Fletcher Allen Health Care last week agreed to pay $1 million to the federal government and Vermont, ending one piece of a major investigation into an expansion project whose price tag has more than doubled since it was first proposed.
One day after the settlement was announced, a state advisory panel recommended that state regulators give the project a green light as long as Fletcher Allen files regular reports on its expenses. John Crowley, the commissioner of the Vermont Banking, Insurance, Securities and Health Care Administration has until Nov. 20 to make a decision.
Under the terms of the settlement, the 529-bed hospital in Burlington, Vt., will pay $500,000 each to state and federal authorities to settle a civil complaint in which prosecutors alleged former hospital officials had lied about the scope and cost of the expansion. In return, both the U.S. attorney's office and the Vermont attorney general said they would not file criminal charges against the hospital.
However, the settlement does not shield the hospital from future government action. The state healthcare administration still can impose penalties relating to Fletcher Allen's certificate-of-need filing. It also doesn't shield the hospital from penalties arising from violations or wrongdoing in its past budgets filed with the state.
"With this settlement, Fletcher Allen acknowledges its mistakes, as we have done in the past. ... This settlement agreement is an important part of the healing process for Fletcher Allen, along with other steps that have been taken," said Louise McCarren, chairwoman of the hospital's board. As part of the settlement, Fletcher Allen admitted that some employees and other people acting on behalf of the hospital "engaged in criminal conduct ... including making false statements to state officials."
The investigation of the project, its cost overruns and the actions of former hospital executives is continuing, however, and former officials still could face criminal and civil charges.
"Investigation of wrongdoing or any possible wrongdoing is continuing," said William Sorrell, the Vermont attorney general. He declined to name the individuals being investigated.
The hospital's troubles stem from its expansion program, called the Renaissance Project. The state approved it in 2000 when the cost was pegged at $173.4 million. But questions about $300,000 in proceeds from a $150 million tax-exempt bond sale that was used to fund a $55 million private parking garage-in violation of bond financing agreements-led to state and federal investigations.