Two days ago, Kentucky’s Auditor of State Accounts Adam Edelen released a long-awaited audit <\/a>of the University of Louisville’s handling of the QCCT fund. The Quality Community and Charitable Trust is funded by both state and local governments and is used by University Hospital to provide medical care to people who do not have any form of health insurance or the resources to pay out-of-pocket. The report was highly critical of the University and the QCCT Board that is controlled by the University. Despite a valiant effort by University officials to put a positive spin<\/a> on the audit, every news outlet I have seen that reported on the matter emphasized the negative aspects of the report. In my opinion, the University did not help its own case<\/a> in this regard.<\/p>\n Also two days ago, the University’s own consultants gave their final report on the hospital’s performance, and yesterday Louisville’s Mayor Fisher released his FY 2013 Budget including city funding for the QCCT<\/a> fund. It has been a lot to digest all at once. Yesterday I finally had a chance to read the full text<\/a> of the audit and I was stunned. The press release<\/a> describing it was bad enough. The report itself is a devastating indictment of the failure of University responsibility for these public monies. Read the full report<\/a> for yourself and form your own opinions. I could not believe what I was reading and that this behavior could have been allowed to go on so long. There is much accountability blame to go around.<\/p>\n The press release contained a line that said the auditors \u201cfound no evidence that taxpayer dollars were abused.\u201d I respectfully disagree with the Auditor\u2019s office on this point. There is no such exonerating language or even supportive evidence in the body of the report. In fact the audit makes it clear that it was not a financial audit of the QCCT, but rather more of an organizational and management analysis. The report\u2019s own language makes it clear that it was not possible to determine how the public\u2019s money was actually used. I had been preparing a more lengthy analysis of the Audit but it is at 17 pages and growing: too long to buff up and publish here in a timely way. If there is a request, or if this generates some pubic discussion anywhere, I will attach it. \u00a0To give you a flavor of what the Audit actually said as opposed to how the University wanted to spin it, look at some of the language used by the auditors.<\/p>\n \u2022 The QCCT board met on December 5, 2007 and did not meet again until February 13, 2012.<\/p>\n \u2022 \u201cIndigents and individuals who have the means but fail to pay should not be lumped in the same category as it relates to the QCCT fund\u201d<\/p>\n \u2022 \u201cUMC did not require indigents to verify their income, making \u2022 The QCCT Board \u201cextends its management function rather than providing accountability. Therefore accountability is weak.\u201d<\/p>\n \u2022 \u201cUMC cannot identify which indigent patients received QCCT funding within its accounting system.\u201d<\/p>\n \u2022 \u201cSince UMC has the ability to define its own charity care policies, and no universally accepted definition of either indigent or medically needy exists, the examination also considered potential conflicts between UMC’s practices and the intent of the QCCT agreement.\u201d<\/p>\n \u2022 \u201cUMC personnel are not aware of the scoring methods used by the collection agency, so there is no evidence to determine that the patient did not have the means to pay or otherwise meet the definitions of indigent or medically needy as defined in the QCCT agreement.\u201d<\/p>\n \u2022 \u201cauditors noted 33 of 50 patient files reviewed, or 66%, did not complete an application for income verification to determine that the patient was eligible for QCCT funding.\u201d<\/p>\n \u2022 \u201cthis process gives the appearance that QCCT funds are used to cover bad debt.\u201d<\/p>\n \u2022 Non-Kentucky patients were ultimately \u201cwritten off as QCCT after collection attempts failed, and the patient was deemed medically needy.\u201d It appears to me that the University allows a collection agency to do its QCCT eligibility assessments for it. This opens the door wide for financial conflicts of interest. I hope I am incorrect.]<\/p>\n \u2022 \u201cThe Indigent Care Log did not agree to UMC\u2019s indigent care reports. \u2026 because the indigent care reports were based on estimated data.\u201d<\/p>\n \u2022 \u201cQCCT funding did not receive the attention it deserved due to a board structure that was not suited for proper oversight, an outdated agreement, and administrative processes that failed to provide sufficient details for determining compliance with the agreement or for assessing whether the intended objectives were met.