The University of Maryland Medical System Board will look different soon – in composition and in policy.
As an explosive 41-page report examining self-dealing and family relationships between 11 board members and the medical system was released Wednesday afternoon, Gov. Lawrence J. Hogan Jr. (R) named 11 new members to the board, while UMMS leaders embraced many of the sweeping reforms that the report recommended.
Not all of the new board members will replace members who were named in the report – some of whom were invited this week to return to their positions after voluntary leaves of absence.
The entire board will be overhauled by Jan. 1 under reform legislation passed in Annapolis this year, which ends the terms of all current board members and subjects the medical system to tighter rules regarding financial deals.
The independent report released Wednesday afternoon details nine financial relationships between UMMS board members and the medical system, as well as two family relationships revealed on financial disclosure forms. It was prepared by Nygren Consulting, a Santa Barbara, Calif.-based firm that specializes in best practices for management of corporate and nonprofit boards of directors.
The report details more than five dozen separate relationships totaling millions of dollars. The relationships range from former Baltimore mayor Catherine E. Pugh’s contracts for printing her “Healthy Holly” books – which came under intense scrutiny and led to Pugh’s resignation from the board and her job at City Hall, as well as criminal investigations – to contracts with M&T Bank, whose senior vice president August J. Chisera serves on the UMMS board.
Chiasera was one of four UMMS board members who had been on voluntary leave and were asked to return to the board on Wednesday. The other returning members are Francis X. Kelly, James Soltesz and Walter Tilley.
Since March, six former members of the board have resigned. The medical system’s former chief executive, Robert Chrencik, was placed on a leave of absence and then left the organization in late April. Four other members of top management have also resigned.
The report – which included reviews of board and medical system documents, as well as interviews with about 60 current and former board members and UMMS employees – detailed multiple transactions involving UMMS board members that were not fully vetted by the board before being executed by members of management. Despite policies in place as far back as 2002, some transactions with board members did not appear to have been presented to the board or a board committee, according to the report.
The board adopted a new Conflict of Interest policy last month and other changes are on the way, including the establishment of a governance committee tasked with overseeing board practices, training on a new official “Code of Conduct” for board members and senior management, and new board structures that would lead to different chairs of the board’s Finance and Audit and Compliance committees. The chairperson of the Audit and Compliance Committee could have no financial or contractual relationship with UMMS.
The report recommends other changes including a focus on diversification of board members and establishing term and age limits to “help make room on the Board so that it can be constantly refreshed rather than becoming a stagnant governing body ill-equipped to govern emerging complexity.”
The board should also adopt new best practices in governance, create contract approval policies that go beyond the conflict of interest policy, adopt policies related to political activity and review whistleblower and document retention policies, among other things, Nygren wrote.
UMMS interim CEO John Ashworth said in a statement that he fully accepts the findings and recommendations in the report.
“Collectively, we are both responsible and accountable for what brought us to this point. This report serves as a roadmap – not only to increase accountability among leaders and establish a more effective Board structure – but to make progress toward real, lasting cultural change. Policies and procedures are not worth the paper they’re written on without an integrity-based culture to enforce them. I am committed to rebuilding that culture and restoring the trust of those that depend on our leadership,” Ashworth said in the statement.
“No person of authority should benefit personally from a decision he or she makes about the organization they serve. All Boards within the System must balance demand for expertise and leadership with conflict-free representation. This is simply not negotiable.”
The report notes that while a board member’s limited conflicts of interest do not necessarily invalidate a person as a valuable board member, great care should be taken to ensure that board members with potential conflicts don’t participate in any related discussions or decisions.
While the legislation passed this year allows outgoing board members to apply for reappointment this year, Hogan indicated a desire last month to oust the entire board.
“I think we need to clean house,” he told The Baltimore Sun in early May. “There’s a bunch of them that want to go back, and they keep saying, ’I had nothing to do with that.’ But my preference is to get some fresh blood on there.”
In announcing the 11 new members on Wednesday, Hogan said, “I pledged that I would appoint new board members who will serve with integrity and accountability, and today, I am delivering on that promise.”
