Auditors for the Palm Beach County Health Care District have found the district has no written policy requiring disclosure of any family relationship between district employees and its vendors.
During an internal audit of its contracted services, auditor Eugene Porter reported at this morning's audit and compliance committee meeting that he had discovered a medical records contract for the Healey Center went to the unidentified mother of an unidentified Finance Department employee. The relationship was not disclosed in the $40,000 annual contract or its accompanying documentation, Porter found. Last year the contractor billed the district $11,000.
Porter, who joined the district a year and a half ago, is the sole internal auditor on staff to watch all hospital billings and 1,145 contracts. For his external contracts audit, he told finance committee member Dr. Michael Dennis that he was able to review just 33 of them.
His audit concluded the district had serious gaps in how it managed its outside contracts.
"There is no district policy on contract management," Porter found.
His review found a potentially much more serious problem contract than the nursing home medical records vendor.
The primary care group the district employs in Belle Glade, Lakeside Physicians Practice, relies on an outside billing agency, E-Z Claims, to handle its billings.
Porter found E-Z Claims was writing off as uncollected 31 percent of clinic claims over the 120 day period reviewed.
The physician group bills for about $1.5 million a year.
The contract itself was a disaster, lacking basic requirements like issuing reports and reconciliations or district access to do any thing more than input claims.
The contract " included no requirements for the vendor to adhere to certain performance standards or provide reports, ratios or reconciliations to the district in order to evaluate accuracy and timeliness of the billing and collection process," the auditor found.
He discovered E-Z Claims had written off thousands of dollars worth of bills without discussing the issue with the district or even allowing a review. Their contract did not authorize them to do such write offs, nor did it prohibit them, Porter said.
Lakeside Administrator Brian Gibbons said the real number is smaller than $1.5 million based on the typical write-off rate of billings to Blue Cross, Medicare, uninsured, and so on, a write off rate that can reach 75 percent.
Still, he said he is preparing to bring billing back in house by 2012.
Later today, at 2 p.m., the Health Care District's full board will meet in Belle Glade at Lakeside Medical Center for the district's annual meeting and strategic planning retreat.
On the agenda will be a discussion of The Palm Beach Post's coverage of a district decision to spend $4 million on land for a $25 million replacement nursing home. The district's real estate agent for the transaction was a part-owner of the property the district selected.