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Medicare, Medicaid money focus of next SIC hearing

The Senate Investigative Committee (SIC) will continue its investigative hearings on the financial demise and operations of the LBJ Medical Center, after hearing verbal testimony this week from three top hospital officials.

Committee chairman Sen. Lualemaga Faoa said yesterday that SIC will now focus on the federal Medicaid program, which was previously part of the medical center until it was transferred last August to the Governor’s Office under the leadership of the Lieutenant Governor.

Samoa News understands that one of the issues being probed by the SIC is how much money the hospital gets from the U.S. Center for Medicaid and Medicare Service (CMS) for the Medicaid and Medicare programs; and how much money LBJ actually received. SIC is also looking at any problems dealing with the way these funds are being spent.

Niuatoa Andy Puletasi,who heads the Medicaid Office, is being subpoenaed by the SIC along with pertinent documents. Puletasi is scheduled to testify at 9 a.m. next Wednesday before the SIC.

According to LBJ’s first quarter performance report for FY 2012 — covering the period of Oct. 1-Dec. 31, 2011 — the hospital’s workforce for the quarter includes four Medicaid Agency workers, who were transferred to the Governor’s Office effective Aug. 23, 2011, but who continued on the LBJ payroll until Apr. 1, 2012 at the request of the Lieutenant Governor.

Also being subpoenaed for next Wednesday’s hearing, is Jennifer Tofaeono, who was previously employed with LBJ’s Business Office but resigned last year reportedly during the  summer after the office was being re-organized under the lead of chief financial officer Viola Babcock.

However, it’s unclear if SIC investigators were able to serve the subpoena on Tofaeono, who is reportedly off-island. Samoa News was unable to obtain information yesterday as to SIC’s focus on Tofaeono, or the specific reasons she has been subpoenaed.



One of the issues that surfaced during Wednesday’s SIC hearing deals with a $5 million loan LBJ received from ASG in 2003. Responding to SIC questions, LBJ’s chief financial officer Viola Babcock told committee members that no payment has been made and no interest has accrued on this loan. 

“We understand that we need to petition the government to forgive this loan,” she said.

LBJ chief executive officer Mike Gerstenberger added that the hospital does not have any information regarding the funding source to repay this loan.

The $5 million loan was an effort to provide financial assistance to the hospital, but five years later the governor submitted to the Fono a bill to amend local law to allow the American Samoa Medical Center Authority to borrow money from financial lending institutions.

A provision of the bill forgives the $5 million loan — but the measure was automatically defeated when no action was taken before the end of the 30th Legislature in 2008. There was no new action to have this loan be forgiven, but there were calls in the Senate last year for the government to write this loan off from its books.

Togiola at the time sought to forgive the loan in order to free up LBJ funds to pay the more than $9 million the hospital owes to the federal Medicaid program due to Medicaid overpayment to LBJ. Failure to make the required monthly payments would result in the federal government withholding millions of dollars for American Samoa.