Regulators say hospital oversight needs strengthening

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(Host) Vermont’s top health care regulator says the oversight system needs to be strengthened to avoid future cases of hospitals misleading state agencies. But Banking and Insurance Commissioner Elizabeth Costle disagrees with Governor-elect Jim Douglas who says that the state should have asked harder questions of Fletcher Allen.

VPR’s John Dillon reports:

(Dillon) Both Governor Elect Douglas and Elizabeth Costle say that something went seriously wrong with Fletcher Allen Health Care.

The Burlington hospital misled regulators about the scope and cost of its $326 million “Renaissance Project.” Douglas said on VPR’s Switchboard program this week that regulators should have seen it coming. He said the Department of Banking, Insurance, Securities and Health Care Administration – known as BISHCA – could have asked tougher questions:

(Douglas) “There was some information submitted to BISHCA, I’m told, that perhaps should have led someone there to ask more questions. The long term capital plan of Fletcher Allen has been submitted to the Department for some time and so this shouldn’t have been a surprise to somebody at that Department.”

(Dillon) BISHCA Commissioner Elizabeth Costle disagrees. She says the state did have the Fletcher Allen long term capital plan, but that it involved considerably less money than the hospital now plans to spend.

(Costle) “One was submitted in 1999 that gave about half of the amount we now see. So that was obviously inaccurate. You know, Jim has a lot of things on his mind, and he hasn’t had a chance to be briefed on this.”

(Dillon) Costle says there was no document on file with the state that showed the ultimate scope of the project. She also says it’s hard to catch people who deliberate mislead regulators.

A report by hospital trustees says Fletcher Allen CEO William Boettcher misled the state and kept information away from his own board:

(Costle) “The thing is, they only told us about pieces of the project. And I’m not sure that any expert other than getting a forensic accountant to go in and look at where every expenditure went. And regulatory processes aren’t set up for that. They aren’t set up for people who deliberately lie. And Boettcher thought he could get away with it, frankly, because like I said, he thought we were understaffed and therefore he’d be able to hide this from us. Well, he was wrong. We found out about it. It was after the fact, but we did find out about it.”

(Dillon) Costle says she’d like to see the law changed so that hospital officials are liable for civil penalties if they submit false information. She says she plans to leave state government and is not looking for a job with the Douglas administration.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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