The board of Fletcher Allen Health Care, Burlington, Vt., earlier this month adopted a certificate-of-need compliance plan that requires its management to swear to the accuracy of documents provided to the state.
Acting General Counsel Spencer Knapp says the unusual measure is designed to promote a "culture of compliance" with state law because of allegations last year that previous management had deceived state regulators about the cost of a major construction project and had failed to obtain CON approvals for some capital projects.
The controversies led to the resignations of top managers, including the chief executive, and a complete turnover of the board.
Although many hospitals have procedures to ensure compliance with government billing rules, a specific plan for compliance with CON procedures "is not something I'm aware of in other hospitals, nonprofit or for-profit," says Knapp, whose office will review CON requests. He says Fletcher Allen "may have raised the bar a bit" for other providers in the state.
The plan, which stemmed from a report by a trustees' committee, requires trustee approval for CON proposals and an employee education program. Knapp says Fletcher Allen also is improving its internal communications to detect CON-reviewable projects, which can be as little as $500,000. He says Fletcher Allen typically submits at least six CON proposals annually.
John Crowley, commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration, which oversees the CON process, says his agency was encouraged by the move. "On a related note, verification of information submitted in CON applications is one of the issues now being debated in the state Legislature," he says.
Earlier this month state Auditor Elizabeth Ready called for stronger state oversight of projects funded with tax-exempt bonds in a report to the Vermont Legislature. She recommended that audit committees of institutions that receive bond proceeds be required to report to the state and the public on how money is spent.
Ready specifically faulted the Vermont Education and Health Buildings Financing Agency. She said the hospital violated its agreement with the state by using more than $1 million of tax-exempt bonds issued by the agency to build a private parking garage.
"Proper controls should have been in place to prevent millions in cost overruns at Fletcher Allen that will, in the long run, drive up the cost of healthcare for every Vermonter," Ready says.
Knapp says Fletcher Allen recently sent the state a bundle of CON documents that had been verified and notarized with his signature. "This is requiring all of us in the organization to be more disciplined and accountable when we provide information," he says.