CarePay contract under review

The contract agreement for public hospital patient swipe cards, known as CarePay cards, is now under review, Finance Minister Marco Archer said this week.

“The contract is being reviewed by CINICO and the Health Services Authority and a decision will be made subsequent to the review being completed,” Mr. Archer said.

Questions were raised in the Legislative Assembly’s Finance Committee as to whether the swipe card system had met its goals, including whether it was helping to reduce the Health Services Authority’s bad debts. As of June 30, the authority’s past due debts of more than a year stood at $55 million. By the end of June 2015, the amount is expected to increase to $70 million.

The potential to reduce bad debt was promoted by CINICO and the authority as a benefit of the card swipe system.

According to tender records issued on Dec. 6, 2010, to then-Health Services Authority board chairman Canover Watson: “The HSA is expected to save in excess of $2 million from reduction in bad debts plus savings in administrative cost.”

Mr. Archer also raised issues in Finance Committee last month over what some members referred to as a lucrative contract for the card swipe system now used by all patients covered by CINICO at the Health Services Authority hospital and health clinics.

The contract was awarded on Dec. 21, 2010, to AIS Cayman Ltd., an agent of St. Lucia-based Health Adjudication Systems, for a five-year period. According to the contract, a copy of which was obtained by the Cayman Compass, AIS Cayman Ltd. was to receive US$1.37 million for initiating and implementing the computerized card swipe system. In addition, it would receive from CINICO and the health authority 4 percent of the value of every swipe card transaction approved for payment.

The 4 percent charge on the value of each claim was split between CINICO, which was responsible for paying 1.5 percent of it, and the Health Services Authority, which would pay 2.5 percent, according to the contract.

Bid documents for the project obtained by the Compass indicated the total costs over the five-year agreement were estimated at US$13.6 million (CI$11.15 million), including the US$1.37 million for the set-up expenses.

“I want to find out who the ultimate beneficial owner of this company is. There’s a lot of money being paid for this company and we don’t know who it’s going to,” Mr. Archer said during the June committee hearing.

On Wednesday, Mr. Archer identified the shareholders of AIS Cayman Ltd. as local resident Joscelyn Morgan, who holds 60 percent of the local company’s shares, and Douglas Halsall, who holds 40 percent of the shares.

Mr. Halsall is the chief executive officer of Advanced Information Systems Ltd., which is located in Kingston, Jamaica, according to a company website. Attempts to contact him Thursday at the Jamaica offices were unsuccessful. Mr. Morgan also could not be reached by press time. Other directors involved in AIS Cayman Ltd. were not identified by Mr. Archer on Wednesday.

The local offices for AIS Cayman Ltd. have an address of 37 Fairbanks Road, which is a condominium complex in George Town.

CINICO chief executive Lonny Tibbetts said this week he was not the company’s chief executive when decisions were made and that he only joined the entity in December 2010 when the contract was being finalized. “If AIS [Advanced Information Systems] managed to negotiate a contract [like that] … that’s in their remit and the powers-that-be at the time,” he said.

The contract was signed by five people in December 2010: Mr. Tibbetts, Mr. Halsall, former Health Services Authority Medical Director Dr. Greg Hoeksema (signing as acting chief executive officer of the HSA), then-HSA board chairman Canover Watson and then-CINICO chairman Scott Cummings.

Officials in Mr. Archer’s finance ministry and Osbourne Bodden’s health ministry, which is responsible for the Health Services Authority, met with CINICO and hospital managers Wednesday to review the entire CarePay issue.

Cost breakdown

According to the December 2010, the US$1.37 million paid by the government for set-up fees related to the AIS Cayman Ltd. contract included the following expenses:

US$650,000 for license fees

US$450,000 for a one-time system set-up charge

US$12,000 for card production

US$70,000 for the beneficiary registration (enrollment) system

US$15,000 for installation

US$175,000 for offshore backup services.

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