🔒State auditor assails UMass Memorial Health over use of $6.2M in COVID funding

The Massachusetts state auditor is calling into question UMass Memorial Health’s use of $6.2 million it received in COVID relief grants, claiming the Worcester system could have used the funding to continue its maternity center operations at its Leominster hospital, which the system shuttered over a lack of demand in September 2023.

State Auditor Diana DiZoglio released its audit of UMass Memorial on Nov. 4, which was conducted from July 1, 2020 through June 30, 2023. The audit determined the hospital system could not provide accounts for the millions it received in Executive Office of Health and Human Services grants, nor could it account for when or if it had reported births in its hospitals to the Department of Public Health.

UMass Memorial disputes the auditor’s claims, saying it accounted for the $6.2 million as part of $10 million in bonuses paid to frontline workers, and the money couldn’t have legally been used for the Leominster maternity ward, which was not closed for financial reasons.

“Our audit highlights significant concerns regarding UMass Memorial Health Care’s management of public funds intended to support essential health services. When an organization cannot account for how millions of taxpayer dollars were spent, it raises questions not only about financial oversight but also about whether communities are receiving the healthcare support they need,” DiZoglio wrote in a statement to WBJ.

This audit was originally reported on by the Worcester Telegram & Gazette.

DiZoglio’s report asserts the system had originally said it did not keep records of its use of the $6.2 million from the EOHH, but five months later, came back and claimed it had used the entirety to pay bonuses between 2011 and 2022.

While UMass Memorial provided a spreadsheet documenting the bonuses, DiZoglio said the bonuses in the spreadsheet totalled $10.6 million, and her office could not verify the accuracy of the bonuses due to the system’s lack of supporting records.

In total, UMass Memorial received $99.89 million in state and federal COVID relief funding between 2021 and 2023, according to the report.

But UMass Memorial refutes DiZoglio’s claims, doubling down on the fact that it sent financial records to the Office of the State Auditor documenting the appreciation bonuses given to thousands of its front-line workers, including nurses.

“By doing so, UMMH fully complied with all provisions and requirements related to its receipt of these funds,” UMass Memorial wrote in a statement to WBJ.

Additionally, the system states it had not provided supporting documentation because the OSA never requested them, according to UMass Memorial’s response to the auditor documented in the report.

“It is unclear what those would be other than the previously provided materials,” UMass Memorial said in the report.

With an overarching critique, OSA contends even though the use of EOHH funds to pay employee benefits is permissible, it was not in line with the payment agreement originally set by UMass Memorial and the department.

UMass Memorial references that same agreement when refuting claims it could have used the $6.2 million it received to keep the maternity ward open at its HealthAlliance-Clinton Hospital in Leominster; the system claims the maternity ward was not closed due to COVID-19, and thus it could not have used the EOHH’s COVID relief funds toward that purpose under their payment agreement, according to the report.

The system cited its original reasons for closing the unit:

“For several years, well-documented workforce shortages exacerbated the challenges of fully staffing the unit consistently, despite our persistent attempts to recruit and retain clinicians in this region,” UMass Memorial wrote in the statement to WBJ. “This, along with the steadily declining number of births in North Central Massachusetts, had a significant impact on our unit’s ability to continue to provide the best possible labor and delivery care to our patients and contributed to the need to close the unit.”

The auditor’s critiques of UMass Memorial’s maternity ward operations didn’t stop there: OSA states the hospital system could not account for when or if it had reported births to the DPH.

Out of a random sample pool of 74 births, the OSA asserts UMass Memorial did not show evidence it had reported all births to DPH within 10 days or that it had accounted for them in HealthAlliance's annual reconciliations with DPH.

OSA claims UMass Memorial did not provide logbook entries for 89% of the 74 births, a measure used by the system to guarantee all birthing patients have been sent the needed forms to fill out for DPH.

UMass Memorial denied these statements, contending it provided extensive information for all 74 births during the audit. The system also said it provided logbook entries for 8 of the 9 patients from HealthAlliance documented in the sample, with one omitted due to the baby being stillborn.

Additionally, the system claims it has robust electronic medical records at all of its hospitals, showing it can account for the births it reported to DPH.

UMass Memorial reported 14,784 births to the DPH between Jan. 1, 2020 through Dec. 31, 2022 from both its UMass Memorial Medical Center in Worcester and HealthAlliance-Clinton Hospital in Leominster.

HealthAlliance reported 568 births in 2020, another 543 in 2021, and 501 in 2022.

UMMC delivered 4,142 in 2020, another 4,437 in 2021, and 4,593 in 2022.

Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare and diversity, equity, and inclusion industries.