According to a June 12, 2019 report prepared for University of Maryland Medical System by Nygren Consulting, LLC, senior leaders made deals with board members that weren’t always competitively bid or declared necessary by the full board. Among these agreements included a consulting arrangement with the audit and compliance committee chairman that included a $15,000/month retainer and the process used to execute the agreement did not comply with the organization’s procurement policies. In another case, the former CEO facilitated the UMMS purchase of then-Baltimore Mayor Catherine Pugh’s self-published book series, Health Holly. That arrangement, worth approximately a half million dollars, is being investigated by the U.S. Attorney’s Office for the District of Maryland.
Internal organizational dynamics, including the division of compliance versus legal department span of control and the length of tenure of the CCO can contribute to gaps in monitoring activities and educating board members. Engaging an impartial, outside entity to conduct a compliance program effectiveness review is one method healthcare organizations can use to detect the types of inappropriate senior leader/board member arrangements and board COI policy inconsistencies identified as root causes in the UMMS case.