MARTINSVILLE, Va. – The man behind the effort to open a medical school in Martinsville is now asking for help from the state Attorney General's Office.
Dr. Noel Boaz wants the office to investigate why the Tobacco Commission is asking him to pay back the $800,000 grant he was given to help open the school.
The Tobacco Commission says the decision was made after Boaz failed to meet certain benchmarks outlined in the grant agreement and because the school is now going to be nonprofit instead of for-profit.
"We're hopeful that a dispassionate look at the facts will allow a little more latitude to be given to the time for this because we have made a lot of progress," said Boaz.
As of Wednesday, he said the Attorney General's Office had not responded to his request.
As for not meeting the benchmarks, Boaz says the hold up has been finding a funding source that can provide the $25 million necessary for a school to have on hand in order to receive full accreditation and begin operating as a medical school.
Regarding the issue of the school now being a nonprofit organization instead of a for-profit one, Boaz says the Tobacco Commission's only restriction regarding nonprofits is that a grant cannot be given to an entity that is nonprofit by state law.
"We are nonprofit under a federal regulation of the IRS code, which is 501(c)3," said Boaz.
Tobacco Commission Executive Director Evan Feinman says it is "completely appropriate" for taxpayers to get their money back.
"The Henricopolis School had a contract with the Commission to produce a for-profit, taxpaying, medical school with over 100 employees. Three years later they've produced a nonprofit, non-taxpaying plan for a test prep academy with fewer than 10 employees. It is completely appropriate for the taxpayers to get their money back, and that's what the contract Dr. Boaz signed clearly states," Feinman said.
In a July 31 email sent to Boaz from Tobacco Commission deputy director Chris Piper in response to a July 14 letter Boaz sent the commission outlining three questions regarding the request to pay back the grant, Piper stated that Boaz would be given 30 days to work with the city of Martinsville to develop a payment plan for the city to pay back the money.
The city of Martinsville applied for and received the grant on behalf of Boaz, making the city responsible for paying back the money if Boaz cannot.
In his July 14 letter to the Tobacco Commission, Boaz stated that he does not have the money.
He said the majority of the money was spent to hire staff for the Integrated Center for Science and Medicine, a direct primary care clinic that was supposed to be income-generating and eventually incorporated into the medical school, but the ICSM proved to be unsuccessful.
The rest of the money was used for asbestos abatement in the building in which the medical school will be housed.
A direct primary care clinic charges people a flat fee, in the case of the ICSM a yearly fee, as the way of paying for the services the clinic provides.
"Eventually, our physicians wanted to depend upon insurance payments. Those insurance payments came in at levels that were significantly below what our costs were," Boaz said.
The ICSM also proved to be financially non-viable because, Boaz said, people didn't understand the concept.
"The membership component was...difficult," said Boaz. "Our patients believed in some ways that this was a free clinic, so we had a significant number of non-payers."
Boaz is confident that the medical school will become a reality, more time is simply needed to make that happen.
As for how the city of Martinsville plans to pay back the money, once Boaz's 30-day extension ends the Tobacco Commission will begin working with the city to develop a payment plan.
The city hopes to spread the payments out over five years, meaning the city would pay $160,000 each year.
The Tobacco Commission has, however, reduced the amount that will have to be paid back from $800,000 to $780,000, giving Boaz credit for hiring staff for the ICSM.
That means the city's payments will likely be less than $160,000 a year.
How paying back the grant will impact the city won't be known until a payment plan has been finalized and city officials begin to work on the budget for the next fiscal year.