Robert A. Chrencik resigned Friday as president and CEO of the University of Maryland Medical System, his long tenure at the hospital network ending amid the controversy surrounding accusations of self-dealing and no-bid contracting.
“Today the Board of Directors and I received and accepted Mr. Chrencik’s resignation from UMMS, effective immediately,” Acting CEO John W. Ashworth said. “This action is an important step in moving the Health System forward during this critical time and we remain focused on delivering exceptional, safe, quality health care across Maryland. We thank Mr. Chrencik for his leadership, service and commitment during his 35 years of executive employment at UMMS.”
Chrencik had been on paid leave since March 25 from the position, for which he was paid $4.3 million in salary and other compensation in 2017. He had been CEO since 2008.
A spokesman for the hospital network said the terms of Chrencik’s separation from the system are “still being determined.”
The resignation came a day after the medical system received a subpoena for documents in a federal investigation into Baltimore Mayor Catherine Pugh’s business dealings. The medical system said it received a “grand jury witness subpoena today from the U.S. Attorney’s Office for the District of Maryland seeking documents and information from UMMS in order to conduct their investigation of Mayor Pugh.”
FBI agents and IRS officials on Thursday also executed search warrants at City Hall, Pugh’s two houses, and offices of the mayor’s allies.
Republican Gov. Larry Hogan called Chrencik’s resignation “an important step in the right direction,” said Mike Ricci, his spokesman. “The governor believes very strongly that with a change in leadership must come a change in culture, meaning real accountability and transparency.”
Chrencik worked with the network’s flagship hospital since before the system was created in 1984, helping stabilize finances and assemble a 13-hospital conglomerate that now reaches every corner of the state and encompasses both a top-tier teaching and research institution and community health care providers.
UMMS has been under intense scrutiny since The Baltimore Sun reported last month that nine members of its board of directors have business deals with the system that are worth hundreds of thousands to millions of dollars each. Since then, three board members — including Pugh — have resigned. Four others have taken leaves of absence.
Chrencik became the face of the quick-moving scandal in Annapolis.
He had traveled to the State House to push back against a proposal to bar UMMS board members from entering into no-bid contracts with the hospitals they oversee. Despite his protests that the legislation was ill advised, it eventually passed.
Chrencik had defended the system's actions — including paying Pugh $500,000 for her self-published “Healthy Holly” books — even as he acknowledged that there was no competitive process for buying such books.
[ Coverage of University of Maryland Medical System board deals and Mayor Pugh's 'Healthy Holly' books ]
“There's no other book like it,” Chrencik said. “It was a win-win for the kids. … Where there's expertise, we're happy to try to leverage it.”
But Maryland political leaders reacted with outrage. House of Delegates Speaker Michael Busch called the controversy the largest “scandal” he could recall during his time in office and filed emergency legislation to reform the board. Hogan and Senate President Thomas V. Mike Miller, a Democrat, demanded Chrencik and board chairman Stephen A. Burch attend a closed-door meeting where the state officials demanded information about who authorized the deal with Pugh.
There's no other book like it. It was a win-win for the kids.— Robert A. Chrencik, UMMS CEO, on Pugh's "Healthy Holly" books
“The governor wanted to press that issue very strongly,” Miller said. “I asked the question also: ‘Why did it continue? ‘They said, ‘She continued to write more books.’ They didn't tell us who authorized the check, who signed the check and who approved the deal.”
Hogan described the meeting as “very direct, very forceful … where we left no uncertainty about our concern about some of the things that had been going on with the UMMS board.”
Ashworth later testified before a General Assembly committee that Chrencik had entered into the talks with Pugh about buying her books.
“We do know that the mayor approached us,” Ashworth told the House Health and Government Operations Committee. “She had direct conversations with the president and CEO at the time, and possibly others. But we need to look into that even more to make a determination about how all of that occurred.”
[ As a Maryland senator, Pugh pushed bills to benefit hospitals while getting book payments from medical system ]
Ashworth said the board has hired Nygren Consulting of Santa Barbara, Calif., to look into “the legality” of the contracts awarded to board members and evaluate the medical system’s policies and procedures regarding conflicts of interest and contracting. The consultant will also deliver recommendations about improvements UMMS can make in running the hospital system, he said.
An accountant by training, Chrencik served as the longtime chief financial officer before taking the helm during another tumultuous time when several board members, physicians and then-Gov. Martin O’Malley clashed over how the system was run. Chrencik was chosen to lead the system temporarily and eventually won backing to hold the position permanently.
In his leadership roles, he oversaw the addition of hospitals on the Eastern Shore, the Washington suburbs and the northern reaches of the state as well as in the Baltimore region. The acquisitions sometimes rankled local politicians and health care consumers as UMMS officials consolidated and moved programs and services in a bid for efficiency. He also helped usher the hospitals into strict new budgets as part of a federally backed effort to contain health care costs across the state.
The system now has more hospitals in Maryland than any other health care system, with $4.4 billion in revenue and more than 28,000 employees, making it one of the state’s largest employers.
Chrencik praised the 1984 privatization of the hospital system in recent testimony in Annapolis.
“Prior to 1984, the University of Maryland Hospital struggled mightily,” he said. The state-owned hospital “was poorly governed, had obsolete facilities and really was non-competitive in the market and was constantly down here looking for state support.”
Chrencik said becoming a private nonprofit enterprise really “changed the future of the organization”
“We didn’t have state procurement issues to deal with so we could deal very rapidly on that front,” he testified. “There’s been a lot of success.”
Chrencik also presided over a series of crises at individual medical centers. Since the start of 2018, hospitals have been engulfed in controversies from a patient-dumping accusation and sexual harassment to a shooting outside the Shock Trauma emergency room at the system’s flagship University of Maryland Medical Center. Some incidents prompted reviews by regulators and led to policy and leadership changes.
But Chrencik also celebrated achievements during his tenure, such as restoring financial health to St. Joseph Medical Center after UMMS acquired the hospital, which was suffering its own scandal tied to overuse of medical stents. And surgeons at the university medical center, a major transplant hospital, performed the most extensive face transplant of the time in 2012 on a Virginia man involved in a gun accident. More than 150 doctors, nurses and other system professionals had a direct hand in the man’s care. The system is known for cancer research and treatment, as well as trauma care and the transplants, among other specialties.
News of his resignation drew a mixed reaction in the community.
The Morning Sun
“He oversaw a period of remarkable and pivotal transition for the medical system,” Donald C. Fry, president of the Greater Baltimore Committee, said in a statement.
Margie Elsberg, a spokeswoman for “Save The Hospital,” a grassroots group that has been challenging UMMS management of the hospital in Chestertown, expressed surprise.
“Chrencik’s out? That’s incredible,” she said. “We hope it’s the first step towards making sure that there is no self-dealing on any of the UMMS boards throughout the state.”
Anna Palmisano, a founder of Marylanders for Patient Rights, who has been critical of patient treatment at the system’s hospitals, added, “My hope is that new leadership will foster a more patient-centric culture at UMMS.”
Until he was put on leave, Chrencik served as an ex-officio member of the UMMS board of directors and on the board of each system hospital.
Prior to joining the system, Chrencik was a senior manager in the health care consulting practice at KPMG and a supervisor in the accounting and audit practice at PriceWaterhouse Coopers. He holds a Bachelor of Science degree from Bucknell University and a master’s in business administration from Loyola University in Maryland.
Baltimore Sun reporter Doug Donovan contributed to this article.