me that anything I would like to discuss with the governor, I can discuss with him instead.”
Lewis left Guam in the first week of June 2016 after completing his consultancy contract, which he negotiated with the governor’s office after he was forced to step down on Jan. 11 of that year. He is now based in the northeast U.S.
His forced resignation did not exactly come as a surprise given Gov. Eddie Calvo’s overt displeasure with the CEO. Lewis’ departure was the culmination of a series of theatrics, which began with a credit card abuse investigation in the summer of 2016, followed by a sexual harassment complaint, which Lewis believes was part of a demolition job in order to get rid of him.
His removal as the CEO was preceded by the mass resignation of the hospital’s executive board in December 2015 following financial policy disputes with the chief financial officer, Benita Manglona.
Now, breaking his silence for the first time since leaving the island, Lewis has revealed behind-the-scene power dynamics and connivances at GMH, characterizing the organization as one run by a “hostile clique” led by Gov. Eddie Calvo that seeks to protect a family business. The Calvo family-owned SelectCare Insurance is the largest insurance provider for GMH.
Lewis said Manglona was practically running the show along with Medical Director Dr. Larry Lizama. “They had a direct line to the governor. They were meeting up in Adelup every week and decisions were being made there,” Lewis said in an interview via Messenger. “They didn’t care about the GMH board.”
Manglona, former director of the Department of Administration, was transferred to GMH in October 2014, following the unexplained resignation of then-CFO Alan Ulrich. In appointing Manglona as the hospital’s new CFO, Calvo said the former DOA director was “instrumental in solving Guam’s $336 million deficit problem.”
Lewis, former CEO of the Seventh Day Adventist Clinic in Tamuning, took the helm of the hospital in May 2015 following the abrupt resignation of Joseph Verga, who was hired in 2012. The administration’s announcement of Verga’s resignation was left unexplained. According to a source, however, he was dismissed over allegations that he falsified his credentials.
“During my first couple months I focused on helping the hospital prepare for the pending important Accreditation Survey as the hospital's accreditation status was on probation,” Lewis said. “After we passed the survey and got the accreditation status restored to normal, I began looking at the hospital’s finances.”
Lewis said his exclusion from the decision-making process started when he pointed out the “severe financial issues that needed to be corrected.”
His efforts to get involved in the restructuring of Medicare reimbursement rates and the GMH fees were shunned. Lewis said he was told “to stay out of it.”
By that time, GMH had already hired EOP Group, a Washington D.C.-based lobbying firm, to facilitate new Medicare rates with the Center for Medicaid and Medicare Services. EOP was hired during Verga’s tenure in 2014. “I learned later that EOP was recommended by Frank Campillo,” Lewis said.
Campillo is the plan administrator for SelectCare Insurance, which is owned by the governor’s family. SelectCare also owns IHP Medical Group, where Lizama is also an internal medicine doctor. At GMH, Lizama is making $295,472.06 in base salary and benefits, according to the hospital’s staffing pattern as of April 30, 2018.
While finding himself shut out of the executive process and pushed to the periphery, Lewis found allies in the executive board, comprising chairman Lee Webber, vice-chair Frances Taitague Mantanona and finance committee chair Rose Grino. “They were supportive of my efforts to address the obscene under coding, low billing and irresponsible collection practices at GMH,” he said.
According to the Office of Public Accountability’s audit of the hospital’s 2015 finances, third-party payers were billed $42.8 million, but GMH collected only $28.9 million. An independent audit by Deloitte found “a variance of $47,185 between the general ledger and bank reconciliation” that could not be accounted for as of Sept. 30, 2014. Deloitte’s audit also found two checks, with a combined total of $21,871, that were cleared in May 2014 but included in the outstanding checks as of Sept. 30, 2014.
In October 2016, Calvo ordered Webber to investigate Lewis, citing “a concern the hospital administrator may have abused or may be abusing his privilege to a hospital-paid credit card.” The governor accused Lewis of “racking up thousands of dollars in monthly restaurant charges on a government credit card.”
The board hired an independent accountant to look into the matter. By the end of October, the board cleared Lewis after the accountant found no evidence of credit card abuse.
During the credit card investigation, the accountant spotted some anomalies that the board chairman wanted examined as well, Lewis said. Having been sanctioned by the board, Lewis said he undertook his own scrutiny of the GMH financial records. “I began to look into physician expenditures and after some evaluation I came to the conclusion that there were Stark Law violations at GMH,” he said.
The federal Stark Law prohibits physicians from referring patients to receive ‘designated health services’ payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship.
“Certain physicians who were full-time employees of Guam Memorial Hospital and being paid full-time salary and benefits at the hospital, had a majority of their billings and collections going to their private practice,” Lewis said.
Lewis said the board’s executive committee “was getting more and more concerned,” and asked him to look for a candidate for CFO to replace Manglona. Lewis said Webber told him “not to worry,” assuring him that his employment was secure as was his contract with the board. “This was all taking place in the fall of 2015,” Lewis said.
