ST. CROIX — The territory’s hospital system has acknowledged delays in remitting employee payroll deductions and other statutory obligations, attributing the issue to cyberattacks, cash flow disruptions, and broader financial challenges while outlining corrective measures to address outstanding balances totaling nearly $20.4 million between both hospitals.
In a May 15 response to Senate Vice President Kenneth Gittens obtained by WTJX, Darlene Baptiste, chief executive officer of Governor Juan F. Luis Hospital and Schneider Regional Medical Center, said both institutions continue to record employee payroll deductions accurately but have struggled at times to remit those funds on schedule to retirement and third-party entities.
The response came after Gittens sent a letter on April 21 to Baptiste raising concerns over employee reports that deductions appeared on their earnings statements despite receiving agencies indicating payments had not been made by the employer. Gittens specifically highlighted discrepancies regarding funds withheld but not forwarded to the Government Employees’ Retirement System.
Baptiste said the delays stemmed largely from financial strain tied to cyberattacks that disrupted revenue collection and operations. She said an April 2025 cyberattack at JFL significantly affected claims processing, billing, collections and cash flow, creating constraints that impacted payroll-related obligations.
“While employee deductions continue to be accurately recorded within the payroll system, limited cash flow has at times prevented timely remittance of all obligations to GERS and other third-party entities,” Baptiste wrote.
Baptiste indicated that a review of employee contributions to GERS from October 2025 to the present found approximately $5.31 million in contributions pending remittance. She noted that discussions with GERS began last October to establish a structured payment plan and that retirements would be prioritized to avoid delays in employees being placed on the retirement payroll.
GERS Administrator Angel Dawson Jr. told WTJX, “We do have outstanding employee and employer contributions that are owed to the GERS.”
Dawson indicated that there is a penalty assessed for missing contributions.
“If they, in fact, withheld employee contributions that have not been remitted, they’re responsible for remitting those as well, and this is in addition to a 6% lost-income opportunity cost that we impose, as well as a 1.5% penalty,” he said.
Dawson did not characterize the agreement with JFL as a “payment plan” as Baptiste described it. He clarified a payment plan would identify a specific amount to be paid over a specific period of time.
“The practice that we have in place for Juan Luis, and frankly other employers that are behind, is that if they have an employee who is pending retirement, and if they’re missing employer contributions, those employer contributions must be remitted before that individual employee is placed on our retirement payroll,” Dawson said.
Gittens noted missing employer contributions has had tangible consequences, with some employees reportedly being denied personal loans through GERS as a result. Dawson said missing employer contributions would impact the ability for employees to obtain the loans. He said GERS has not received contribution payments from JFL since July 28, 2025, for the pay period ending May 15, 2025, and that the delinquency affects employees’ ability to secure new loans or refinance existing ones. He said GERS requires timely remittance of employer and employee contributions, as well as loan repayments withheld from workers’ paychecks, and cannot continue issuing loans if repayments are not being received.
The response to Gittens from Baptiste also disclosed additional balances owed to third-party entities, including withholding obligations to unions, agencies, and organizations such as the Internal Revenue Bureau and employee benefit providers.
According to the letter, JFL’s total third-party obligations amount to approximately $11 million, bringing total withholding obligations — including GERS — to roughly $19.5 million. The balances JFL owes include about $5.5 million to the Internal Revenue Service, $5.1 million to the local IRB, $188,000 to AFLAC, and $44,000 to both the Virgin Islands State Nurses Association and MASA. Smaller outstanding amounts are owed to various labor unions, including the Seafarers International Union ($24,000), United Steelworkers ($17,000), Registered Nurses Leadership Union ($10,880), and the Association of Hospital Employed Physicians ($4,680).
Baptiste said available cash has been directed primarily toward maintaining employee take-home pay and sustaining operations. To address the outstanding balances, she said JFL is pursuing payment plans, prioritizing older obligations, and evaluating the possible suspension of certain third-party payroll deductions so employees could remit payments directly to those entities.
The joint hospital CEO also said operational recovery efforts are underway. She noted a partnership with FirstSource that began February 1 to strengthen revenue cycle performance and collections, stating that improvements in liquidity are expected over the coming months.
At Schneider Regional Medical Center, Baptiste reported significantly lower outstanding balances.
According to her response, SRMC has remitted nearly $2 million in employee GERS contributions since October 2025 and has approximately $246,487 pending remittance, representing two recent payroll periods.
Baptiste said those balances are expected to be resolved within a 30-day corrective period and attributed delays primarily to timing issues tied to government allotment funding. SRMC’s IRB balance totals $597,532.89, including three pending payments under active resolution.
The $19,543,599.88 JFL owes combined with the $844,020.13 SRMC owes brings the total disclosed outstanding obligations for both hospitals to $20,387,620.01.
Baptiste, in her letter, stated that both SRMC and JFL remain committed to resolving all outstanding obligations, strengthening financial oversight and internal controls, and ensuring payroll deductions and remittances are managed with integrity, accuracy, and timeliness moving forward.
“However, it is important to note that, while timelines have been provided, the reconciliation of outstanding obligations and sustained compliance moving forward remain dependent on cash flow availability and operational funding levels,” Baptiste wrote.
The response follows renewed scrutiny from Gittens, who recently proposed Bill Request No. 26-1099 to establish a 90-day hospital amnesty program intended to improve revenue recovery and strengthen the financial stability of the territory’s health-care system.
Gittens said he intends to continue aggressively monitoring the hospital system’s reconciliation process until all outstanding employee discrepancies are fully resolved.
