State regulators impose restrictions on Fletcher Allen

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(Host) State regulators have imposed a number of new restrictions on Vermont’s largest hospital.

At the top of the list is a requirement that Fletcher Allen Health Care try to recover damages from the people who misled regulators about the true cost of its $364 million expansion.

VPR’s John Dillon has more.

(Dillon) Fletcher Allen has been working on its massive Renaissance Project for several years. But it was only on Thursday that the hospital finally got state approval to build the $364 million expansion.

The Department of Banking Insurance Securities and Health Care Administration granted what’s called a certificate of need permit.

But the approval comes with 34 conditions. Fletcher Allen misled regulators about the size and scope of the project. And regulators now want the hospital to seek restitution from the individuals who may have violated state law.

The state also set strict financial reporting requirements for Fletcher Allen, including a provision that officials submit monthly reports under oath.

Paulette Thabault is deputy commissioner of the department.

(Thabault) The conditions themselves are really focused on making sure that the project rolls forward and that it occurs on time and that it stays on budget.

(Dillon) In October, the hospital settled a criminal case with state and federal prosecutors. Fletcher Allen admitted criminal wrongdoing and agreed to pay a $1 million fine.

But prosecutors say they may pursue additional action against former hospital officials who allegedly engineered the plan to deceive regulators.

Doctor Melinda Estes was hired this summer as the new Fletcher Allen president. She says she’s pleased the hospital was granted a certificate of need, or CON.

(Estes) I think having the CON approved as we requested it is a crucial first step toward putting the Renaissance Project forward on the right foot and letting us, you know, move forward. Because obviously our goal is to provide the highest quality health care we can for the citizens of the state of Vermont, and I would hope this begins to help us move in the right direction.

(Dillon) But Doctor Estes did not want to comment on any of the conditions that the state imposed. She says she needs more time to review the 84-page document, including the requirement that the hospital try to recover costs from former employees.

Deputy Commissioner Thabault says the new permit conditions mean the state will continue to look closely at Fletcher Allen for years to come.

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

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