Due to an insufficient amount of money received so far from the 2% wage tax, the LBJ Medical Center has yet to re-start the off island medical referral program, which was to be funded with 50% of all revenues received through the wage tax, says Joseph Davis-Fleming, the hospital’s chief executive officer.

Approved in early 2012, the tax was meant to first pay off the hospital's $3 million loan from the Workmen’s Compensation Account (which has been accomplished) and thereafter all revenue from the tax is supposed to go to hospital operations, including the off island medical referral program. (It was not to be used for payroll.)

The wage law requires all funds for LBJ to be deposited in a restricted-use account for the sole purpose of the referral program and hospital operations.

Lawmakers in both the Senate and House have been asking questions as to the status of the referral program, since the loan has been paid off. They are expected to raise the same questions again when the Fono convenes next month for the 4th regular session.

LBJ’s second quarter performance report for FY 2014 states in part that the hospital is still owed $3.32 million in wage tax payments from ASG, and this includes just over $589,000 from FY 2012, and $2.73 million for FY 2013 and FY 2014.

In a recent email message to some lawmakers (who requested information on the referral program), as well as to other LBJ and ASG officials, Davis-Fleming states that the referral program has not yet been re-established, so none of the wage tax receipts have been expended.

He explained that LBJ management is developing a new program proposal for the board’s consideration and approval— to include financial analysis & projections—before the program is reinstated. He didn’t elaborate on specifics of the new program.

“Realistically, LBJ has not received enough of the revenue due from the [ASG] Treasurer’s office to have adequate funds to restart this program, and the current amounts that we have accumulated in a restricted-use account would quickly get used up by only a few patients - just like what happened years ago - unless we come up with a more cost-effective approach,” he said.

“At this time, we are only able to facilitate purchase of deeply discounted airfare for patients that are approved by the Medical Staff Committee that reviews and determines criteria and qualifications for all patient referral requests whenever LBJ is unable to provide the services requested by the patient/family,” he pointed out.

(LBJ has a working relationship with Hawaiian Airlines, which provides discounts for hospital patients to be sent off island for treatment.)

Davis-Fleming says the Medical Referral Off-Island Committee sets the criteria and determines qualifications for patients who need to be sent off-island for medical treatment, as established per LBJ Medical Staff Bylaws.

The off island referral program was discontinued some four years ago due to lack of funding and since then, there have been several attempts by previous LBJ boards and administrations to restart the program.  All have failed, as no funds were allocated to the program in the annual budget.