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November 29, 2021 01:17 PM

New Rush hospital CEO uncovers potential financial misappropriation

Tara Bannow
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    Rush
    Rush University Medical Center

    Upon his arrival as CEO of Rush University System for Health's Oak Park hospital, Dr. Dino Rumoro discovered potential financial misappropriation by a former executive, the health system disclosed Monday.

    The Chicago-based academic health system said it's currently looking into the issue at its Rush Oak Park Hospital with help from external forensic auditors and counsel. Rush made the disclosure in its financial statement for the quarter ended Sept. 30.

    Bruce Elegant retired in June after more than 20 years as CEO of Rush Oak Park Hospital. Rumoro took over as the hospital's CEO on July 1.

    Rush spokesperson Tobin Klinger confirmed in an email that Rumoro was among the new leadership that discovered the potential misappropriation. He declined to identify the "former executive" referenced in Rush's financial disclosure.

    "With the arrival of new leadership at Oak Park, a potential misappropriation of funds was identified," Klinger said. "We immediately launched an internal investigation that is ongoing at this time."

    Rush said the amount of money involved is not expected to be material to the overall financial condition of the health system.

    Rush's Oak Park hospital, about eight miles west of its main medical center in Chicago, has 185 beds. In addition to traditional community hospital services, it offers diabetes care, orthopedic and radiation therapy. Rush has three hospitals in total: Rush Oak Park, its flagship Rush University Medical Center in Chicago and Rush Copley Medical Center in Aurora, Illinois, a Chicago suburb.

    Rush's operating margin was more than halved in the quarter ended Sept. 30 year-over-year. The system said the COVID-19 pandemic has taken a toll on its finances.

    Rush generated $24 million in operating income on $774.4 million in revenue in the quarter ended Sept. 30, a 3.1% margin. That's compared with $47.2 million on $734 million in revenue in the prior-year period, a 6.4% margin.

    Rush's admissions were effectively flat—falling 0.7%—in the quarter ended Sept. 30 compared with the same period in 2020. Inpatient surgeries fell almost 17% in the same period, even as outpatient surgeries increased by 8%. While occupancy grew year-over-year at Rush's hospitals in Chicago and Aurora, it dropped from about 45% in the 2020 period to about 29% in the recently ended quarter.

    The Health and Human Services Department's Office of Inspector General in 2019 found that billing errors at Rush resulted in more than $20 million in Medicare overpayments for inpatient and outpatient rehabilitation claims. Rush disputed the overpayment amounts.

    Rush was called out for having one of Chicago's less cost-efficient hospitals in a recent report from the healthcare think tank Lown Institute. The report estimated Medicare would save $27.5 million annually if Rush University Medical Center's 30-day per-patient cost—$16,372—came in line with that of Advocate Illinois Masonic Medical Center, $12,913.

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