Chrencik steps down from UMMS

Robert Chrencik, former president and CEO of the University of Maryland Medical System. (The Daily Record / Bryan P. Sears)

Robert A. Chrencik, who as president and CEO of the University of Maryland Medical System oversaw a period of tremendous growth but whose tenure was marred by a scandal involving contracts to members of the system’s board, resigned Friday.

Chrencik took a leave of absence from the system last month amid growing scrutiny over contracts given to members of the system’s board.

Michael Ricci, a spokesman for Gov. Larry Hogan, on Friday issued a statement saying: “UMMS has a lot of work to do to restore trust, but this is an important step in the right direction. The governor believes very strongly that with a change in leadership must come a change in culture, meaning real accountability and transparency.”

At UMMS, John W. Ashworth, who has served as interim president and CEO since Chrencik went on leave last month, will continue to serve in that role.

“Today the Board of Directors and I received and accepted Mr. Chrencik’s resignation from UMMS, effective immediately,” Ashworth said in a statement. “We thank Mr. Chrencik for his leadership, service and commitment during his 35 years of executive employment at UMMS.”

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

Baltimore Mayor Catherine Pugh, a board member for nearly two decades, resigned March 17 after revelations that she received $500,000 in payments for her self-published “Healthy Holly” children’s books. Pugh has said she refunded the most recent $100,000 payment.

Board members John W. Dillon and Robert L. Pevenstein resigned from the board on March 18. Both also had contracts with the system.

Four other board members with potential financial conflicts involving either themselves or businesses they own or are employed by — 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.

Chrencik 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.

Previously, Chrencik served as the system’s chief financial officer starting in 1984, when the former state hospital system was privatized. He has been credited as a leader in the system’s transition.

A decade of growth

The system grew significantly during Chrencik’s tenure as CEO.

In 2008, the health system had 11,500 employees, more than 1,700 licensed beds, 83,000 annual admissions and revenues of $2 billion.

Today the hospital employs more than 25,000 people in more than 150 locations, including 13 hospitals. It has more than 2,800 licensed beds and revenues of $4.4 billion.

Chrencik presided over large additions to the hospital system.

He was involved in a deal that provided more than $150 million in state funding for a new hospital in Prince George’s County while also affiliating what was then called Dimensions Healthcare System with the University of Maryland Medical System. Dimensions is now University of Maryland Capital Region Health.

Chrencik also oversaw the system’s transition from a fee-for-service system to an all-payer system. Those efforts have included converting some smaller hospitals into free-standing medical facilities, medical centers that have emergency services and outpatient surgery facilities but that direct most inpatient care to larger hospitals.

The conversion movement involves building state-of-the-art hub hospitals in Prince George’s County, Harford County and Talbot County. The facilities are all still in the planning or construction phases.

A controversial end

Despite the significant growth of the medical system, Chrencik will most likely be known for the scandal that marred the final months of his tenure.

Legislation filed by Sen. Jill Carter, D-Baltimore, to overhaul the University of Maryland Medical System’s board of directors brought close attention to lucrative contracts and deals that members of the board had with the system.

Those included Pugh’s $500,000 contract for her Healthy Holly books, former Sen. Francis X. Kelly’s millions of dollars every year for insurance contracts, and consulting contracts paying hundreds of thousands of dollars that went to other members of the board.

Pugh’s City Hall office and both of her Baltimore homes, along with the offices of associates, were searched by federal agents Thursday morning.

The University of Maryland Medical System has received a grand jury witness subpoena as part of the Healthy Holly probe.

The system has hired Nygren Consulting to review the board members’ financial relationships with the system, board governance policies, processes and procedures.

Carter’s legislation, signed into law by Republican Gov. Larry Hogan last week, imposes stricter ethics and disclosure standards on board members of the medical system. The law took effect immediately.

The new law will eventually result in the replacement of all current members, prohibit members from engaging in sole-source contracting with the medical system, and require members to submit annual financial disclosures.

Chrencik’s resignation should have happened earlier, said Del. Nicholaus R. Kipke, R-Anne Arundel and the House minority leader, who led the reform legislation through the House because its sponsor, then-Speaker Michael E. Busch, D-Anne Arundel, was hospitalized.

“I felt all along since we found out (Chrencik) knew all about the Healthy Holly books he should not be paid and should resign,” Kipke said. “I can’t understand how someone in his position could look the other way or participate in paying an elected official hundreds of thousands of dollars … for books. It makes me question what else was going on there and I look forward to the results of the forensic audit. Maybe we’ll learn more from the FBI and the IRS.”

The departures should not end with Chrencik, Kipke said. He did not name names but said anyone who knew about the contracts — and especially the book deal — “needs to go.”

“This type of shadiness is damaging the organization,” he said.

A forensic audit of the system required by the reform legislation is expected to be complete by the end of the year.

Daily Record government reporter Bryan P. Sears contributed to this report.