As the Senate prepares to convene a special session Monday on the financial crisis facing the territory’s hospitals, the executive committee of the Virgin Islands Government Hospital and Health Facilities Corp. met Sunday to formalize its response — crafting a detailed letter to Senate President Milton Potter and outlining immediate steps needed to stabilize operations.
According to territorial board Chair Jerry Smith, Delegate to Congress Stacey Plaskett also joined Sunday’s meeting, offering federal support and pledging to advocate for the administration and hospital staff as they navigate a path forward. The executive committee, meanwhile, authorized Smith to draft the communication to the Legislature, which he said he hopes will be read into the record during Monday’s session.
Smith expressed regret that the hospital board was not invited to testify but said the letter offers a clear and comprehensive look at both the roots of the crisis and the reforms already underway.
Monday’s special session comes after months of escalating concern over severe staffing shortages, delayed vendor payments, and deteriorating conditions at both the Schneider Regional Medical Center on St. Thomas and Gov. Juan F. Luis Hospital on St. Croix. In recent public meetings and interviews, physicians warned that the system is on the brink of collapse, with some doctors resigning over unsafe conditions and the lack of timely intervention.
In the draft letter, the board outlines a series of priorities grouped into immediate, midterm, and long-term needs. At the top of the list: short-term stabilization funding to cover critical vendor debt, which now totals approximately $80 million across the two hospitals. “This debt reflects a long history of fiscal imbalance that can no longer be managed with temporary or incremental measures,” the letter reads, urging lawmakers to establish a reliable revenue source to support a bond issuance that would repay vendors and restore financial credibility.
The board also points to deeper structural challenges, including outdated technology, inefficient administrative practices, and inflexible Medicaid funding rules. “This practice not only limits transparency but also places an unfair financial burden on the hospital system,” the letter says of the current model, where the local Medicaid match is bundled into the hospitals’ operating allotment without being paid directly.
The letter goes on to detail several key initiatives already underway, including a strategic restructuring effort led by Ernst & Young consultants, a search for a centralized chief financial officer and chief technology officer, and a Request for Proposals process for a new revenue cycle management partner expected to be selected at the board’s April 23 meeting. Plans to transition to a cloud-based electronic health records system — MEDITECH as a Service — are also highlighted as part of a broader push toward modernization and efficiency.
In a significant workforce-related move, the board is also seeking to revisit a long-expired collective bargaining agreement with the Association of Hospital Employed Physicians and introduce a modern compensation model. Officials say similar renegotiations with nurse unions in recent years helped reduce reliance on costly contract labor and stabilized staffing. Updating the physician agreement is seen as a necessary next step to improve continuity of care and allow the hospitals to directly bill for professional services.
Other policy recommendations include expanding autonomy for certified registered nurse anesthetists to increase surgical capacity, decoupling the Medicaid match from hospital allotments to improve transparency, and authorizing flexible retirement options to enhance recruitment and retention. The board also calls for legislation to address the issue of “boarders” — patients who are elderly or incapacitated and abandoned in hospitals due to the lack of long-term care facilities or family support.
“While short-term support is deeply appreciated and urgently needed,” the letter states, “we respectfully emphasize that only sustained reform — across funding mechanisms, workforce policies, and structural operations — will lead to the stability and future viability of the Territory’s hospital system.”
Sunday’s meeting also included a decision to move the board’s annual strategic planning retreat from August to June, in light of the urgency surrounding the hospitals’ future. The session, Smith said, will focus on finalizing systemwide reforms and mapping out implementation timelines.