Around that time, Webber was questioning Manglona about the procurement of a new online payment service system, which he argued might not be practical for a hospital that mostly has indigent clientele.
On Dec. 10, 2015, Lewis said, he received a text from Webber, which read, “Just so you know, I am resigning today.” On the same day, Adelup announced that Webber, Grino and Taitague-Mantanona quit the board, citing “personal reasons” and “new opportunities.”
Left without any allies at GMH, Lewis was approached by the FBI. Five days after the executive board’s mass resignation, Lewis wrote to FBI, seeking an investigation into possible False Claim Act and Stark Law violations. “These are in the form of full-time pay and benefits for six physicians that also are involved in full-time private practices,” he wrote.
The federal False Claim Act “makes it a crime for any person or organization to knowingly make a false record or file a false claim regarding any federal health care program, which includes any plan or program that provides health benefits, whether directly, through insurance or otherwise, which is funded directly, in whole or in part, by the United States government or any state healthcare system.”
Billing records indicated that the number of patients seen by certain physicians at GMH is not commensurate with the amount billed by GMH, a possible indication that patients may have been billed by their private clinics.
“No contracts exist for these physicians and if they have a substantial amount of their time worked in their private practice, then these amounts of hospital employment compensation are disguised payments being made in exchange for the referral of their patients to the hospital,” Lewis said.
In 2014, the total amount of charges generated from the physicians’ services was about $23.3 million. In 2013, it was about $21.5 million, and in 2012 about $22.4 million. “Generally about 50 percent of the patients and amounts charged related to Medicare, Medicaid and MIP,” Lewis said. “So that pattern that exists in 2015, if appropriate, also existed in the previous three years in the same level of magnitude.
Lewis also questioned the hospital’s “suspicious utilization” of Global Agency and other staffing agencies to bring physicians to GMH instead of going through the traditional recruitment process. In 2015, a pathologist, who had applied directly with GMH, was instructed by Lizama to “go through Global” instead. As a result, the hospital is paying the agency $25 for every hour worked by the physician.
Lewis said his interviews with department physicians indicated that the medical director “routinely requires staffing needs to be filled though the Global Agency instead of through traditional recruitment methods.” This practice, Lewis said, “has the effect of incurring large fees owed to the Global Agency.”
Lewis said the suspicious payment activity was first spotted by the independent accountant, who conducted the credit card investigation.
The Pacific Island Times’ phone call to Lizama at the IHP clinic and emails to Manglona were not returned as of this writing.
The week before Christmas 2015, Lewis received a call from Mark Calvo. “He told me they wanted me to leave on the basis of giving me 30-day notice ‘without cause,’ which was a clause in my contract,” Lewis said. “I told him to forget that. I had left a good job to help them out and would only leave if they paid me out the balance of my contract. He said he would talk to the governor over the holidays.”
Against this backdrop, Lewis faced a sexual harassment complaint filed by a hospital employee under Lizama’s office — a charge that he continues to deny and believes was orchestrated by those who wanted him out. “I had little interaction with this woman,” he said. “I was distraught by this accusation.”
Throughout the remainder of 2015, Lewis said he cooperated with the Equal Employment Opportunity Office at GHM. “On several occasions I had been told that the complainant would drop the case if I would issue a written letter of apology — an admission of guilt. I steadfastly refused to do this as I had done nothing wrong,” he said.
“Around 10:30 p.m. on Jan. 9, I received a call from the hospital’s PR person, June Perez, telling me the papers were running with the sexual harassment story the following morning,” he recalled. “On Monday Jan. 11, 2016, I awoke to the media in Guam running with the sensational story of sexual harassment.”
On Jan. 13, 2016, Adelup announced his resignation and named Lizama acting CEO. Lewis managed to negotiate with the governor’s office to be given the consultancy work as an alternative to the severance pay that he sought but the administration refused to grant.
“I started receiving my paychecks for my job as a consultant, but within two to three weeks, they started deducting from my paycheck. They ended up getting all my paychecks from January until my contract ended in May,” Lewis said. He said despite being exonerated after the investigation, Manglona took back from him a total of $19,674.43, supposedly as a payment for his credit card use. “These funds were used to bring physicians to Guam from the mainland for interviews, to pay for approved consultants to assist with the Accreditation Survey preparation, and to pay for approved travel,” Lewis said.
Lewis said he is still awaiting the Office of the Attorney General’s request for assistance in recovering the money seized from him.
Lewis said what was most disturbing for him was the sexual harassment case. “I wanted this case to be completed so I can clear my name. I have done nothing wrong to this employee,” he said.
While he remained employed with GMH as a consultant until May 11, 2016, Lewis said he “encouraged and cooperated with the EEO office to facilitate the completion of the EEO investigation.”
The case, however, was left unresolved. “In May 2016, when the EEO people attempted to conduct an interview with the complainant that would require her signing an affidavit, she refused the interview saying that there was no point in continuing as I was no longer CEO, and would be leaving the payroll as of May 11, 2016,” he said. “As a result of this false claim, and the inappropriate release of it to the public, I lost my job, my career, and my source of income.”