Origins of hospital problems uncertain
Aspen Valley Hospital board candidate Bob D’Alessio said this week that the institution’s precarious financial situation began eight months ago, but those recently hired to examine the hospital’s books say the problems date back several years.
D’Alessio, who has served on the hospital board for six years and is seeking re-election, was asked at a candidate forum Monday why he didn’t pick up on billing errors that led to $11 million in lost billing and the firing of 34 employees.
“The cash flow of this hospital took a nasty turn eight months ago,” D’Alessio said. “There were isolated problems with billing in 2000, but we worked to fix those problems.”
But interim CEO Bob Karp, who was hired in January to examine the hospital’s finances, said current billing problems have been hurting the hospital for at least three years, though the losses have snowballed since October.
Karp recently hired Jim Carris, a hospital efficiency expert, to help in the investigation. It purportedly took Carris four days to discover the problems. Earlier this year, he discovered that nearly $7 million in hospital expenses had not been billed.
“The warning signs were very hard to discern, but the problems have been there for the last three years,” Karp said.
Board member and hospital treasurer John Jellinek said in March that some outstanding bills dated as far back as 1999. He also noted that the bills that go back to 1999 are almost surely uncollectable now.
Warnings about billing trouble have been public and loud. As far back as October 2000, two former AVH employees warned of impending billing troubles. In a guest opinion in The Aspen Times, Greg Kayne and Bill Brunworth expressed concern over lost revenue.
“At the most recent board of directors meeting, after repeated questioning, [chief financial officer] Verna Bartlett admitted to not billing many patients for 18 months. We wonder how much money has been lost due to this type of financial management with no report or study of losses,” Kayne and Brunworth wrote in the 2000 editorial.
The guest editorial was written in response to an advertisement taken out by the hospital board members, including D’Alessio, praising management for bringing forward a “balanced budget [and] almost doubling revenues.”
In a phone interview yesterday, D’Alessio said he doesn’t recall reading the 2000 guest opinion. He said it was unlikely that Bartlett admitted to billing problems as the guest opinion alleged, because such an admission by the CFO would have raised a red flag for the board.
“I don’t have any recollection of [Brunworth and Kayne’s] statement,” D’Alessio said. “It’s possible that I didn’t read it or that it wasn’t brought to my attention by hospital management.
“I don’t remember Bartlett saying [that there were bills aged past] 18 months. Had she said something like that in a board meeting to us, we would have been all over her. That’s totally unacceptable. It would have gotten a tremendous amount of focus.”
D’Alessio also countered that there were no significant warning signs of financial ill health available to the board until recently.
“Accounts receivable and cash-in-hand, the two barometer readings we have to measure the hospital’s financial situation, didn’t indicate any sustained or severe problems until January of 2003. It’s a matter of gravity,” D’Alessio said. “There were problems in 2000, but there was a very quick recovery and the financial situation was relatively stable. I have those numbers in front of me right now.”
Eben Harrell’s e-mail address is firstname.lastname@example.org