By Cynthia McCormick / Cape Cod Times From The Herald News

HYANNIS — A state nurses union is backing passage of a bill that would require Cape Cod Healthcare and other publicly funded hospitals to disclose money placed in offshore accounts.

In a press release Thursday afternoon, the Massachusetts Nurses Association also called for “excessive” profits and CEO pay to be returned to a Medicaid reimbursement account.

The union said Massachusetts hospitals had at least $1.6 billion stowed away in offshore tax havens in fiscal year 2017, including nearly $30 million placed in an account in the Cayman Islands by Cape Cod Healthcare, the parent company of Falmouth Hospital and Cape Cod Hospital in Hyannis.

“Taxpayers have a right to know how much of their money is sitting in an offshore bank account or going toward out-of-state expansion — especially if those taxpayers live in a community that has just lost an essential service,” Donna Kelly-Williams, the union’s president, said in the press release.

Patrick Kane, senior vice president for communications and business development at Cape Cod Healthcare, called the Hospital Profit Transparency and Fairness Act “old news.”

“The MNA is advocating something that will take resources away from patient care,” Kane said.

The union said the proposed legislation backed by state Sen. Michael Moore, D-Millbury, and state Rep. Josh Cutler, D-Duxbury, would require hospitals to disclose money held in offshore accounts among their financial holdings and profits.

The bill would also require hospitals receiving taxpayer dollars that have an operating margin above a specific cap or that pay their CEO more than 100 times the lowest-paid employee to contribute to a Medicaid Reimbursement Enhancement Fund.

The union said reimbursement for services at Cape Cod and Falmouth hospitals is overwhelmingly paid by taxpayers, with 71.8 percent coming from Medicaid, Medicare and state funds

The acute-care hospitals on the Cape had the highest percentage of public payers in the state after Southcoast Hospitals Group, Boston Medical Center and Trinity Health in Holyoke and Springfield, according to the union.

The union did not list CEO pay in the release, but Cape Cod Healthcare’s IRS 990 form for fiscal year 2017 said the organization’s president and CEO, Michael Lauf, earned just over $1.6 million in compensation that year.

“This bill is a shameful move by a defeated union that was rejected by the largest margin of defeat in recent Massachusetts history, 70 percent to 30 percent,” Kane said, referring to November’s nurse-patient staffing ratio ballot initiative.

The offshore accounts “were created so hospitals could self-insure their own physicians,” Kane said.

“It’s not a slush fund,” he added.

“They are not relevant,” Kane said of the union. “We love our nurses. This is about the union leadership.”

But Joe Markman, a spokesman for the union, said hospitals have other options for insuring themselves.

“They do not have to place the money offshore in the Cayman Islands or Bermuda,” he said. “States such as Vermont and Arizona also offer captive insurance options.”

Markman said when corporations like Cape Cod Healthcare place money in the Cayman Islands, it is much more difficult for the public to maintain oversight.

“It is largely tax dollars, and yet the public has no idea what is happening with its money after it reaches offshore accounts,” Markman said.

“This legislation is critical because it provides the public and patients receiving care at these hospitals a clear view of how executives are spending their money,” he continued.

Markman added that hospital executives should “preserve essential health care services” rather than keep funds offshore where they aren’t regulated.

The Massachusetts Health & Hospital Association said the self-insurance model helps hospitals manage the high costs of liability insurance for their employees and saves money otherwise spent on commercial insurance.

Many hospitals establish a separate entity in another country to help manage liability, a process that is legal, the association said in a press release.

“The entities’ activities are routinely reported to the IRS and included in the consolidated cost reports of the hospital or health system,” the association said.

Kane said the offshore accounting is transparent. But Kelly-Williams said it took digging through “opaque complex financial forms” to find that “every network in the state, including Baystate Health, Partners and Lahey have offshore accounts in tax havens like the Cayman Islands.”

The hospital financial transparency legislation was first introduced several years ago in the form of a ballot question. It was reintroduced as a bill in 2015 and 2017 before coming up again this year, Markman said.