The new board members include a retired Appeals Court judge, an expert on ethics, and four people with extensive medical backgrounds. They are:
Basnight currently serves as senior vice president of supply chain for the American Red Cross. She previously served as chief of staff for the United States Mint during the Obama administration and as executive vice president for StrategyServ in Upper Marlboro. She replaces Steven Burch, the former UMMS board chair, who resigned.
Kathleen A. Birrane
An attorney, Birrane has been part of the Insurance Sector and the Litigation Practice Group at DLA Piper since 2012, specializing in insurance and reinsurance transactional and regulatory compliance matters. She previously served as a senior vice president of MLF Financial Group Companies and principal counsel to the Maryland Insurance Administration for the Office of the Attorney General. She replaces Belkis Leong-Hong on the UMMS board, who was term limited
Dr. Joseph A. Ciotola Jr.
Ciotola is health officer for the Queen Anne’s County Department of Health and medical director for the Queen Anne’s County Department of Emergency Services. He served as director of Adult Orthopedic Outpatient Services at the James Lawrence Kernan Hospital in Baltimore for over two decades and as an orthopedic consulting physician for the Baltimore Ravens. She replaces Robert Pevenstein, who resigned.
Clark is Hogan’s chief of staff. He will serve as Hogan’s designee on the UMMS board.
Wanda Queen Draper
Draper served as the executive director of the Reginald F. Lewis Museum of Maryland African American History and Culture in Baltimore. She was director of programming and public affairs for WBAL-TV 11, and director of community affairs and visitor services for the National Aquarium in Baltimore. She replaces John Dillon, who resigned.
Frankl, the senior managing director of FTI Consulting, Inc., is “a recognized expert in the areas of compliance and corporate governance, notably to dozens of pharmaceutical, biotech, medical device, and health care services companies,” according to Hogan’s office. He replaces Kevin O’Connor, who resigned.
Glenn T. Harrell
Harrell served on the Maryland Court of Appeals for 16 years, until his retirement in 2015. He served on the Court of Special Appeals before that. From 2004 to 2009, he was a member of the board of directors for the Advanced Science and Technology Adjudication Resource Project, which trained judges to manage litigation involving bioscience and biotechnology. He replaces John Coale, who was term limited.
Rear Admiral Joyce M. Johnson (ret.)
Johnson served as a clinical and adjunct professor at Georgetown University, surgeon general in the U.S. Coast Guard, and in senior scientific and management positions with the Food and Drug Administration and the Substance Abuse and Mental Health Services Administration. She replaces Wayne Gardner, who was term limited.
Phipps serves as senior vice president and group operating executive for Ascension Health, the largest Catholic health system in the United States. She was CEO at St. Agnes Healthcare in Baltimore, and president and CEO of St. Joseph’s Health System, St. Agnes Healthcare, and PROMINA Health System, Inc. She replaces former Baltimore County executive James Smith (D), who was term limited.
Joseph T. N. Suarez
Suarez is director and executive adviser for community partnerships with Booz Allen Hamilton, the management consulting firm. Previously, Suarez served as deputy director of operations for the Smithsonian National Air and Space Museum, managing partner at Advanced Managing Group, and acting general manager of the Donor Marketing Division for the American Red Cross. He replaces former state House majority leader D. Bruce Poole (D), who was term limited.
John T. Williams
Williams is chairman and CEO of Hagerstown-based Jamison Door Company. A former media executive, Williams served as president and CEO of Gray Communications Systems, which owns a chain of television stations, and as president and COO of Garden State Newspapers. He replaces Scott Rifkin, who resigned.
James C. “Chip” DiPaula Jr., who served as chief of staff to former Gov. Robert L. Ehrlich Jr. (R), was elected UMMS board chairman on Wednesday. He is the co-founder of Flywheel Digital, an e-commerce firm.
The board also elected Alexander Williams Jr., a retired federal judge, as vice chair.
Hogan’s office said he will make additional appointments in the coming months.
Because the legislature has adjourned for the year, these are recess appointments. The new members will be subject to confirmation by the Maryland Senate next year.