Failures by a state agency may have prevented regulators from taking steps to avert the crisis surrounding Holy Family Hospital and other Steward Health Care hospitals.
State Auditor Diana DiZoglio’s office said Friday there is a “direct correlation” between inaction by the state’s Center for Health Information and Analysis and the closing of hospitals. The routine audit of the agency, founded by the legislature in 2012 and known as CHIA, covered the two-year period ending June 30, 2023. The auditor’s office adds, the agency failed to collect financial information or assess up to $1.6 million in fines.
“People must have access to the vital health care services they need,” said DiZoglio. “Hospital closures in recent years, however, have left patients worried about where they can access care and resulted in job losses for invaluable nurses and healthcare workers. Our audit of the Center for Health Information and Analysis revealed a startling lack of oversight around the financial conditions of hospitals in the Commonwealth.”
Further, DiZoglio’s office reported the independent state agency also failed to mention notices from six hospitals, including Newburyport-based Anna Jaques Hospital’s 2021 closing of inpatient pediatric services and Steward Norwood Hospital’s closing of obstetrics services. The auditor’s office called these “essential services” for which notices were filed with the state Department of Public Health. The audit adds, “We also found that CHIA did not complete any health system profiles for any of the eight hospitals owned by Steward Health Care during the audit period”
The auditor’s office notes, “Overall, CHIA appears to have overlooked the risk of hospital closures in the Commonwealth,” and adds the information “could have assisted others in drawing conclusions regarding hospital stability.”
A copy of the audit was provided Friday to CHIA Executive Director Lauren Peters.
CHIA responded during the audit that it fined Steward Health Care and won a 2023 Superior Court ruling. However, the agency said, “Steward appealed this decision, and the matter is still in Appeals Court, but ‘stayed’ until the bankruptcy case is resolved.” DiZoglio’s office said, the stay “should not have limited CHIA from continuing to issue fines to Steward Health Care for each instance that it refused to comply with financial reporting filing requirements.”
Further, CHIA responded, the agency exercised its “discretion for reasonable extensions.”
The auditor’s office said it will revisit the issues in about six months.
Lawrence General Hospital went on to purchase the Methuen and Haverhill campuses of Holy Family Hospital out of bankruptcy for $28 million.