Brown to receive $1.2m compensation in total
Former premier Ewart Brown is likely to receive more than $1.2 million in total from the public purse for financial losses suffered at his two medical clinics, health minister Kim Wilson has revealed.
Ms Wilson defended the Government's decision to pay the compensation to Dr Brown in an interview with The Royal Gazette, describing him as having suffered “economic sanctions” at the hands of the former One Bermuda Alliance administration when it slashed the fees for diagnostic imaging scans in June 2017.
The Minister of Health said in addition to a $600,000 payment she disclosed to Parliament in February, Dr Brown has since been given another $220,000 in financial supplements and her ministry estimated he would receive a further $420,000.
Police, meanwhile, revealed yesterday that detectives are still investigating the two clinics, Bermuda Healthcare Services in Paget and the Brown-Darrell Clinic in Smith's, over allegations they ordered medically unnecessary tests for patients to boost profits.
A police spokesman said: “The matter is still under investigation and, as such, no further comment can be made at this time.”
The allegations have been denied by Dr Brown and he has not been charged with any offence.
In 2017, Dr Brown was named as a “non-party co-conspirator” in a lawsuit brought by the former OBA government against the Lahey Clinic in the United States.
The civil complaint alleged that he and Lahey profited from excessive and medically unnecessary scans on patients at the expense of the public purse — a claim both Dr Brown and the hospital denied.
That case was dismissed by a Massachusetts judge in March and dropped by the Progressive Labour Party government.
The Ministry of Health said in January that financial supplements granted to Dr Brown's clinics and to the Bermuda Hospitals Board due to the fee cuts were “in order to help ensure CT and MRI services are readily available to the public”.
But Ms Wilson said on Wednesday that the decision to pay public funds to Dr Brown's two private clinics was not an attempt to ensure that his CT and MRI scanning units stayed open and there was no discussion with him about keeping them open. The CT scanner at Brown-Darrell closed in January and will reopen in November.
“The objective of the supplemental or whatever you want to call it was simply to address the fees and to make sure that the fees that were charged were reasonable in the circumstances,” the minister said. “It was simply about the fees and what should be reasonable.”
Asked if she had politically interfered on Dr Brown's behalf, as he requested she do in an e-mail sent last August, which was disclosed under public access to information, Ms Wilson replied: “The Government felt that we were required to take positive steps to address a decision or an action of the former government that saw drastic fee reductions in diagnostic imaging to the community providers, as well as Bermuda Hospitals Board.”
The fees charged for scans at Dr Brown's clinics are aligned with BHB's, because he opted to be a provider of Standard Health Benefit procedures, which are services that insurers must include in their health insurance coverage.
That means that if the hospital's fees for CT and MRI scans go up or down, so do the fees at the Brown-Darrell Clinic and Bermuda Healthcare Services. Insurers are required by law to reimburse all SHB services, including BHB, Dr Brown's two clinics and six other SHB providers.
Ms Wilson said the sharp fee cuts for scans came about because the OBA administration ignored advice from technical officers at both the Bermuda Health Council and the Ministry of Health to apply a new fairer methodology for calculating fees to the entire BHB fee structure, not just diagnostic imaging fees.
Implicit in that advice, she said, would have been the principle of “revenue neutrality”, meaning that though some fees would change, they would be balanced across the board to ensure the overall revenue for SHB providers remained the same.
Ms Wilson said her predecessor as health minister, Jeanne Atherden, decided instead to apply the new methodology for calculating fees only to CT and MRI procedures — and did not adopt the revenue neutrality principle, so overall income for the providers, Dr Brown and BHB, sharply declined.
Asked how the decision was reached to compensate Dr Brown, the only private healthcare provider affected by the change in fees, the minister said: “I don't want to reveal discussions that I would have had with my Cabinet colleagues.”
She added: “However, it was abundantly clear that there were some very sharp fee reductions. Many might argue that they were designed specifically to economically disadvantage the community providers [the Brown-Darrell Clinic and BHCS].
“The Government felt that it was economic sanctions, so to speak, [that] were issued against a community provider because it seemed extremely odd that technical advice suggesting to apply the [new] methodology to all of BHB fees was ignored and the Government at the time opted only to apply it to diagnostic imaging.
“The effect of that resulted in substantial fee reductions for the community provider and the Government felt that we must take steps to effectively right the wrong.”
The Brown-Darrell Clinic has been paid $139,161 for CT scans carried out between June 1, 2017 and January 31, 2018, when the unit was closed by Dr Brown.
BHCS has been paid $680,966 for MRIs conducted between June 1, 2017 and March 31, 2018. The estimated additional $420,000 would be for MRIs carried out between April 1 and October 31.
Compensation for BHB was made by reducing a debt it owes to the Superannuation Fund by $1.8 million and it is expected to get a further $600,000.
The Minister said BHB, the Brown-Darrell Clinic and BHCS were compensated for actual procedures carried out — with taxpayers paying the difference between the fees imposed by the OBA and the fees recommended by the technical officers.
Those differences vary from less than $80 to almost $500.
Ms Wilson said she had not had any discussion with Dr Brown about him opting out of being an SHB provider, although he has that option. If he was not an SHB provider, his clinics could charge whatever they liked for scans but without a guarantee that insurers would reimburse them.
New fees for all BHB procedures come into effect on November 1.
Ms Atherden said the claim that she ignored technical advice was false.
“It may be that the timing of the accusation provides cover for a decision that the Government felt it could not easily defend,” she added.
The former Opposition leader queried why the Progressive Labour Party did not raise concerns about the change in fees for diagnostic scans when a Bill was passed in Parliament last May.
“There was no debate or question raised regarding the funding policy for medical scans and no ‘wrong' was identified in this regard,” she said.
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