|
LOU CHIBBARO JR.
Friday, May 20, 2005
The Whitman-Walker Clinic’s board of directors discussed plans for reducing
the size of the clinic’s workforce and cutting many of its programs this
week after a shortage of funds forced the clinic to withhold half of its employees’
paychecks.
News that the clinic had only enough cash on hand to pay half of its $475,000
payroll for May 13 came one week before clinic officials disclosed another potential
bombshell — a possible bookkeeping error caused Whitman-Walker to overcharge
the District government as much as $2 million in fees for laboratory tests over
a period of about five years.
The clinic’s discovery of the overcharging, through an audit it conducted
on its own, prompted clinic officials to stop billing the city for as much as
$75,000 per month in lab fees for AIDS-related tests until it can determine
how much it must repay the city for the over-billing, said Roberta Geidner-Antoniotti,
the clinic’s interim executive director.
Suspending its billing for the lab services for the city has compounded the
clinic’s money problems, which have resulted in the clinic’s inability
to pay some of its own creditors and vendors during the past several months.
“We will continue to suspend all non-essential spending, and will need
to delay payments to as many vendors as possible in the near-term,” Antoniotti
told the clinic’s staff in an internal e-mail message on May 5.
Antoniotti said that while declining contributions from private donors played
a role in the current financial crisis, the missed payroll was triggered by
a longer than usual delay by the D.C. HIV/AIDS Administration in reimbursing
the clinic for hundreds of thousands of dollars in expenses for AIDS-related
services.
The delay in reimbursements drew sharp criticism from members of the D.C. Council
during a May 18 hearing called by Councilmember David Catania (I-At-Large),
who chairs the Council’s Committee on Health. Catania and Councilmembers
Carol Schwartz (R-At-Large), Jim Graham (D-Ward 1), and Vince Gray (D-Ward 7)
criticized HAA for failing to fix what they called a chronically dysfunctional
reimbursement system that has wreaked havoc on Whitman-Walker and more than
a dozen other non-profit groups providing services to people with AIDS.
Witnesses representing Whitman-Walker and other AIDS service groups testified
that the reimbursement problem has existed for years and that repeated appeals
for quicker payment of funds for services have gone unanswered by HAA.
Catania recessed the hearing before Department of Health Director Gregg Pane
and HAA Director Lydia Watts had a chance to testify, saying he wanted them
to return on May 20 — when he would resume the hearing — with “real
solutions” for the reimbursement problem.
Sources familiar with the clinic have said top clinic officials believe the
financial problems are so serious that the clinic’s ability to remain
open could be in doubt if drastic measures are not taken to reduce spending.
Antoniotti sought to calm fears about a possible shutdown in her May 5 e-mail.
“I understand that there is some confusion about my statement on Friday
[April 28] that the clinic could close,” she stated. “I want to
clarify that I didn’t mean for you to hear that as something that might
occur tomorrow. I meant to communicate that our survival and health as an organization
over time are dependent upon our making sound financial and operational decisions
now.”
Similar to other non-profit organizations, Antoniotti said, the Sept. 11, 2001,
terrorist attacks adversely affected the clinic’s fund-raising, along
with a sluggish national economy.
But clinic board president Billy Cox said Whitman-Walker’s money problems
stem from decisions made years earlier to expand the clinic’s services
at a pace that surpassed its ability raise the money to pay for the services.
“The bottom line is the clinic got too big,” Cox said. “There
is no longer enough money to support all of these programs, which have helped
so many people in need.”
Cox said the board and staff would do all they could to preserve all of the
clinic’s programs deemed crucial to its more than 7,000 clients. One possible
option, he said, is to arrange for other local AIDS and health organizations
to take over some of the clinic’s programs, enabling the clinic to “downsize”
its operations.
In addition to its medical services to people with HIV and AIDS, the clinic
operates a wide range of services for lesbians and gay men, including sexually
transmitted disease testing and treatment, mental health counseling and treatment,
substance abuse treatment and recovery programs, breast cancer screening, and
services for lesbians having children, among other programs.
