2008 Woodie Awards
UMMS Misled State When Requesting Funds for Failed Ambulatory Care Center
Construction to Terminate Upon Completion of Parking Garage
Clarence Lam
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Published: September 7, 2008
The University of Maryland Medical System (UMMS) was aware as early as a year ago that its plans for the creation of a new ambulatory care center had fallen through but continued to request government funding for the project while providing an incomplete picture to state officials regarding its progress.
In August, several media reports broke news that the massive eight-story, 500,000 square foot, $325 million ambulatory care center would not be completed and construction would terminate after the completion of a multilevel underground parking garage.
However, officials at the University of Maryland School of Medicine (SOM) and the Maryland Health Care Commission (MHCC), the agency that oversees hospital development, received indications months earlier of changes in plans for the ambulatory care center project.
“It was a while ago—nine months to a year—that the decision was made [by UMMS] to put it on hold,” said E. Albert Reece, dean of the medical school. The school had sought an agreement to utilize the building upon its completion and was thus aware of the project’s progress, but according to Reece, the school played no role in UMMS’s decision.
MHCC said it received official notification on August 18, 2008 that the center would not be completed, but it first heard indications that UMMS was considering changes to the project in March as part of quarterly progress reporting requirements. The changes were primarily functional in nature, such as increasing the number of inpatient care beds at the center, but MHCC had no forewarning at that time that the project was going to be halted.
“All indications at that point were that it was still going to be used in some type of patient care capacity,” said Pam Barclay, director of MHCC’s hospital services.
Officials at UMMS did not respond to repeated requests for comment.
State Officials Were Kept in the Dark
On February 21, 2008, then-UMMS CEO
“The cornerstone of [the current UMMS facilities redevelopment program] will be the construction of a new comprehensive
UMMS was subsequently granted an additional $10 million specifically to support the construction of the ambulatory care center.
State budget officials denied receiving any notification during the legislative session earlier this year that plans for the project were off target.
An official in the Department of Budget and Management, the state office that reviews justifications from agencies requesting funds and develops the governor’s annual budget before it is submitted to the General Assembly, said he received notification from UMMS in August 2008.
Analysts at the Department of Legislative Services, which provides budget analyses to General Assembly lawmakers also first heard of changes to the project in August.
“That would have been a major issue,” said a legislative analyst in referring to knowledge by UMMS officials that the building would likely not be completed as planned. “Frankly, it would probably have resulted in it not being funded [during last year’s session].”
State Senator Verna Jones, a member of the Budget and Taxation Committee and whose district includes the site of the ambulatory care center, first learned of plans to halt further construction “when a reporter called me a few weeks ago [in August 2008].”
“I think that anytime any major decisions are being made, the General Assembly should be kept abreast,” said Jones in referring to projects funded by the state. “At minimum, [the committees involved in the state’s capital budget] should be kept up on what’s going on.”
Concerns of UMMS Accountability
UMMS was set to receive a total of $62.5 million in state funds through 2013 for the construction of the ambulatory care center.
However, with recent plans to end the project early, state officials are unsure of how much funds have been spent on the project up to this point. According to Barclay, the MHCC has requested a full accounting of funds received and expenditures spent on the project from UMMS.
State budget officials representing the governor and legislature will be meeting over the next several months with UMMS to determine the state’s final contribution to the incomplete ambulatory care center. Money that has already been provided to the hospital system may be reprogrammed for other projects if approved by the General Assembly.
In the meantime, concerns linger surrounding inconsistencies in what UMMS leadership knew regarding changes in plans of the ambulatory care center when the system requested additional funds earlier this year.
“If you’ve got indications that they had always intended to do something different or long ago intended to do something different, the fact that they went in front of the committees this March and basically nodded their head and said yes, ‘we need this $10 million to continue this project,’ that would present a problem,” said the analyst at the Department of Legislative Services.
Senator Jones agreed and stated, “If they made this decision a year ago and they come back and present the project as if it’s going forward, that’s fraudulent.”
Amid the recent controversy over the ambulatory care center, Reece contends that recent media reports based on allegations by former UMMS officials and board members insinuating that the SOM played a role in the demise of the project were untrue.
“We submitted this formal, very expensive proposal [to UMMS to utilize the center after its completion], and waited to have negotiations as to how to make it happen,” said Reece. He added that UMMS rejected the proposal without negotiation citing “a change in their capital plans.”
“It had nothing to do with us,” said Reece. “That’s the irony.”
Reece explained that while he knew nine to twelve months ago of the decision to hold further construction of the ambulatory care center, he felt uncomfortable with commenting publicly on a project owned by UMMS.
“The decision to notify the appropriate individuals is obviously the responsibility of the medical system,” he said.
New Leadership Brings Hopes for Improved Partnership
Over the last several months, UMMS has faced turnovers in its upper leadership. In July, Notebaert announced his retirement after five years as the system’s CEO. Then in a contentious meeting on August 20, UMMS Chairman John Erickson and nine other members of the board of directors abruptly resigned.
The following day, Robert Chrencik, who previously served as the UMMS chief financial officer, was appointed by its board to serve as interim CEO pending a national search to permanently fill the position. Michael Busch, the speaker of the House of Delegates and a member of the UMMS board, was selected to serve as its interim chairman.
The recent changes in leadership in the hospital system bring have brought new hopes of greater accountability and partnership.
“The relationship had been fairly strained when Mr. Notebaert was there,” said Jones in referring to her interactions with UMMS. “I felt the last administration was not very forthcoming.”
Reece pointed out that reaction within the medical school to Chrencik’s appointment has been positive. “We’ve had these unfortunate events, but we’ve moved on,” he said. “I see that the future of our partnership is very bright, very strong.”