Cooper Hospital paid a total of $8.2 million in 1993-1996 to private businesses in which two of its board members had a financial interest. The contracts were approved by a 27-member board, 17 of whose members or their businesses or relatives were listed by the hospital as having business affiliations with Cooper in 1996.
According to Cooper Hospital’s income-tax returns – which are public record because of the hospital’s nonprofit status – the firms of the chairman of the board of trustees and the former chairman of the hospital’s foundation board have been among the highest-paid professional contractors doing business with the hospital. Both board members’ law firms had business relationships with the hospital decades before the two men went on the board.
Cooper board chairman Peter Driscoll is a senior partner in the Haddonfield law firm of Archer & Greiner. The hospital’s tax records show that Cooper paid Archer & Greiner a total of $2.1 million in legal fees for 1993, 1995 and 1996. Archer & Greiner’s fees for 1994 were not available.
Driscoll declined requests for an interview. Peggy Leone, a hospital spokeswoman, said Driscoll recuses himself on issues involving his firm.
Cooper board member George Weinroth – who also chaired Cooper’s foundation board, its fund-raising arm – had a major interest in two businesses that were paid $6.1 million by the hospital from 1993 through 1996 for collecting money to pay for medical services. Also, Weinroth’s wife is employed as a billing specialist in the hospital’s department of pediatrics. Her salary was unavailable.
Cooper officials and Weinroth have said in interviews that the contracts were proper. Weinroth said his businesses did the work for which they were paid. He said he always recuses himself “even from any conversations” regarding his businesses.
The Camden hospital, which is formally known as Cooper Hospital- University Medical Center, paid various board members or their businesses for legal work, bill collections, banking, architectural and other services. Some board members work in salaried positions at the hospital; others have relatives employed by the institution, according to the tax returns.
It is not uncommon or illegal for board members at teaching hospitals to do business with their own hospitals, or their relatives or companies to do so.
The Cooper board met on June 2 and discussed the financial ties of board members to the hospital. In interviews, two current and two former board members said they were troubled by the issues raised in the board’s dealings.
Hospital officials said the board members’ businesses provided services needed by the hospital and the charges were fair.
The Internal Revenue Service requires that a nonprofit hospital disclose in its tax returns each year the names of board members who have business affiliations with the hospital. Before 1994, Cooper did not make such disclosures in its tax returns. Kevin Halpern, president and CEO of Cooper Hospital, has said the information had been left off in error, and he blamed the hospital’s former accountants for the mistake. Since 1994, the hospital has provided the information to the IRS.
Cooper officials also supplied lists concerning board members’ business affiliations for 1993 and 1996 to The Inquirer, although Cooper’s 1996 tax returns have not yet been filed.
Hospital officials have not provided a total dollar figure for the amount of money paid to the businesses of its board members or their relatives. Under law, the hospital need only reveal how much was paid to its five highest-paid contractors for professional services. The Archer & Greiner law firm was put in that category in 1993 and 1995. Weinroth’s law firm – Greenberg, Schmerelson & Weinroth – was among the top five for all three years. Another company in which Weinroth was a part-owner and CEO, C-Care, was listed in 1994 and 1995.
In an interview, hospital board member Weinroth described his contract work with Cooper.
“I am an entrepreneur,” he said, describing how he formed C-Care. He said that in the early 1990s New Jersey was revising its reporting requirements for hospitals providing charity care to the working poor. Under New Jersey’s charity care laws, people otherwise ineligible for Medicaid could receive some medical benefits from the state if they met certain criteria. Weinroth, with seven others, saw an opportunity for a new business, he said.
C-Care, located in the 500 block of Cooper Street in Camden, was designed to identify those patients and fill out the paperwork necessary to obtain state reimbursement to the hospital for their care. Weinroth said C-Care was paid between 3.5 and 8.5 percent of what it collected for Cooper.
According to hospital records, Cooper Hospital paid C-Care $1,170,703 in 1994; $531,858 for 1995; $456,080 for 1996.
C-Care has employed as many 16 people, Weinroth said, most of them retired police officers.
He said he believed the C-Care contracts with the hospital were not put out for public bid. Few companies do the type of work that C-Care does, he said, and his firm received the contract after presenting a proposal to the hospital. He said he began C-Care with five clients other than Cooper.
Weinroth said he sold C-Care last year. He still works for the company under an employment contract.
Weinroth also said his law firm collects unpaid hospital bills.
In 1993, Cooper Hospital paid the firm $1,175,355 for billing collection services; in 1994, $1,600,135; in 1995, $628,757; and in 1996, $591,500. Weinroth’s law firm began providing services for the hospital in the mid-1970s. Weinroth joined the hospital foundation board in 1992, and joined the board of trustees in 1995.
Cooper president Halpern has said Cooper contracts out bill collection work so that it can compare the success rate of different services.
