A last minute settlement may have saved Hartford Hospital from losing millions of dollars over a missing digit on an application for federal COVID-19 relief money.
In an application to the U.S. Department of Health and Human Services seeking reimbursement for extraordinary work and expenses during the coronavirus pandemic, the hospital accidentally chopped $1 billion from its 2018 revenue by mistakenly leaving a single digit off a number.
Based on the under-reported income, the federal government was going to deny the hospital about $42 million from its Provider Relief Fund, part of the billions appropriated by Washington for pandemic relief under the CARES Act.
Worse yet, timing wise, the hospital had only days to remedy the error because the appropriation of COVID-19 relief money from which it hoped to draw may be rescinded and returned to the U.S. Treasury in the frantic negotiation now underway between the White House and Congress to raise the national debt ceiling.
The current deadline is June 1.
Hartford Hospital sued in federal court to collect the money on Tuesday and on Thursday its attorney, James Healy, reached a hurried settlement with the U.S. Attorney’s office that gives the hospital essentially everything it asked for.
“Hartford Hospital worked tirelessly to care for Connecticut residents during the COVID-19 pandemic,” spokesman Tina Varona said Friday.
“Earlier this week, Hartford Hospital filed a lawsuit to obtain payment of provider relief funding owed for the hospital’s pandemic response,” Varona said. “The hospital is pleased that we have reached a settlement in this matter. The funds will be used to support the hospital’s mission in providing care for the community.”
In its suit, the hospital said it wanted relief from an “arbitrary and capricious” decision by the federal government. The problem arose, according to the suit, with the application for the third phase of provider relief funding – a pool of money doled out to hospitals in four phases.
The phase three application contained what the suit called a “scrivener’s error,” reporting 2018 revenue as $173,274,568 rather than $1,732,745,685.
Hartford Hospital argued the under-reported revenue was clearly an error because included elsewhere in the application was its 2018 tax return, which correctly reported revenue. Unpersuaded by the tax return, the hospital said the government “took the draconian position that Hartford Hospital was foreclosed from correcting the error …”
The government denied the hospital its Phase Three payment of $19,117,790.57 as well as its a Phase Four payment of $23,817,060.37.
Under the settlement, the Department of Health and Human Services agreed to recognize the correct revenue figure and use it as a basis for relief payments.