Massachusetts State Auditor Diana DiZoglio has found that the Center for Health Information and Analysis failed to monitor acute care hospitals' financial conditions adequately, according to an audit released Jan. 3.
Eight things to know:
1. CHIA is an independent state agency that aims to promote a more transparent and equitable healthcare system. It manages a consumer health information website, CompareCare, that offers tools to compare the costs of certain medical procedures at various healthcare facilities in Massachusetts.
2. The audit reviewed the period from July 1, 2021 to June 30, 2023, during which six hospitals notified the department of public health about closures or discontinued services, according to the audit. However, CHIA's 2021 and 2022 hospital financial reports failed to mention that the hospitals were at risk for closure or discontinuing essential services. The hospitals included:
- Anna Jaques Hospital (Newburyport)
- Tufts Medical Center (Boston)
- Shriners Hospital for Children (Springfield)
- Steward Norwood Hospital
- MetroWest Medical Center (Framingham)
- Beverly Hospital
3. The audit also found that CHIA did not complete any health system profiles for any of the eight hospitals owned by Dallas-based Steward Health Care during the audit period.
4. During the audit period, CHIA never collected audited financial statements from 10 acute care hospitals:
- Athol Memorial Hospital
- Heywood Hospital
- Morton Hospital (Taunton)
- Nashoba Valley Medical Center (Ayer)
- Steward Holy Family Hospital (Methuen)
- Steward Carney Hospital (Boston)
- Steward Good Samaritan Hospital (Brockton)
- Steward Norwood Hospital
- Steward Saint Anne's Hospital (Fall River)
- Steward St. Elizabeth's Medical Center (Boston)
5. CHIA also neglected to assess fines of more than $1.6 million for hospitals and health systems that did not file financial reports by their deadlines. The hospitals included Athol Memorial and Heywood Hospital, which later filed for bankruptcy as part of Heywood Healthcare.
In a Jan. 6 statement shared with Becker's, Rozanna Penney, CRNA, president and CEO of Heywood Healthcare, said Heywood and Athol hospitals were unable to provide audited financial statements for the years 2021 through 2023 due to a failed EMR transition initiated in February 2021. The hospitals' EMR was integrated with the system's revenue cycle, compromising the overall financial performance and records. This was one of the several factors that resulted in the the system filing for Chapter 11 protection on Oct. 1, 2023, following a transition in key leadership.
"Though the system was unable to provide audited financials, unaudited internal financial reports, and any other obtainable operational data were made available to state officials and regulatory agencies prior to the filing of Chapter 11, and the organization maintained transparency throughout the bankruptcy process," Mr. Penney said. The health system emerged from bankruptcy on Sept. 30, 2024, and will be filing audited fiinancials for fiscal year 2025, its first post-bankruptcy year.
6. By not ensuring that acute hospitals and health systems meet the Commonwealth's financial reporting requirements in a timely manner, CHIA risks overlooking facilities that are at risk of closing, according to the audit. By not receiving, analyzing and reporting on such hospital financial data, CHIA limited its own ability to identify and address concerns regarding hospitals at risk of closing. This may have prevented lawmakers from becoming aware of these issues and taking actions to prevent or soften the effects of these closures or service cuts.
7. The audit also highlighted shortcomings in the CompareCare website, citing lack of publicity, outdated cost data and missing legally required information on infections and serious events. These issues hinder CHIA's ability to support informed healthcare decisions and maintain transparency, according to the audit.
"Our audit of [CHIA] revealed a startling lack of oversight around the financial conditions of hospitals in the Commonwealth, Ms. DiZoglio said in a Jan. 3 news release. "We urge the administration to swiftly implement our recommendations and will be revisiting these issues in roughly six months to track progress."
8. The Massachusetts Legislature on Dec. 30 passed a bill that will require private-equity healthcare investors to make new financial disclosures, increase financial transparency by gathering more information regarding hospital finances and help maintain a more stable and sustainable healthcare system. Gov. Maura Healey has until Jan. 9 to sign or veto the legislation.