According to the income-tax reports, Archer & Greiner, the law firm in which board chairman Driscoll is a partner, received these fees from Cooper Hospital: $584,395 in 1993; $803,071 in 1995; and $742,015 in 1996. According to the income tax reports and information supplied by the hospital, “members of the law firm, other than Mr. Driscoll, provide legal services to Cooper Hospital.”
According to Cooper Hospital officials, Archer & Greiner has been doing the hospital’s legal work for more than 40 years. Driscoll has been chairman of the hospital board since 1986.
Cooper’s records show that Cooper president Halpern serves on the board of directors for CoreStates/NJ National Bank. The records also show that Thomas Bracken, a market president of CoreStates/NJ National Bank, is a board member at Cooper Hospital. CoreStates/NJ National Bank provided banking services for Cooper in 1993, 1994, 1995 and 1996.
Halpern was paid $417,718 in 1995 as a salary from Cooper, and is currently paid a fee of $15,000 a year and $500 per meeting by CoreStates to serve on CoreStates board, according to a spokeswoman for the bank. Halpern declined requests for an interview.
In an interview, Bracken said CoreStates had served Cooper since well before he became a board member. In addition, he said, he recuses himself from any board discussions of banking business at both the hospital and at the bank.
George E. Norcross 3d, former chairman of the Camden County Democratic Party and chief executive officer of Keystone National Insurance Co. Inc., serves on the Cooper Hospital board of directors. In 1993, 1994 and 1995, his business was paid by Cooper for providing insurance-brokerage services to the hospital during those three years. In an interview, Norcross said he received only a “minimal” amount of money. He would not say how much he earned in commissions or fees from the hospital. Norcross, who is still a board member, did no business with the hospital in 1996.
Of the 27 Cooper board members in 1996, 17 were listed by Cooper as having business affiliations with the hospital or relatives or businesses that do. In addition to Driscoll, Weinroth, Halpern and Bracken, the hospital also lists:
* Joseph Tarquini of Tarquini Associates, an architectural firm that provided architectural services to Cooper for the years 1993, 1994, 1995 and 1996, according to the forms. Tarquini did not return several calls requesting an interview.
* Edward D. Viner, a full-time physician at Cooper. His daughter also is an employee, according to the tax returns. In a statement released through his office, Viner said his daughter works part-time doing secretarial work for Cooper.
* Michael Cresci, a trustee of H.A. DeHart, a trucking company in Thorofare that provided services to Cooper. Cresci did not respond to requests for an interview.
* Jeannine LaRue, whose niece is employed in Cooper’s Human Resources Department. LaRue said in an interview that her niece works at the hospital part-time.
* Mark Pello, medical staff president at Cooper. His wife is a part-time employee in the department of surgery. In an interview, Pello said the information supplied by Cooper was correct, and he declined to comment further.
* Barbara Schraeder, whose husband is a full-time employee of Cooper. Schraeder’s term on the board expired in March 1996. In a statement, she said the information supplied by Cooper was correct, and she declined further comment.
* Patrick Abiuso, a full-time physician at Cooper. His wife is a part-time employee in the Department of Medicine. In an interview, Abiuso said that the medical staff of the hospital voted him as the medical representative to serve on the board in 1993, when he was in private practice. After that, he said, he and his wife were hired as employees.
* Miller Biddle, a full-time physician at Cooper. His term expired in March 1996. His wife is the hospital’s assistant vice president of marketing. The Biddles did not return phone calls requesting interviews.
* Dr. Steven Levine, a former partner in a company that owned an office building that Cooper Hospital purchased. In an interview, Levine said he also receives a salary for performing part-time medical services for the hospital. His term on the board expired in September 1996.
* Carolyn Brann, president of the Women’s Board, which runs three small retail businesses whose funds go to Cooper. Brann’s husband is an employee of Johnson & Johnson, which sells pharmaceuticals and medical products to Cooper. In an interview, Brann said that neither she nor her husband had made any money as a result of her role on the board. She said she worked for the hospital as a volunteer.
* Joan Davis, chairperson of CamCare, an entity related to Cooper Hospital that provides health services to Camden residents, with fees on a sliding-scale basis. She did not return phone requests for an interview.
* Dr. Harold Paz, dean of the University of Medicine and Dentistry of New Jersey/Robert Wood Johnson Medical School which has an institutional affiliation with Cooper.
* Gary Lamson, vice president of mental health services of the University of Medicine and Dentistry of New Jersey, and acting president and CEO of University Healthcare Corp.
In a statement released by the University of Medicine and Dentistry of New Jersey, Stuart Goldstein said that Cooper Hospital bylaws require that two board members come from UMDNJ. Paz and Lamson are those designees, the statement said. They are not paid for serving on the board.