The University of Maryland Medical System has adopted a conflict of interest policy consistent with reforms required by the state legislature and signed into state law last month.
The new policy includes prohibition on sole-source contracts with system board members, sets recusal requirements for non-independent board members and restricts board leadership positions to independent board members.
“This is another major step forward as we improve board governance, change corporate culture and put UMMS on a strong path forward,” John Ashworth, the system’s interim president and CEO, said in a statement. “We thank the legislators for their work in guiding this policy during the session and helping us focus on providing a sound, long-term foundation for a sustainable, effective Board.”
The system also posted the new conflict of interest policy online.
In the spring, it was disclosed that almost one-third of the UMMS board members had some sort of financial relationship with the system. While the lion’s share of the attention focused on now-resigned Baltimore Mayor Catherine Pugh, who received $500,000 for her “Healthy Holly” children’s books, other board members also took leave or resigned. Two audits have been launched and a federal grand jury probe has begun.
Last month, UMMS CEO Robert Chrencik resigned from the board.
Board members Stephen Burch, John W. Dillon, Kevin O’Connor, Robert L. Pevenstein and Dr. Scott Rifkin have resigned from the board. Burch and O’Connor’s resignations are effective July 1.
Four other board members with potential financial conflicts involving either themselves or businesses they own or are employed by — former state senator and insurance broker Francis X. Kelly, James A. Soltesz, M&T Bank executive August J. Chiasera and Walter A. Tilley Jr. — have taken voluntary leaves of absence.
Legislation signed last month by Gov. Larry Hogan aimed at strengthening oversight of the board and requiring more transparency to its operations. It included a provision that will eventually replace all current members.
The law also will prohibit members from engaging in sole-source contracting with the medical system and require them to submit annual financial disclosures.
The system has contracted Nygren Consulting to review its practices. Nygren will also work with the system to implement its recommendations.
“I am working closely with the board to enhance accountability, prepare the organization for the upcoming board transition, and ultimately, change the components of our culture,” Ashworth said. “We know true reform is a process and we remain focused and dedicated. We remain committed to our mission of caring for the people of Maryland and restoring the trust of those we serve.”