Audit will lead to improvements, Luis Hospital officials say

ST. CROIX - A Luis Hospital official said the hospital is taking the findings of a federal audit very seriously and is using them to help make improvements.

"We appreciate the OIG for helping identify these things," said Luis Hospital Chief Executive Officer Jeff Nelson, referring to the Office of Inspector General.

Hospital officials already had identified "many" of the issues auditors found before the auditors "ever came in the door," Nelson said.

The Daily News reported a week ago that the audit, conducted by the Department of Interior Inspector General's Office, found that significant operating losses, combined with the hospital's inability to control its own expenses, have eroded the hospital's ability to pay for many of its critical services and "now threatens its ability to meet community needs."

Luis Hospital officials are in different stages of rectifying the issues identified in the audit. Some of the problems were identified and the solutions in the works long before the audit findings were released, according to Nelson.

There is a long history behind some of the problems, and officials have created and implemented action plans to address them, he said.

Nelson said the hospital is working to improve revenue generation and is continuing to boost collections. The hospital also is improving the way it captures the proper patient charges, he said.

Likewise, he said, the hospital is working to bring expenses down.

Inspectors issued 12 recommendations to help address deficiencies found in the review, focusing on ways for the hospital to better manage its revenues and expenses.

Implementing the recommendations, auditors said in a letter to the governor, will provide the hospital with "ways to better manage its revenue cycle, including such basics as billing and collection, as well as more effectively monitor its accounts payable and its other sources of significant expense."

The federal review covered transactions that occurred in calendar years 2009 to 2011.

In a response to the report, a letter from Gov. John deJongh Jr. states that the hospital "is cognizant" of the issues raised and in concurrence with the recommendations.

"Recognizing the need to be vigilant with addressing its revenue and expense challenges, JFL has already taken steps to correct deficiencies, prior to and subsequently, since receiving the evaluation report," the letter said.

Those steps include actions plans and the assignment of teams to address the issues, including a revenue cycle team.

Interior's Inspector General's Office considers 10 of the recommendations resolved, but not yet implemented. According to the government's response to the audit, the recommendations are at various stages of implementation, with some up to 90 percent implemented and others not so far along.

The remaining two - a recommendation to frequently review rates to capture rising costs and a recommendation to adhere to internal rules and regulations by securing contracts for purchases and services - are considered resolved and implemented.

In its written response to the draft audit report, the local government also responds to some specific situations contained in the report.

For example, the audit report states that inspectors found that the hospital made $67,000 in overpayments to employees and contractors because no one reconciled outgoing payments with the terms of established agreements.

As an example, the report notes that an employee who temporarily acted in an executive management level position from October 2009 to December 2010 continued to receive elevated pay until August 2011, even though the position was filled in January 2011, resulting in what auditors says was an overpayment of $35,700 that has not been repaid.

The V.I. government defends those payments in its response.

"The decision to continue payments to this employee was not an oversight, but rather a chief executive officer decision," the written response states.

Darice Plaskett was acting CEO for more than a year before Nelson came on board as chief executive at Luis in January 2011.

"It was my decision to pay her those monies," Nelson said of the $35,700. After he took the job, Plaskett was doing the work of a chief operating officer, as well as "a bunch of other work," he said.

"I don't believe she owes us that money back. The value she gave us was worthy of the expense," Nelson said.

The government's written response to the draft audit report notes that "the employee continued to receive payments until a proper transition of roles could be established. Once the employee's new role was changed, compensation was changed as well."

Nonetheless, auditors chose to leave the section about the alleged $35,700 overpayment in the final audit report that was released to the public.

Testimony at a Senate hearing earlier this year indicated that Plaskett and another manager, a payroll supervisor, were among 86 employees who were fired from the hospital on Feb. 28. The remainder of those fired that day were licensed practical nurses and certified nursing assistants. Hospital officials said at the time that the LPN and CNA firings were to save money and were part of a larger initiative to staff the hospital with registered nurses.

In May, after Health Commissioner Dr. Mercedes Dullum resigned, deJongh named Plaskett to be acting Health commissioner.

On Sept. 22, Government House announced that deJongh had nominated Plaskett to the position. She still must go before the Senate for confirmation.

Plaskett did not return Daily News messages seeking comment for this story.

- Contact Joy Blackburn at 714-9145 or email jblackburn@dailynews.vi.

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