Hospital executives admit to overpaying staff by millions of dollars
LANGDON, ND (WDAZ)--Was it a scam to pad their paychecks with millions of dollars or just a simple mistake?
That's what a local hospital is trying to figure out after it was discovered three of its employees were the highest paid in the country.
It all has to do with what's called fair market value.
Hospital administrators say they're supposed to consider the average rate of what doctors are paid for their services in their area.
That combined with what the doctor wants to be paid determines their contracts--but Cavalier County Memorial Hospital didn't consider those numbers for years -- and now they're paying the price for it.
An audit reveals shocking numbers.
"We had the highest paid providers that they'd ever seen in the country,” said Administrator Chris Wyatt.
A hospital over-paying two doctors and one nurse practitioner for nearly a decade.
"The amount we were looking at was in the neighborhood of $2.5 million dollars,” said Wyatt.
Chris Wyatt, Cavalier County Memorial Hospital's new CEO, had only been on the job a week.
He made the decision -- along with the hospital's board -- to report the issue to Health and Human Services.
"We renegotiated contracts with our providers but also throughout the facility to make sure that it could sustain itself,” said Wyatt.
All 3 providers are no longer with the hospital..and the hospital has to pay a steep penalty--a $750-thousand dollar fine to the federal government.
The hospital's board all left after the financial issues were uncovered -- leading as far back as 2007.
"This will set us back some but the future of the hospital looks very bright,” said Wyatt.
The hospital has since changed their policies and hired a new Chief Financial Officer to make sure they're using fair market value.
The staff is reaching out to the community in order to let them know about the changes.
"We want to make sure that we're able to provide transparency and let them know why the events occurred and let them know so that we can start that rebuilding process,” said Wyatt.
All in hopes of rebuilding trust with patients.
Wyatt wouldn't say whether or not those health care providers intended to break the law.
Along with fining the hospital, the feds could also go after the three specific providers for more than $2-million dollars. It's unclear whether or not they'll do that.
And can patients get any portion of their money back?
The hospital's administrator says no--the rates hospitals pay doctors for their services are different than what you pay to your insurance.
There's a meeting Wednesday night, Jan. 10, at Langdon High School starting at 7 p.m., if you want to learn more on what's been going on with the hospital.