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Auditor finds progress made at cash-strapped rural Missouri hospital

Auditor Galloway's said her follow-up review of Putnam County Memorial Hospital reveals an end to questionable lab billings. (MGN Online)

Auditor Nicole Galloway stated a rural hospital board has been working to implement recommendations from her office, but the hospital remains in poor financial condition.

In a follow-up report of Putnam County Memorial Hospital issued Wednesday, Galloway stated the board had ended its agreement with Hospital Partners, Inc., but continued to pay a company affiliated with Hospital Partners, Inc. for billing services, and paid at least 10 other labs for billing and lab management fees through April 2018.

"Our audit revealed a billing scheme that we now know extends well beyond Putnam County Memorial Hospital and could impact healthcare costs for all of us," Galloway said in a release. "I'm pleased to see that action has been taken to end this questionable activity in Putnam County. The citizens that rely on this hospital deserve legitimate solutions that ensure the ongoing availability of acute care."

A 2017 audit found $90 million in inappropriate lab billings, leading to a federal investigation into hospital billing schemes. Galloway had said the Hospital Partners CEO used the Putnam County hospital as a shell organization to channel $90 million worth of insurance payments to another lab company.

An officer of the Hospital Partners group, Jorge Perez, bought Fulton Medical Center in September 2017. Perez told a Fulton Town Hall at the time he has been saving rural hospitals for decades.

Putnam County Memorial Hospital remains in poor financial condition, according to Galloway, as the board works to increase revenues through legitimate lab activity, which includes processing lab specimens for a small hospital in Arkansas.

After the audit, the board obtained legal representation to ensure adequate review of future contracts. A long-term hospital employee is now serving as the CEO to ensure proper oversight of management activities.

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