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Federal Monitor May Oversee State's Medical University

Posted on: Wednesday, 28 December 2005, 18:00 CST

By The Record, Hackensack, N.J.

Dec. 28--Trustees for the state's medical university will be asked at a special meeting Thursday to approve a partial federal takeover of the beleaguered institution.

The meeting at the Newark campus of the University of Medicine and Dentistry of New Jersey will be followed by another briefing for about 100 senior staff members detailing the new working arrangement, which will strip university executives of much of their control over its finances.

UMDNJ has an annual operating budget of $1.6 billion, the bulk of which is federal and state money.

The pact calls for a federal monitor to oversee financial operations at the sprawling public agency, which runs a hospital in Newark, medical and dental schools, clinics and affiliated health-care groups statewide. The monitor, former U.S. Attorney Herbert J. Stern, is expected to be in place by Jan. 11.

Stern would be given powers that would supersede those of the staff and board, a source familiar with the agreement said.

"As long as it's a reasonable agreement, the board will go along with it," said John Hoffman, a trustee and chairman of the board's finance committee.

The board has little choice. At a meeting last week, U.S. Attorney Christopher J. Christie threatened to indict the institution if the monitor was not put in place quickly, sources said.

Federal investigators have been probing the possibility of health-care fraud involving Medicaid and Medicare at UMDNJ's University Hospital that spanned as much as five years before it was stopped in 2004. A former vice president at the hospital estimated that the problem -- which involved double billing -- may have cost taxpayers as much as $40 million.

Acting Governor Codey is expected to attend Thursday's meeting, capping a tumultuous year in which the state's medical university has been the subject of both state and federal probes.

In the past two weeks, three trustees and several senior staffers have resigned. The trustees left voluntarily and likely won't be replaced until Governor-elect Jon Corzine takes office next month. The staffers -- UMDNJ's legal chief and two compliance officers -- were forced to resign after Christie announced the federal intervention.

Officials are moving quickly to put the monitor in place so that the university, which is now hobbled by a lack of a functioning legal department, can move forward, sources said.

Christie is said to have been upset that certain staffers were not cooperative in the federal probe. There have been allegations that e-mail messages and paperwork have been hidden or destroyed during the past several months. There were at least two suspicious break-ins at an executive office at UMDNJ during that time period.

Anna Farneski, a spokeswoman for the university, said its leadership, specifically President John J. Petillo, is cooperating fully.

"Dr. Petillo, from the get-go, has said that the U.S. attorney's visit to our board was a blessing, and we're grateful for the opportunity to achieve what we all want, which is a university above reproach," Farneski said.

Petillo came on board as president in 2004 after a year as chairman of the Board of Trustees. He has not spoken publicly since Christie issued his ultimatum to the board last week. Farneski and others have noted that many of the problems at UMDNJ predate his tenure, and that he enacted a series of reforms this year to tighten fiscal controls at the university.

For now, it appears, Petillo's $600,000-a-year job is safe. But one state legislator has called for a clean sweep at the university, saying Petillo should be ousted.

"He has been there for 2 1/2 years," said state Sen. Loretta Weinberg, D-Teaneck. "He had time to take some serious action, and he apparently didn't. I think that he tried several Band-Aid approaches."

"He had a vested interest apparently in protecting the current administration," Weinberg added. "He always sounded to me like he was part of the problem."

However, Sen. Ron Rice, D-Newark, cautioned against a rush to judgment and called Petillo a reformer.

"Right now, I have confidence in the administration," Rice said. "It's important that we scrutinize the institution. But the new president should be given an opportunity, along with the board members, to move forward and put this all in perspective."

Farneski, the university spokeswoman, declined comment on Petillo.

Trustee Alex Menza, who twice has been a patient at UMDNJ this year, said it was unfortunate the scandal tended to eclipse the work of many of UMDNJ's health-care providers..

"This university has the potential to be great," said Menza. "There is a lot of unrecognized good work."

By Patricia Alex and Mitchel Maddux

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To see more of The Record, or to subscribe to the newspaper, go to http://www.NorthJersey.com.

Copyright (c) 2005, The Record, Hackensack, N.J.

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Source: The Record - Hackensack, New Jersey

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