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UMMS scandal: Medical system board chairman, two others resign as additional contract revealed

The chairman of the embattled University of Maryland Medical System board of directors announced his resignation Tuesday — along with two other board members — as an additional contract with one of the departing board members was revealed.

Board Chairman Stephen Burch, who attended a contentious meeting in March with Republican Gov. Larry Hogan and Democratic state Senate President Thomas V. Mike Miller over the board’s contracting practices, announced his resignation effective July 1.

Burch, who also served as a member of Democrat Catherine Pugh’s transition team when she became mayor of Baltimore, was joined in resigning from the UMMS board by Kevin O’Connor and Dr. Scott Rifkin.

O’Connor’s resignation is effective July 1, while Rifkin’s takes effect immediately.

The system said in a statement that Rifkin and the hospital network had an “active agreement” in which his company “provides software for a pilot program designed to reduce hospital readmissions.”

“Rifkin’s resignation advances the effort to prevent conflicts and increase transparency,” the statement said.

The medical system said Burch was stepping down to “open a seat for a new appointee” of Hogan. It did not give a reason for O’Connor’s departure.

“We thank Mr. Burch, Mr. O’Connor and Dr. Rifkin for their service and commitment to the health system,” said UMMS interim President and CEO John Ashworth. “They brought invaluable experience and perspective to the board in helping us shape the system for the future of health care.”

In March, The Baltimore Sun reported that the companies of nine board members — not including Burch, Rifkin or O’Connor — had contracts with the medical system. Three of those members, including Pugh, have resigned from the board, while four are on leaves of absence pending an internal review of board members’ contracts with the system. There are 19 other members of the volunteer board who remain in place.

Rifkin is the co-founder and CEO of Mid-Atlantic Health Care, once one of the region’s largest nursing home operators. A separate firm he spun out of that company called Real Time Medical Systems provides software to UMMS — at no charge, he said Tuesday.

Rifkin said Tuesday that he resigned from the board in light of concern among system officials that this arrangement still might run afoul of rules for board members that are part of the new state law.

“They’re pretty hypersensitive right now,” Rifkin said. “The new law is so broad, so you just have to be careful.”

Burch did not respond to requests for comment.

O’Connor said he resigned because the new law passed by the General Assembly said all board members must do so by the end of the year.

“My resignation was predicated on the legislation that passed this year,” he said. “I wanted to let the governor make a new appointment.”

Rifkin, a physician whose company now maintains just two nursing facilities in Pennsylvania, said Hogan appointed him about 18 months ago to the board. About nine months ago, Real Time Medical Systems entered into a one-year contract with UMMS to provide software to the hospital system, he said.

“The amount of the contract was zero” and there was no clause to convert it into a paying contract after the year ended, he said. He said he intended to extend the free contract after the first year, and that he never planned to make “a single penny” from the system.

“This is what you’re supposed to do on the board,” he said. “You’re supposed to use your expertise and anything you have of value to help the organization, and you are supposed to do it for free. And that’s what I did.”

Rifkin said he made sure UMMS officials were aware of his contract, although it wasn’t disclosed in the same way as other board members’ contracts because it did not have any cost to the system associated with it.

He said the Real Time Medical Systems software usually costs about $10,000 a month, but can result in savings of $350,000 a month for a hospital system, so he estimates he has saved UMMS about $4 million by providing it at no charge. He said he has about 750 clients for the software across the country.

According to Rifkin’s company, the software provides staff with “an intuitive, real-time dashboard that displays patient data” in order “to improve patient care and staff communication” at health care facilities. “When a patient has additional needs, the system immediately informs staff of the need for a care intervention — enabling them to proactively monitor, identify and treat the patient at the facility, while preventing hospital readmission.”

Hospitals increasingly have invested in reducing patient readmissions since the federal government and the state began assessing associated penalties following the passage of the federal Affordable Care Act.

Rifkin, a major donor to the University of Maryland School of Medicine, has practiced in Maryland for 20 years. In 2017, Rifkin gave $566,255 to the medical school. And in 2014, the medical school listed him as one of its top contributors for a $510,000 donation to its Department of Medicine.

He co-founded Mid-Atlantic Health Care in 2003, after buying a nursing facility on the Eastern Shore. Rifkin is also the publisher of JMORE, a Jewish lifestyle media company and publication in the Baltimore area.

He said he and many other board members were unaware of — and shocked by — Pugh’s deal to sell children’s books to the medical system and some of the other consulting contracts held by board members.

“Most of the board members knew nothing of the indiscretions that occurred, and are trying their best to serve the state of Maryland and serve the institution,” he said. “It’s really a wonderful place with wonderful physicians and wonderful care, and it’s really unfortunate that some people did things that they clearly shouldn’t have done.”

The resignations were the latest fallout after The Baltimore Sun’s reporting sparked an outcry over the board’s contracting practices, including the $500,000 deal to buy Pugh’s self-published “Healthy Holly” books.

Federal, state and local investigations are underway.

System President and CEO Robert Chrencik — who was paid $4.3 million in total compensation in 2017 — resigned last month. Pugh resigned last week from her office as mayor of Baltimore.

The General Assembly rushed to pass sweeping, emergency reform legislation to ban no-bid contracting by board members and mandate an audit. The law also requires the entire board to resign by the end of the year, and Hogan has said he wants to “clean house” and may not reappoint any of the current members to the 23 seats he will fill on a new 25-member board.

Burch has been a senior executive at Protégé Executive Coaching & Consulting, which “provides leadership and career development advice to executives and companies seeking long-term success,” according to the company’s website. He was a longtime executive at Comcast Cable, leading the Atlantic division there, and is the former president and CEO of Virgin Media in the United Kingdom.

Then-Gov. Martin O’Malley, a Democrat, appointed Burch to the UMMS board in 2008. He became chairman soon afterward amid the last major shakeup of the board — which was also when Chrencik was named CEO.

Burch reported in his financial disclosure form for UMMS for 2017-18 that his son, Aaron Burch, is director of legal services for University of Maryland Health Care Advantage, a provider of Medicare insurance. The younger Burch's LinkedIn profile says he is director of business and legal services for the University of Maryland Medical System Health Plans.

After allegations of self-dealing on the board surfaced in March, Hogan and Miller summoned Burch and Chrencik to the closed-door meeting in which the elected officials repeatedly criticized the board’s actions.

O’Connor is a former firefighter and longtime federal and state union official and lobbyist, including for the International Association of Fire Fighters. He was an elected trustee from 1987 to 2000 of the Baltimore County Employees Retirement System, for which he served as chairman for six years, according to his website.

He founded a consulting firm, O’Connor Cares Solutions, in 2017 and is its CEO.

O’Malley appointed O’Connor to the UMMS board in 2007.

He previously served as a commissioner of the Maryland Economic Development Commission, and commissioner of the Maryland Fire, Rescue, Education and Training Commission.

Several board members said this week that a board meeting scheduled for Wednesday has been postponed without a clear explanation from the system.

Michael Schwartzberg, a UMMS spokesman, said the board’s next meeting will now be held “later this month,” but would not say when or provide an explanation for the postponement.

Baltimore Sun reporter Doug Donovan contributed to this article.

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