Amid growing scrutiny in early April around lucrative contracts between the University of Maryland Medical System and nine of its volunteer board members, officials privately cut back two undisclosed deals with a tenth, according to a new report.
Both involved Dr. Scott Rifkin, who resigned from the board in early May even though he said a deal to supply software to the hospital system paid his company nothing.
The system’s efforts to undo those deals, paired with new allegations that UMMS employees felt pressured to push Rifkin’s products on nursing homes, raise fresh questions about his relationship with UMMS — and how and whether he stood to benefit personally from it despite the volunteer nature of his board position.
The report released Wednesday by California-based Nygren Consulting, hired to review board contracts by UMMS, found that while Rifkin’s company provided proprietary software for reducing hospital readmissions to UMMS for free for one year, the contract indicated fees would kick in during subsequent years.
On April 3, well after The Baltimore Sun first reported his nine colleagues’ contracts, UMMS and Rifkin amended the deal to say UMMS had no obligation to pay those fees, the report said.
In a previously undisclosed deal, Rifkin was given leasing rights to a property adjacent to the system’s midtown campus in Baltimore in exchange for $1,000 and a promise to build a geriatric nursing facility that UMMS believed would benefit its patients, according to the report and additional interviews by The Sun.
That contract was terminated April 4, the report said.
When UMMS announced May 7 that Rifkin had resigned from the board, it said Rifkin’s Real Time Medical Systems company had provided software to UMMS “for a pilot program designed to reduce hospital readmissions.” UMMS said his resignation “advances the effort to prevent conflicts and increase transparency.”
Rifkin, also the co-founder and CEO of Mid-Atlantic Health Care, which was once one of the region’s largest nursing home operators, said at the time neither he nor Real Time Medical ever stood to gain from the software, and that he was resigning only because of tightened rules around board contracts in the wake of the scandal.
“The new law is so broad, so you just have to be careful,” he said then.
Neither party acknowledged the leasing deal for the geriatric facility until this week, in response to questions about it from The Sun.
As with the software deal, Rifkin said Wednesday that he did not stand to benefit from the leasing arrangement. He said he had pledged all profits from the planned facility to the University of Maryland School of Medicine, which is publicly owned but works in close partnership with UMMS — including for an endowed professorship in geriatric care.
“It was subject to fair market value, and board approval,” he said.
He also reiterated that he never intended to make money on the software deal.
“We were never going to charge UMMS for the software and we believe we made that very clear in the agreement,” he said.
Joanne Morrison, a spokeswoman for the medical school, said medical school officials “had conversations with Dr. Rifkin back in 2014 about a geriatric professorship,” but “no formal pledge has been made.”
Morrison also said the medical school “is not involved in facilities planning,” and directed all questions about the geriatric facility to UMMS.
UMMS has provided conflicting answers to questions about Rifkin’s deals.
When The Sun asked UMMS in late May whether it had an arrangement with Rifkin to open a nursing facility at or near the midtown campus, system spokesman Michael Schwartzberg replied: “Incorrect, there is no such project.” Asked whether there was ever such a project that had been canceled, Schwartzberg did not respond.
Asked again Wednesday about the deal, Schwartzberg acknowledged it for the first time — and said UMMS had supported it “because it provided a potential site for hospital inpatients being discharged from both UMMC campuses for long-term care” and because the “concept” was “consistent with Maryland’s Medicare waiver.”
According to the Nygren report, it does not appear “that a defined process was used to document that UMMS obtained a fair market value” for Rifkin’s services.
The report did find that some people at UMMS believe Rifkin’s software helps its hospitals reduce readmissions, as it is intended to do.
Beyond the deals, the Nygren report found that UMMS sent a letter to nursing facilities last summer “encouraging” them to subscribe to Rifkin’s software. It is not clear which entities received the letter, or whether any subsequently bought Rifkin’s software.
Asked in late May about a letter from UMMS sent to nursing facilities urging them to buy Rifkin’s software, Schwartzberg said the system couldn’t comment, “so as to not bias or disrupt the integrity of the Nygren review.” He did not respond to similar questions Wednesday.
UMMS declined to provide the letter.
The Nygren report also found that some employees at the University of Maryland Medical Center — UMMS’ flagship hospital downtown — said they felt “pressured” by Rifkin and UMMS chief performance improvement officer Keith Persinger to encourage outside nursing facilities to purchase access to Rifkin’s software if they wanted to “participate fully in the UMMC network for post-acute care.”
Persinger resigned from UMMS earlier this month.
Henry Fawell, a communications specialist hired by Rifkin to handle his public relations, said Rifkin was completely unaware of the letter that UMMS sent to nursing care facilities.
“Dr. Rifkin reviewed such a letter only after The Baltimore Sun made him aware of it,” Fawell said.
The Nygren report also found that some people at UMMS were concerned that Rifkin had “used the agreement with UMMS as an endorsement to advertise” his software to other potential clients.
Rifkin said he never pressured anyone at UMMS to push his products, and never asked for a letter to be sent to outside vendors.
“We explained to [UMMS] that the more nursing homes that used it, the better it worked. But that’s the extent to which I ever discussed the topic,” he said.
Fawell said the plans for the geriatric center preceded Rifkin’s being appointed to the UMMS board by Gov. Larry Hogan about 18 months ago, and were “well-known” to and “fully disclosed and discussed” by UMMS officials.
He said Rifkin’s company “has no plans to move forward” with the facility at the moment, but could “reassess” once UMMS has new leadership in place — referring to the fact that many top executives and board members have departed amid the scandal.
He said Rifkin planned to donate the facility to the School of Medicine once completed and profitable, adding to the $2.5 million in other philanthropic donations Rifkin has made to the school since 2014. Rifkin has received medical care at UMMS facilities.
Dr. Stacy Fisher, director of women’s and complex heart diseases at the medical school, who has treated Rifkin and received funding from him to provide for specialty fellowship training for congenital heart disease care, said she feels strongly that Rifkin is committed to the university system for the right reasons.
“He wanted to make sure something really good would come of it, and that it would inspire other people,” Fisher said of the money he has given the system. “That’s it.”
Rifkin said his philanthropic record shows he only wants what is best for the hospital system.
“I’m a thankful patient, I’ve pledged millions of dollars, and these were two projects that I truly felt were in the best interest of the institution and not for personal gain,” he said.