The sanctions, which include not only monetary payments but the value of free healthcare provided in lieu of cash, totaled $1.9 million during the fiscal year that ended June 30, up from $200,000 in fiscal 2012 and nearly $523,000 in fiscal 2011. In 2010, sanctions totaled $1.3 million.
The facilities board has been playing catch-up since 2009, when it was revamped by Gov. Pat Quinn.
The settlements negotiated by the board's staff, and then approved by the board, are imposed for a variety of violations of state regulations, such as failing to obtain approval before starting construction and exceeding state-approved budgets after the board issues a permit authorizing the project. But the meager amounts, given the multimillion construction budgets, do little to encourage healthcare providers to comply with the rules, some experts say.
“The fines look more like a slap on the wrist,” said Mark Pauly, health economist at the University of Pennsylvania's Wharton School. “I'm pretty sure the facilities that do this have already factored in what penalty they might have to pay and still decided to go ahead.”
Frank Urso, general counsel to the facilities board, says healthcare providers typically understand the need to comply with the regulations and the penalties are sufficient to deter violations.
“If people would just pay attention to the post-permit requirements after they get that permit or exemption so that they can maintain a compliant permit, it would resolve and minimize the number of compliance cases that we have,” Mr. Urso said.
The payments offset the cost of the board's operations, including salaries, supplies and equipment, he added.
The Chicago-area healthcare providers that reached settlements in fiscal 2013 include:Downers Grove-based DuPage Medical agreed to pay a $41,250 fine and provide $123,750 in free radiation therapy services, a total of $165,000, for failing to obtain approval before building a cancer treatment center and medical office building in west suburban Lisle. A spokeswoman for the practice, with 2012 net patient revenue of $415 million, declined to comment.The Illinois Department of Veterans' Affairs agreed to provide services valued at $150,000, including bolstering outreach efforts to veterans to provide better programming and services, for failing to update the board on the progress of a trio of projects, including a residential facility proposed during the Gov. George Ryan administration that was never built. A department spokesman said recent legislation has refined the reporting and coordination of projects between state agencies and the facilities board.Sherman Hospital in Elgin settled for a $125,000 fine for spending $4.8 million more than the approved $325.9 million budget for its 255-bed replacement facility that opened in December 2009. A spokeswoman for Sherman, now part of Advocate Health Care, did not provide comment. Roseland Community, which is facing financial turmoil and recently underwent a management shake-up, agreed to provide nearly $41,000 in free mammogram screenings for spending about $82,000 more than the approved $3.5 million budget for its adolescent psychiatric unit. Roseland CEO Tim Egan did not provide comment.
The largest settlement in fiscal 2013 was with Greenville Regional Hospital, a 42-bed rural facility about 50 miles northeast of St. Louis. Greenville agreed to provide free healthcare and community outreach and hire two physicians, valued at $773,500, for failing to submit an annual progress report and notice of completion for an addition that includes the ER and clinic space. The addition opened in 2004.
“I was appreciative that they did allow us to align up the money that we would have had to pay them with our existing business plan,” Greenville CEO Brian Nall said.
"Hospitals, health care groups pay up for violating state rules" originally appeared in Crain's Chicago Business.