\u201d<\/p>\n \u2022 \u201cIn the absence of clear direction, it appears UMC applied QCCT funding to its total unfunded costs of providing hospital care\u2026\u201d<\/p>\n \u2022 \u201cAlthough UMC did provide estimated data to illustrate its assertion that total indigent care costs exceeded QCCT funding, it did not have sufficient recordkeeping to support that those costs are derived from patients that met pre-defined criteria for indigent or medically needy.\u201d [These are the data that are being hidden by the University from the public!]<\/p>\n \u2022 \u201cOverall the agreement was not administered in a way that promoted accountability and transparency. QCCT serves a population that is the neediest in the Louisville Metro area, therefore it is important to have strong accountability to ensure this population receives the benefits of QCCT funding.\u201d<\/p>\n Selected Findings from Appendices:<\/strong> Appendix A & D: \u00a0 No accepted definition of Indigent Care.<\/strong> Unless we all use the same definitions of words like, Charity, Indigent, Medically Needy, Uncompensated, Bad Debt, Discount, Write-Off, Community Benefit and the like, we can never know if our community non-profit hospitals are doing their fair share to deserve their tax-exempt status. Neither will be able to truly know if University Hospitals is being asked to do too much. We as a community are essentially telling our poor people to go to University Hospital, and only University Hospital. \u00a0Even if we accept this as an ethical posture [and we cannot], the money should be sufficient and follow the patients\u2013 be that QCCT, other public money, or tax-exempt hospital profit.<\/p>\n Appendix B: \u00a0 \u00a0Inflated Charges.\u00a0Plenty of Money?<\/strong><\/strong> I have long written that University of Louisville Hospital charges more for its services than almost any other hospital in Kentucky. Appendix B tells me that even I have understated this terrible distortion. For last year\u2019s inpatients, UofL charged three times what it cost to provide those services to charity care patients. Even at the modest discount the Hospital pays itself from QCCT, it appears to be making a huge profit. Is this where the $millions the University gifts itself for research come from? The shameful tragedy here is that these hyper-inflated charges are what every patient using UofL Hospital facilities gets charged. This is the amount the bill collector comes after you for. [What if the bill collector also had access to the QCCT cookie jar? Surely that is not the case.] \u00a0Why is this not gouging? Why do we complain about gasoline prices and not this? Was the Auditor given incorrect financial data? Should the Auditor now go back and do the full financial audit of the University that I and others think is long overdue? I vote yes.<\/p>\n Concluding comment:<\/strong> Peter Hasselbacher, MDQuotations from the State Auditor\u2019s Report:<\/h2>\n
\nit difficult to ensure that QCCT funds were not being applied to non-indigents\u2019 accounts\u201d<\/p>\n
\nPrecious little actual financial data was available in four single-page appendices. [Did the University stonewall the Auditor too?] Here are some items I sumarize.<\/p>\n
\nThe most common definition of \u201cCharity Care\u201d is that which is provided for which no payment is expected and no bill will be submitted. It is quite clear that the University of Louisville has a very different definition. If the public does not know what we are buying with our dollars, it is impossible to know if the money is well spent.<\/p>\n
\nFor the two years before 2011, University Hospital was collecting more money from the QCCT fund and Medicaid Disproportional (DSH) payments for the uninsured than it needed to cover its costs of treating those patients. This does not even take into account Medicare DSH and other payments for the uninsured! What is the basis for the claim that the University is not getting enough public money? Someone \u2018splain it to me so I can understand.<\/p>\n
\nGiven all the above and much more, I must again respectfully disagree with the unsupported statement in the press release that there is \u201cno evidence that taxpayer dollars were abused.\u201d Would you want your tax dollars to go into the slush fund described in this Audit? I for one do not. I say, no more games. I say, no more secrecy. I say, use hospital profits to support the hospital, not commercial research, economic development, or unaccountable salaries. I say no to the separate and unequal system that this rendition of the well-intentioned QCCT program has helped prop up. I say yes to a well-funded, just, and equitable program of providing quality medical services to our community. Who is willing to say differently?<\/p>\n
\nEmeritus Professor of Medicine, UofL
\nPresident, KHPI
\nMay 25, 2012<\/p>\nShare this:<\/h3>