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Audit issues, lack of due diligence cited in veto of Sage Hospital reauthorization

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WINDOW ROCK, Ariz. — Citing questionable spending practices, lack of due diligence, and other important concerns, Navajo Nation President Jonathan Nez and Vice President Myron Lizer vetoed Resolution CS-79-20 on Sept. 30, which sought the reauthorization of Navajo Health Foundation – Sage Memorial Hospital, Inc. to continue operating as a tribal organization for purposes of contracting under the Indian Self Determination Act for a 20-year period.

The legislation was introduced as an emergency bill on and approved by the 24th Navajo Nation Council without consideration and support from the appropriate Standing Committees with oversight authority.

“This is a 20-year contract extension for a health care facility that is currently under a financial audit due to allegations related to questionable spending, unaccounted funds, the diversion of federal funds for questionable purposes, and other issues stemming from the tenure of the previous CEO,” Nez stated. “This matter must be fully vetted because we are entrusting this entity with the health and well-being of our Navajo people.

“We respectfully request the members of the Navajo Nation Council to reconsider the reauthorization of this contract with the highest level of due diligence to ensure that Sage Memorial Hospital is in compliance and in a position to deliver quality health care for our Navajo citizens,” Nez said. “In the meantime, we have been reassured that Sage Memorial Hospital has sufficient funding to continue providing health care services.”

Although the legislation states that health and medical services provided by Sage Memorial Hospital would end Sept. 30 without the reauthorization in place, Nez pointed out that Sage Memorial Hospital was recently awarded a $200 million settlement from Indian Health Service and has access to other funding sources, such as third party billing and carryover funds, to continue providing health care.

“There was no time to talk to Indian Health Service representatives, who are a vital part of this issue, and critical recommendations from the Navajo Department of Health to address quality care were disregarded,” Nez said. “Had the sponsor taken the time to involve everyone, the Council members may have learned the situation is not as dire as presented.

“Sage Memorial Hospital would not ‘go out of business’ tomorrow or would not disappear forever,” he continued. ”Council members would have heard that the Indian Health Service would not begin contract negotiations immediately and Sage Memorial would still have access to federal funds when a contract is completed,”

During the Sept. 30 discussion, several Council members spoke in opposition to the legislation and questioned why the reauthorization was being rushed through the process without proper vetting and due diligence.

“Now more than ever, during this COVID-19 pandemic, we need all health care facilities to continue providing quality care and services for all Navajo people,” Lizer said. “The veto of this resolution should not discourage Sage Memorial Hospital officials.

“Instead, we seek a stronger partnership based on mutual respect for federal guidelines and the sovereignty of the Navajo Nation,” the vice president pointed out. “We look to the leadership of the 24th Navajo Nation Council to work with the Navajo Department of Health, Indian Health Service, and others to carefully vet the 20-year contract for the benefit of all Navajo people,” he concluded.

In 2005, the Navajo Nation Council adopted a resolution that delegates the reauthorization authority for tribal health organizations, to the Council’s current Naabik’iyati’ Committee with recommendation from the Health, Education, and Human Services Committee.

The Gallup Sun attempted to contact Sage Memorial Hospital CEO Christi Elmeligi for this story to learn more about the findings, the hospital’s response to the allegations and how this would impact health care for Sage hospital’s patients.

We received no response by press time.