The clinic’s AIDS programs include HIV testing and counseling services;
HIV prevention programs aimed at high risk populations, including gay and bisexual
men; outpatient medical services; and legal assistance associated with HIV discrimination,
preparation of wills, and assistance for clients in applying for government
programs such as Medicaid.
Whitman-Walker currently has a staff of 270 full-time and part-time employees,
Antoniotti said. Its current annual budget is $30 million, she said. Fifty-seven
percent of its revenue comes from federal, state and local governments, including
the governments of D.C., and suburban D.C. area counties in Maryland and Virginia.
The current funding problem marks the first time the clinic has missed a payroll
since its founding as a gay health clinic in 1973.
Antoniotti informed the clinic’s 270-member staff of the need to withhold
part of their salaries in a May 11 e-mail message.
“I am very sorry that we cannot meet the full payroll this week,”
she said. “We have had a shortfall in fundraising revenues due to a reduction
in AIDS Marathon registrations and our inability to pay our direct mail and
telemarketing vendors,” she said in the e-mail.
“We have been working diligently for several weeks with our funders to
get more than $800,000 in outstanding grants. We have turned to many leaders
in our community for help, including members of the City Council, the mayor’s
office and the city’s health director.”
She said the clinic’s 16 senior managers chose not to receive any pay
on May 13 in an effort to garner enough funds to pay the remaining staff at
least half of its salary.
Antoniotti said Wednesday that HAA this week released enough of its outstanding
balance due to the clinic to enable the clinic to pay the remainder of the staff
salaries by May 20.
She said she was also hopeful but uncertain that the clinic could meet the
full payroll for the next pay period on June 3.
“We’re still working on that,” she said.
The May 17 board meeting, which was closed to the media, was to include a discussion
on a detailed plan by the clinic’s senior staff for “restructuring”
the clinic’s staff and programs, Cox said.
When asked if staff restructuring would include layoffs, Cox said it would.
“I don’t know how many people will have to be laid off,”
he said. “We are going to have some very serious discussions on how to
carry out the restructuring,” Cox said.
On Wednesday, Antoniotti said the board and senior staff had yet to reach a
decision on which programs would be cut and by how much. She said those decisions
would likely be made during the next week or two.
Antoniotti said the clinic’s finances could be damaged further by a discovery
earlier this year that the clinic overcharged the District government for laboratory
services related to medical treatment of low-income people with HIV and AIDS.
Antoniotti said the discrepancy in billing the government for the laboratory
costs was based on a mix-up over whether the clinic should charge a market rate
or a pre-arranged government rate for the services under various city regulations.
It was the clinic that discovered the mix-up and brought the matter to the
government’s attention, she said. Antoniotti said both the clinic and
investigators with the U.S. Department of Health & Human Services are investigating
the matter to determine how much the clinic must reimburse the government for
the over-billing. HHS is involved in the probe because most of the funds for
the lab fees come from the federal government, which pays for various local
AIDS programs through the D.C. HIV/AIDS Administration.
Antoniotti, who has served as the clinic’s managing director of operations,
assumed the post of interim executive director in January after then executive
director Cornelius Baker resigned. Baker said he resigned for health reasons.
Antoniotti said the clinic began experiencing a decline in contributions from
private donors after the Sept. 11, 2001 terrorist attacks, which adversely affected
fund-raising for many non-profit organizations. An overall decline in contributions
to AIDS causes and a sluggish U.S. economy also hurt fund-raising efforts, Antoniotti
said.
Rather that cut its programs, the clinic dipped into what had been a sizable
cash reserve to make up for the fund-raising shortfalls, Antoniotti and other
clinic officials have said.
The depletion of the clinic’s cash reserves eliminated the financial
cushion it had in the past to cover the D.C. government’s longstanding
practice of taking three to six months to reimburse service providers like Whitman-Walker
for expenses associated with D.C. government contracts.
Lou Chibbaro Jr. can be reached at lchibbaro@washblade.com.
|
