Company tied to Gov. Scott got Broward Health contract, gave $400K to his campaign

By Dan Christensen and Buddy Nevins, FloridaBulldog.org 

Gov. Rick Scott speaks about cancer research funding at 21st Century Oncology, April 10, 2014
Photo: Dania Maxwell/Political Fix Florida, the joint bureau of Naples Daily News / Tampa Tribune / Treasure Coast in Tallahassee.

A cancer treatment company financially tied to Gov. Rick Scott that got a no-bid, 25-year contract from Broward Health in January 2012 later contributed nearly $400,000 to the governor’s re-election campaign, state records show.

21^st Century Oncology’s political generosity went deeper. Since Republican Scott was first elected in November 2010, the Fort Myers-based company has contributed another $340,000 to the Republican Party of Florida.

FloridaBulldog.org this week reported on Gov. Scott’s indirect ownership interest in 21^st Century Oncology via his $210,000 investment in the company’s owner, the private equity firm Vestar Capital Partners. The story also reported that attorneys for Broward Health, a tax-supported public hospital system, had denied a public records request for a copy of the contract.

Hours after the story was published, however, the hospital district’s lawyers at the Foley Lardner law firm changed their minds and released a copy of the 42-page contract, exhibits and amendments.

The contract spells out the terms of an exclusive and lengthy arrangement in which Broward Health gave 21^st Century Oncology LLC exclusive rights to supply radiation oncology services to Broward Health’s patients – and collect all the revenue those patients generate.

21st Century paid zero for access to patients

21^st Century paid Broward Health nothing to obtain that access. Likewise, Broward Health did not pay 21^st Century to assume a practice area that then-Broward Health president and chief executive Frank Nask told the district’s board of commissioners in 2012 was losing $3.5 million a year.

Broward Health Acting President/CEO Kevin Fusco isn’t talking

Why would 21^st Century want to take over a money-losing operation? How might it turn it into a profit maker? Kevin Fusco, who holds Nask’s job today, was asked by email to discuss the oncology radiation program’s performance under 21^st Century. He did not respond.

The contract, however, says the parties executed a separate agreement that requires 21^st Century to pay Broward Health unspecified fees for the right to use its space and equipment, such as CT scanners, located at Broward Health Medical Center in Fort Lauderdale and Broward Health North in Pompano Beach. That agreement is a public record, and a copy has been requested by FloridaBulldog.org.

At the same time, the contract also specifically allows 21^st Century to continue to operate radiation oncology facilities in Deerfield Beach, Plantation, Tamarac, Pembroke Pines, Coral Springs and Aventura “without being in violation of this agreement.”

The contract is for 10 years and automatically renews for three consecutive five-year periods unless 21^st Century wants out earlier.

Broward Health also pays 21^st Century a yearly fee of $120,000 to provide a medical director for the oncology program. The director sets physician schedules and monitors performance, and is paid based on 8 to 12 hours of work a week.

More significantly, the contract requires Broward Health to pay 21^st Century Oncology to treat poor patients who don’t have the money for treatment. Money that comes from taxpayers.

Broward Health’s payments for indigent patients under the original contract were broken into three categories of rates: $21,000 for high level services (prostate, lung, head and neck); $14,000 for intermediate level services (breast, gastrointestinal [esophagus, pancreas, anal canal], brain; $8,000 for low level services (lymphoma, skin, palliative cases).

About a year later, the contract was amended to delete any reference to indigent patient fees. Broward Health’s payment schedule for indigent services was changed to now pay the radiation company 65 percent of the Medicare Part B allowable. No explanation for the change, or its cost to the public health system, was given.

One knowledgeable source, however, said it is his understanding that 21^st Century Oncology’s contract with Broward Health is worth $20-30 million a year to the company, “multiplied by 25” years.

A reliable contributor to Scott

Throughout all this time, 21^st Century was a reliable contributor to Gov. Scott, who appoints Broward Health’s governing Board of Commissioners.

21^st Century Oncology has donated to Florida’s Republican Party since the late 1990s.

Its contributions increased noticeably, however, during Scott’s first campaign in 2010, including a $20,000 contribution by 21^st Century CEO Dr. Daniel Dosoretz days before the vote.

The bulk of 21^st Century’s political contributions have been to Gov. Scott’s Let’s Get to Work committee, which can accept unlimited donations. More than $360,000 over a half-dozen large donations were made to the committee between May 2012 and January 2014 when Scott faced a tough re-election challenge from former Gov. Charlie Crist. 21^st Century Oncology gave an additional $30,000 last March to Let’s Get to Work after the governor won re-election.

Scott’s own campaign organization, which is limited under the law as to how much it can accept from each donor, also got money from 21^st Century. Four corporations owned by the company gave the maximum $3,000 contribution each on Jan. 31, 2014. One of those corporations was 21^st Century Oncology LLC, the entity that entered into the deal with Broward Health.

The firm’s giving also extended to the governor’s first inauguration. In 2011, 21^st Century Oncology gave $25,000 to the governor’s inaugural committee.

Jackie Schutz, a spokesman for the governor, said this week that Gov. Scott wasn’t aware that 21^st Century had sought the Broward Health contract prior to its award in 2012. She also said the governor keeps his assets in a blind trust and doesn’t know about or control what he owns.

“The governor and his staff have had no conversation or contact about Vestar or 21^st Century Oncology with the North Broward Hospital District,” Schutz said.