ICS Leaves CNMI: Questions remain

May 7, 2012

Louis Kraml co-founder of ICS
and CEO of Bingham Memorial Hospital
ICS appears to have been a scam, a way for two opportunists (Louis Kraml and Dan Cochran) to get rich off of a fledging hospital. To many, it looked that way from the beginning. When requested to submit a plan to the Attorney General, ICS President Dan Cochran pulled a flow chart off the internet, and sent a start-up cost sheet marked "pending". Absolutely no substantial agreed upon deliverables were submitted.  Although Cochran claimed ICS already had a strategic plan for CHC, even that was not handed over.

Perhaps Cochran was really in the CNMI on a ten-day vacation with his wife and not to seriously pursue a contract with CHC. The documents he handed over suggested he was a fraud.

The ICS team was unprofessional from the start. Cochran responded flippantly and rudely to reporter's routine questions, missed meetings and sent garbage as a response for documentation. Kraml laughed at questions when interviewed on a news broadcast in Idaho. Hopefully, the people of Idaho are not also being scammed.

Attorney General Buckingham proved that he is capable of stopping a bad contract. Perhaps if no local connection is involved, if no Fitial pal is the beneficiary, the AG can actually perform to protect the CNMI's interests.

As for the physicians who threatened to leave the CNMI if the contract was not signed, that raises questions about their interests and integrity. Leave because you are not being compensated properly, because CHC is an unsafe hospital lacking supplies and equipment, or because you work at a mismanaged institution. But why threaten to leave because a questionable contract is not penned? I can understand that they want income for the CNMI, but at what costs? Even if it means establishing a deal with two slick get rich quick opportunists? Why not ask the legislature and governor why the CHC was not properly funded in the first place? Why not push to bid out the job with an established, reputable billing company?

It looks like the ball may be in the governor and legislature's court.

KSPN interviewed Juan Babauta and AG Buckingham concerning $37,000 that was already paid to ICS for travel and consulting expenses. Documents showed that CHC CEO Babuata signed off on the payments. On January 30, 2012 Babuata signed documents to pay ICS $8,000 before a contract was even signed. Babauta claims the money was for ICS to conduct an assessment of the broken billing system.

On February 25th Babuata signed documentation to release a check to ICS for over $19,645,47 for a February 2012 ICS trip. On February 25th Babauta also signed off on $10,000 for travel and bringing coders to the CNMI.  Babauta claims that the "start-up" costs will be repaid to CHC after the billing brings in money.

When interviewed AG Buckingham appeared very surprised by the amount paid to ICS and, in fact, asked the KSPN reporter for a copy of the documents. There is something unsettling about this contract and the players.

Other posts:
 ICS Signed Contract Before Company Legally Registered
CHC Needs to Move Forward Now


Anonymous said...

The medical billing and coding functions for CHC was actually put out for bid last year through an RFP. I don't know what the response was, however it was interesting that when Ester Muna left as CHC CFO, it was originally reported the was starting up a medical billing and coding consulting business. http://www.saipantribune.com/newsstory.aspx?cat=1&newsID=115433

Anonymous said...

Why is it that anyone who travels from the US to the CNMI is running a scam of some sort? He brought his wife, so what. ICS pulled out because drum roll..........THE CONTRACT WAS NOT SIGNED! Trust me this isn't like the multimillion dollar Federal GSA junkets to Vegas and Hawaii with wives, girlfriends, boyfriends, friends, pets, fruity drinks, room service, million dollar party, luxury cars and to top it all off the MORONS made a YouTube video about it! The stupidity of these Federal workers knows no bounds.

Wendy Doromal said...

4:47 What professional businessman goes to a distant location to negotiate a contract without having the basic written plan and related documentation concerning the agreement? It is highly suspect. I would not make a deal with an obvious opportunist who is so unprepared, so arrogant, so evasive.

Anonymous said...

All business people are opportunists. That's how companies make MONEY. Just because the Variety runs a story does not mean it's accurate or true. Far from it. 99% of the Doctors at CHC wanted this contract to go through for a reason. ICS has a lot experience. Having an off island medical billing company would be the best way to ensure fairness. Don't you think?

Anonymous said...

Corruption exploded under which CNMI Governor...you got it...


And he still wants to run for DC Rep but knows Kilili will smear him, so that makes him the logical buffoon to run the hospital.

Wendy Doromal said...

5:45 Of course all business people are opportunists, but not all of them claim that they are engaging in a contract to "Save a Hospital" as Kraml stated on the Idaho news show...

Anonymous said...

Bank of Saipan comes to mind after watching these guys in action. (although different)
Seems these people, the elected and appointed think they are so smart but in essence are really stupid and gullible.
As far as Babauta goes (along with some others)They may have gone a and got an education but really did not learn anything.
Maybe they are book smart but nothing else, no common sense along with experience as are many of the elected past and present that actually went to college.

Anonymous said...

As far as CEO, Babauta is actually an improvement over Villagomez. Babauta hired a management team and reportedly saved $500K vs. hiring professionals from the mainland. He also loses millions each month because of it.

One person is not going to solve the hospital woes. An experienced fiancial comptroller, COO, CFO, medical billing specialist, chargemaster for each department and a team of experienced coders are needed. CHC will need to update the salaries for these positions if it has any hopes of attracting a qualified candidate. The CFO of a hospital should not earn $49K per year.

Anonymous said...

You're so right.

Look at facts:
1.took $$ before had contract
2. had contract before registered as LLC
3. wisecrack comments to press
4. have fulltime jobs at hospital yet can run 21 suspicious LLCS
5. provided none of papers AG asked for
6. missed meeting with AG

This is a totally messed up deal and a very poorly managed company at best and one that should be investigated at worst. Why would CHC even get involved with people who are so unprofessional instead of tapping one of the hundreds of existing billing companies with great reputations? Babauta is crazy to think this would fly. The doctors are wrong to step in to defend a shady deal. This reflects on their own characters. Tsk, tsk and shame all around.