CarePay contract: ‘No comment’ not satisfactory

What is the legal justification for the Cayman Islands government pulling the rug out from under its healthcare claims system provider, Advanced Information Systems Cayman Ltd., and switching over to a U.S. company?

Does the government’s decision have anything to do with the police investigation into former Health Services Authority Board Chairman Canover Watson, who was arrested in August on suspicion of corruption-related offenses and alleged money laundering activities, but who has not, as of press time, been charged with any crimes?

Does it have anything to do with the growth in “bad debts” owed by patients since AIS’s CarePay contract was signed, from $40 million in 2010 to an expected $70 million in June 2015?

Does it have anything to do with lawmakers’ scrutiny of AIS’s 4 percent charge on each CarePay transaction, in addition to the reported millions handed over by government in the form of a “capitalization fee” — the ultimate beneficiary of which, nobody seems to know — and “implementation costs”?

What is the basis of AIS Jamaica chief executive Douglas Halsall’s claim that the Cayman government is breaching its five-year CarePay contract with AIS’s sister company, Health Adjudication Systems?

What, exactly, is going on here?

In the words of Finance Minister Marco Archer, “Given the nature of the matter, we have no comment.”

Given the nature of the Cayman government’s track record (abysmal) of following through on its commitments and contractual obligations, quite frankly, a simple “we have no comment,” is not satisfactory.

Lest anyone forget, these agreements were signed by government officials who, after all, are proxies of the Cayman people. Caymanians use the services, pay for them, and will foot the bill for any forthcoming battles in civil court, should they occur.

If the government has a supportable legal reason for altering or abandoning the AIS contract, (for example, demonstrable nonperformance), why should it not share its reasoning with the Cayman people? Certainly they could at least identify the relevant escape clause in the contract.

Since no charges have been filed against Mr. Watson, much less any convictions recorded, he is presumed innocent. As far as we are aware, apart from Mr. Watson, no one else has been formally accused of wrongdoing in connection with this matter.

In the absence of further explanation, what we have here appears to be another instance of Cayman’s government signing a binding contract with a private entity and then unilaterally altering or abandoning its provisions.

Present and past governments have behaved similarly with such frequency that it is tedious to compile a comprehensive list of spurned suitors and their projects. Certainly that list would include the Dart Group which, by itself, has been trifled with on projects involving electricity generation, cruise berthing, the George Town Landfill, the rerouting of a stretch of West Bay Road and future hotel development. The government has also announced, then un-announced, agreements on a new cruise port with (in addition to Dart) Atlantic Star, GLF and China Harbour Engineering Company.

Similarly, the Canadian government’s Canadian Commercial Corporation thought it had made a strong case for redeveloping Grand Cayman’s airport before that proposal ultimately was rebuffed. Then there’s landfill scrapper Matrix International, high schools construction contractor Tom Jones International, owners of the now-shuttered Alexander Hotel, etc., etc.

In regard to the deepening morass around CarePay, the government has either broken a binding contract (as AIS asserts), or, at minimum, failed to provide a remotely sufficient explanation for its decision to drop AIS in favor of its third party claims administrator.

If it seems we are holding Cayman’s government to a high standard, that’s because we are. Indeed, in terms of consistency of conduct, and the perception thereof, governments must be held to the very highest standard.

Because the government represents the people of the Cayman Islands to the wider world, it must not only behave as an absolutely trustworthy partner, it must also – for reputational reasons – be seen as doing so.

3 COMMENTS

  1. ‘demonstrable nonperformance’ – isn’t that a matter of public record…

    http://www.compasscayman.com/caycompass/2014/06/27/Minister–Hospital-CarePay-system-failed-to-collect/

    It would appear that the CIG have given them 3 years to correct the issues – a private company would have stopped paying the 4% until a fully working system was delivered.

    How much of the projected 70M debt could be regarded as a ‘consequential’ loss – i.e. resulting from failings in the carepay system?

    Plus, if the police investigation is ongoing ‘No Comment’ is a prudent response.

  2. This is irresponsible journalism at its best. When there is a contractual dispute that could lead to potential litigation, it is not the job of the government to make public statements that could affect their position in court. This is a very basic and simple concept.

    While it is true that the elected officials represent the people, don’t confuse that to mean that government must answer any question, ever, in all circumstances.

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