Health Care

Things still aren’t going well for Missouri hospital skewered by an audit last year

Missouri Auditor Nicole Galloway’s office says Putnam County Memorial Hospital in Unionville, a town of less than 2,000 in north-central Missouri, is at the heart of a $90 million billing scheme.
Missouri Auditor Nicole Galloway’s office says Putnam County Memorial Hospital in Unionville, a town of less than 2,000 in north-central Missouri, is at the heart of a $90 million billing scheme.

Putnam County Memorial Hospital in Unionville, Mo., is showing signs of progress after a blistering audit last year prompted a Missouri attorney general investigation, but remains in poor financial condition, according to a new report.

Missouri Auditor Nicole Galloway on Wednesday released a follow-up audit to one her office issued last year that found the rural hospital was involved in $90 million in questionable billings. After that audit, U.S. Sen. Claire McCaskill, D-Missouri, called for a federal investigation.

Wednesday's audit report found the hospital's board has implemented some of the original audit's suggestions but finances remain so shaky that it can't pay to have an accounting firm work with the hospital.

Galloway's report said that the hospital in 2016 took, on average, more than a year to pay vendors and that the hospital's revenues for that year did not make up even half of what had been budgeted.

The good news from Galloway's report was that the hospital put an end to the sketchy billing practices that put Putnam County Memorial Hospital in the national spotlight and highlighted the difficulties rural hospitals face in the United States.

The original audit found that the hospital was billing insurance companies for lab services around the country. Last year, The Star reported how a Texas woman who had never visited Missouri nonetheless received a $700 bill from her insurance company for blood work done at Putnam County Memorial Hospital. The insurer, she said, had already paid $3,000.

Galloway's office said the questionable billings started not long after the Putnam County hospital contracted with Hospital Laboratory Partners LLC to operate clinical and operational aspects of the hospital.

The hospital's association with Hospital Laboratory Partners was questionable in several respects: Its chief executive David Byrnes approved his own salary, added 33 phlebotomists to the payroll and had an unusual clause in the contract that held the management company harmless from legal liability arising from work at the hospital.

The hospital fired Hospital Laboratory Partners in February, although a company called Empower HIS LLC kept receiving wire transfers for billing fees from the hospital until April. Empower HIS LLC is associated with Hospital Partners, Galloway's office said.

Joe Bednar, an attorney representing the hospital, said the audit follow up report reflected some of the progress the hospital has made.

"It reflects that the board is trying to get things organized and issues that were raised resolved and we're moving forward and looking for a new manager for the hospital and continue to make progress in that direction," Bednar said.

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