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UMMS CEO Chrencik to take leave of absence

Lawmakers are vowing reforms, demanding to know how contracts allowed

Stephen Burch, chairman of the UMMS board, talks to reporters after meeting with Gov. Larry Hogan and Senate President Thomas V. Mike Miller Jr. Wednesday. Behind him is UMMS President and CEO Robert Chrencik. (Bryan P. Sears)

Stephen Burch, chairman of the UMMS board, talks to reporters after meeting with Gov. Larry Hogan and Senate President Thomas V. Mike Miller Jr. Wednesday. Behind him is UMMS President and CEO Robert A. Chrencik. (Bryan P. Sears)

Robert A. Chrencik, president and CEO of the University of Maryland Medical System, will take a temporary leave of absence at the request of the system’s board of directors, UMMS announced Thursday.

The leave comes as the board and the system are facing growing scrutiny over contracts given to members of the board. In Annapolis, lawmakers are rushing legislation they say will impose new measures of accountability and transparency as the 2019 session enters its final two weeks.

“There is nothing more important than the trust of those that depend upon the board’s leadership. And, over the past week, I’ve had the proper time to listen to concerns and reflect,” Stephen A. Burch, the board’s chair, said in a statement. “The board and I are firmly committed to evolving our governance principles and operating with even more transparency.”

Chrencik’s leave will begin Monday. John Ashworth, the system’s vice president of network development, will take over as interim president and CEO.

The board also announced that it would be engaging an outside “accounting/legal firm” to conduct a review and assessment of the board’s contractual relationships.

The actions came out of an emergency meeting of the system’s board of directors Wednesday.

Chrencik has led the system as president and CEO since 2008. He received $4.2 million in annual compensation in fiscal 2017, according to the system’s most recent tax filing.

Before becoming CEO, he served as the system’s chief financial officer since 1984, when the system was incorporated. He has been credited as a leader of the system’s privatization.

Three board members have already resigned and another four have taken leaves of absence.

Mayor Catherine Pugh resigned from the board Monday after revelations she received $500,000 in payments for her self-published “Healthy Holly” children’s books. Pugh said this week she will refund the most recent $100,000.

Strategic planning consultant John W. Dillon and workforce consultant Robert L. Pevenstein resigned from the board Tuesday. Both had contracts with the system.

Four other members of the board with potential financial conflicts involving either themselves or businesses they own or are employed at — August J. Chiasera, former state senator and insurance broker Francis X. Kelly, James A. Soltesz and Walter A. Tilley Jr. — have taken voluntary leaves of absence.

Anger, frustration in Annapolis

The Maryland General Assembly is also intent on reforming how the UMMS board operates.

“I’m positive that a bill will pass and it will be objective and the public will be satisfied with what we have done,” said Senate President Thomas V. Mike Miller Jr.

Miller said there are issues beyond the contract with the mayor and it is not clear what contracts were bid and what contracts the board approved directly.

“I don’t think they did,” said Miller when asked if the board approved the book deal with Pugh. “I don’t think it was ever disclosed to the board. Obviously the insurance contract (with Kelly & Associates Insurance Group) they did. Someone makes two and a half million dollars off a contract … In fairness to Kelly insurance, there were involved with a lot of the (hospitals) before they were acquired by the University of Maryland (Medical) System.”

In the Senate, lawmakers continue to work on legislation sponsored by Sen. Jill Carter, D-Baltimore, that would at the very least impose a prohibition on members of the board using their positions for personal financial gain or for that of others.

The bill is expected to be amended to include additional requirements, including some proposed by House Speaker Michael Busch, D-Anne Arundel County, who himself is a longtime member of the medical system board.

Some of those amendments could include provisions for an independent audit, stricter term limits and other transparency measures.

House Minority Leader Del. Nicholaus Kipke, R-Anne Arundel, introduced the bill on behalf of Busch, who was absent.

“This is sort of an unprecedented move for the minority party to be in this position, but I stand in sincere solidarity with the speaker,” said Kipke, who expressed anger over allegations of what he called “self-dealing.”

He called the reports “really troubling, potentially despicable and just outright rotten.”

Busch’s bill incorporates the Senate bill’s prohibitions on contracts for board members. The board would also be prohibited from using sole-source contracts.

Additionally, it reduces the size of the voting member ship from 30 members to 25; gives the governor, Senate president and speaker of the House one appointment each; and requires that all board appointments be approved by the Senate.

Members would also be required to provide financial disclosure statements to the State Health Services Cost Review Commission. Elected and most public officials typically file those annual statements with the Maryland State Ethics Commission.

The disclosures would be available to the public, under Busch’s proposal, and the legislature would be provided annual summaries of those disclosures.

The financial conflicts were the subject of a meeting in Annapolis Wednesday between Chrencik, Burch, Miller and Gov. Larry Hogan. Miller described the governor as “exercised” about the situation and focused on Pugh and her book deal “for whatever reason.”

“The governor wanted to push that issue very strongly,” said Miller. “I asked the question also, why did it continue and they said ‘She continued to write more books.”

He said Hogan is holding up approval of four “holdover” board member appointments sent to him by the medical system board.

“He said, ‘We’re holding off. You clean up the mess and clean it now and we’ll see,” Miller said, describing Hogan’s reaction.

A spokeswoman for Hogan declined to comment Thursday.

Miller said he and Hogan pressed for answers regarding contracts including one with the mayor for books she had written. He said no details were provided as to who requested the checks be written, who signed them and who authorized the deal.

“Apparently there was no oversight on the audit committee, and the audit committee made decisions,” said Miller. “There were certain personnel who should have been there. Who wrote the check, who told them to write the check? That wasn’t answered. Hopefully, we’ll have those answers.”

Fallout in Baltimore

Pugh released her first official statement Thursday, more than a week after her contract with the system first came to light. She canceled her weekly press availability Wednesday because of illness.

She has served on the board since 2001. Her tenure includes a time period before she was elected mayor in 2016 when she served on the state Senate’s Finance Committee, the committee whose responsibilities includes hospital regulation.

In a statement released Monday, Pugh said she has returned $100,000 to the system, the most recent payment she had received.

The books were a passion project that she hoped would help advance health for children in Baltimore, she said.

“It was a project that I was passionate about, and I was excited for the opportunity to expand its reach,” she said in her statement. “I recall passing the time by thumbing through the first book before an UMMS meeting. One my colleagues loved it and thought it would help advance children’s health.”

Taxes have always been paid on the revenue from the system, and Pugh said she has updated her Senate financial disclosure forms “to be transparent upon learning that these transactions were disclosed on one set of forms but not another.”

She will not be deterred by the current anger with her deal with the system, Pugh added.

“I plan to keep working to improve the health of children in our city, and I will keep writing – with this experience in mind,” she said.

 

 


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