Pacific Cancer Institute will remain open despite lease disagreement

VIEWPOINT

On Dec. 12, 2017, the Hawaii Health Systems Corp. filed a lawsuit against the Pacific Cancer Institute asking the court to declare PCI's ground lease invalid. The nature of the dispute is fairly confusing, so as the institute's medical director, let me explain.

HHSC and PCI jointly own the cancer center building. However, HHSC solely owns the land on which the building sits. PCI leases the land from HHSC and both parties share space in the building. The lease does not expire for decades. In 2015, HHSC raised concerns with PCI that certain utilities and other shared services had not been fairly included in the monthly rent paid by PCI. The parties got together and worked it out, agreeing to a settlement in 2016 that paid HHSC for PCI's past use of shared services, using a methodology agreed to by both parties.

After the 2016 settlement, HHSC asked PCI to consider redrafting the lease to further clarify the obligations of the parties. Using the existing lease and the 2016 settlement agreement methodology as a starting point, PCI agreed to HHSC's request. However, the negotiations broke down when HHSC demanded new terms that were not in PCI's existing lease and would have made it significantly easier for HHSC to evict PCI in the future.

In its lawsuit, HHSC argues the lease should be invalidated because the rent payments are not sufficient to cover the fair market value of the services we receive. We at PCI disagree. We believe our current lease, along with the methodology for payment of utilities and services established by the 2016 settlement agreement, is legally binding. Nonetheless, we will make higher payments to HHSC if a court or governmental agency with the proper authority determines we need to do so. However, we do not believe that HHSC should have the right to force new terms into the lease.

If the story ended as a landlord-tenant legal dispute, I would likely not be writing this commentary. However, on the same day HHSC filed the lawsuit, it also published two grossly misleading press releases designed to scare Maui patients and physicians, and pressure PCI into accepting the new and unfair lease terms.

In these documents, HHSC claims that "a new compliant lease must be executed or PCI must cease operations by Jan. 31, 2018," and "the Office of the Inspector General -- the federal agency responsible for oversight of [the relevant federal] laws -- informed HHSC that it must execute a compliant lease or require PCI to cease operations . . . by Jan. 31, 2018."

On Dec. 13, one day after the lawsuit was filed, news outlets published the story and listed the Jan. 31 deadline, ostensibly set by federal regulators, as fact. My cancer patients were devastated. On Dec. 14 and 15, I spent much of my day quieting patients' fears and fielding phone calls from family members who were concerned about their loved ones' ability to continue lifesaving cancer care.

Thankfully, I was able to reassure every patient, family member and physician on Maui that PCI would not be shutting down -- not on Feb. 1 or any point in the future.

It is our belief at PCI that HHSC has been dishonest with the public about the Jan. 31 deadline. Specifically, we do not believe the OIG, or any other governmental agency, has determined there is anything illegal about the lease. Rather, we think the OIG may have told HHSC that if HHSC believes the lease is illegal, then it should extricate itself from the agreement before a certain date. This, of course, is much different than the OIG telling HHSC that OIG thinks the lease is illegal or that PCI must cease operations by a certain date. Unfortunately, despite our requests, HHSC has refused to share any communications from the OIG, and the purported deadline isn't referenced anywhere in HHSC's legal filings.

While I am deeply disturbed by the press releases, Dr. Linda Rosen, the CEO of HHSC, has assured me that HHSC will continue to negotiate with PCI in good faith. We at PCI pledge to do the same. We are all praying for a speedy resolution.

* Dr. Benjamin Falit is a board-certified radiation oncologist and the medical director at the Pacific Cancer Institute.