Government & Politics

Hospital company disputes Missouri audit that alleges $90 million billing scheme

A report released Wednesday by Missouri Auditor Nicole Galloway’s office found that Putnam County Memorial Hospital in north-central Missouri had accepted millions in questionable insurance payments for patients who were treated across the country.
A report released Wednesday by Missouri Auditor Nicole Galloway’s office found that Putnam County Memorial Hospital in north-central Missouri had accepted millions in questionable insurance payments for patients who were treated across the country.

A Florida company is pushing back on a report from Missouri Auditor Nicole Galloway’s office that says the company engaged in a $90 million billing scheme in the course of managing a small Missouri hospital.

The audit, released by Galloway’s office Wednesday, found that Putnam County Memorial Hospital in north-central Missouri had accepted millions in questionable insurance payments for patients who were treated across the country.

In September, the hospital hired David Byrns to serve as its CEO and hired his company, Hospital Partners, which is incorporated in Florida, to run the hospital’s daily operations.

The audit scrutinized $90 million in insurance payments that were passed on to a partner company, Hospital Lab Partners, for lab work for out-of-state patients who had never been treated at the hospital in Unionville, a town of about 1,600.

Hospital Partners put out a statement Thursday accusing Galloway’s office of mischaracterizing the payments and called the non-patient lab testing a critical source of revenue for the hospital. The statement contends that Putnam is authorized by law to bill for off-site lab work as a critical access hospital.

“The assignment of non-patient lab specimens has been standard practice for rural and critical access hospitals for many years,” Mark Thomas, an attorney for Hospital Partners, said in a statement.

“The purpose of the rural / critical access exceptions is to give rural healthcare facilities a fighting chance to survive and serve their local communities,” Thomas said.

The statement said that since the company took over daily operations of the hospital, more than $6 million has been paid to reduce the hospital’s outstanding debt and to fund critical programs.

Galloway said Wednesday that she was deeply disappointed that the public hospital’s board “accepted these income sources without question.”

The audit also raised questions about Byrns’ compensation and reimbursements for cigarettes, alcohol and golf trips.

Galloway’s office has turned over its findings to state and local law enforcement. Attorney General Josh Hawley’s public corruption unit is reviewing the findings.

Thomas said Hospital Partners had requested a meeting with Hawley’s office “to clarify this issue.”

Byrns faces felony theft and forgery charges in Louisiana related to allegations of impropriety during his tenure managing a hospital in that state.

Bryan Lowry: 816-234-4077, @BryanLowry3

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