Medical Center Responds to Controversy About Senior Leadership Salaries

Schneider Regional Medical Center on St. Thomas (File photo)

Dr. Luis Amaro, who will effectively serve as Interim CEO of Schneider Regional Medical Center (SRMC) starting Feb. 1 along with District Governing Board Chairman Cornel Williams, has responded as follows to public concerns regarding salary increases for SRMC Senior Leaders.

Until very recently, revenues from hospital operations, together with the uncompensated care allotments from the local government, were not at a level sufficient to meet long overdue wage increases in accordance with the collective bargaining agreements.

Over the past five years, the senior leadership team of SRMC has been focused on a program of continuous improvement. The team implemented a five-year strategic plan devoted to establishing financial solvency and creating service lines to serve this community. The result is a cash balance today that is six-times higher than the average balance SRMC has carried for the past few years.

Under the direction of this current leadership team, CFO Scott Nothnagel and the financial staff of SRMC worked diligently to identify past federal funding reporting errors that led to the medical center’s receiving Medicaid retro payments of over $11.5 million.

The finance team also worked with the Department of Human Services (DHS) and a third-party auditor to correct cost adjustments to the reimbursement rates owed to the providers in the Medicaid program. As a result of these efforts, the territory benefited by receiving $39 million of Medicaid funds, of which SRMC received $13.5 million.

SRMC utilized these funds to settle vendor liabilities, pay-off its debt to WAPA, make capital improvements, and implement salary increases for nurses and all other rank and file employees. Once these payments, financial agreements and salary increases for staff were all taken care of, further analysis indicated that SRMC had the ability to offer a modest increase to the senior leadership team. Most of SRMC’s employees, including the senior leadership team, had not received a pay raise in ten years.

The total amount allocated to the senior leadership team ($71,000) is less than 1 percent of the current cash balance. The average increase for this group is 5 percent. The retroactive compensation period dates back to Oct. 1, 2019, and not Oct. 1, 2018, as previously reported.

Funds to rebuild SRMC facilities that were damaged by hurricanes Irma and Maria were not affected by these salary increases. Funding to renovate our facilities is federally based and is currently being finalized through FEMA. Approximately 90 percent of the medical center’s operations have resumed since the impact of the hurricanes in 2017, due to the hard work and diligence of SRMC employees.

Interim CEO Dr. Luis Amaro said SRMC would continue to be prudent in its spending and investments. SRMC has made it its mission to become a highly reliable organization, making quality care and patient safety our priority. It will invest in technology to create a modern healthcare system. The medical center’s goal is to fully staff its nursing units and emergency department, continue with its capital improvement projects, and develop clinical services to meet the demands of its community.

SRMC will continue to recruit and appropriately compensate all of its qualified and talented workforce. SRMC’s recent financial success proves its ability to successfully “perform,” achieve revenue growth, effectively manage operating expenses, and demonstrate extreme financial stewardship.