An audit of the Center for Health Information and Analysis [CHIA] has shown that the state agency did not adequately monitor the financial conditions of acute care hospitals and health systems, according to the office of State Auditor Diana DiZoglio.

In a statement, the audit revealed that from July 1, 2021 through June 30, 2023,the Department of Public Health received notification from six acute care hospitals – Anna Jaques Hospital, Tufts Medical Center, Shriners Hospital for Children in Springfield, Steward Norwood Hospital, MetroWest Medical Center and Beth Israel Lahey Health’s Beverly Hospital – for either closure or the discontinuation of essential services.

“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. We urge the administration to swiftly implement our recommendations and will be revisiting these issues in roughly six months to track progress.”

CHIA’s 2021 and 2022 Massachusetts Acute Hospital Financial Performance Reports make no mention of these six acute care hospitals being at risk for closure or discontinuing essential services, according to the audit. Additionally, the audit found CHIA did not complete any health system profiles for any of the eight hospitals owned by Steward Health Care during the audit period.

“By not receiving, analyzing, and reporting on data related to hospitals and health systems in Massachusetts, CHIA limited its own ability to identify and address concerns regarding hospitals at risk of closing,” the statement read. “This may have prevented policymakers from becoming aware of these issues and taking actions to prevent or soften the impacts of these issues.”

In a statement released on Monday, CHIA said that it “respectfully disputes the conclusions presented in the auditor’s report. Since its inception in 2012, CHIA has consistently collected, analyzed and reported data on the financial performance of hospitals and health systems in a timely and complete manner. CHIA’s primary interest is receiving complete and accurate information to adequately monitor and report on hospital finances. CHIA has offered reasonable extensions on a case-by-case basis to ensure the completeness and accuracy of the data. Such extensions have never impeded CHIA’s ability to publish its quarterly or annual reports on the financial performance of Massachusetts hospitals.”

Financial reports not filed

The audit found CHIA did not assess potential fines of $1,613,000 for acute care hospitals and health systems that did not file financial reports by required deadlines. During the audit period, CHIA never collected audited financial statements from these 10 acute care hospitals:

Athol Memorial Hospital

Heywood Hospital

Morton Hospital

Nashoba Valley Medical Center

Steward Holy Family Hospital

Steward Carney Hospital

Steward Good Samaritan Hospital

Steward Norwood Hospital

Steward Saint Anne’s Hospital

Steward St. Elizabeth’s Medical Center

“By not ensuring that acute hospitals and health systems meet the Commonwealth’s financial reporting requirements in a timely manner, CHIA risks overlooking hospitals and health systems that are at risk of closing,” the statement from the auditor’s office read.

Heywood Healthcare, which operates Heywood Hospital and Athol Hospital, filed for bankruptcy in 2023, but emerged in October 2024 as an independent organization. Steward Health Care, which operated Carney, Good Samaritan, Morton, Holy Family, Norwood and Saint Anne’s hospitals and St. Elizabeth’s Medical Center during the audit period, filed for bankruptcy in 2024.

Regarding the financial statements, the agency said that Heywood was unable to issue an audited financial statement from a registered certified public accountant in fiscal year 2021 and 2022 and therefore, did not have an audited financial statement to produce.

This was mentioned in a statement from Heywood Hospital President and CEO Rozanna Penney. In it, she said that hospitals in Gardner and Athol did not provide audited financial statements for the years 2021 through 2023 due to a failed electronic medical record [EMR] transition initiated in February 2021. This was integrated with the system’s revenue cycle, compromising the overall financial performance and records, said Penney.

“Though the system was unable to provide audited financials, unaudited internal financial reports, and any other obtainable operational data were made available to state officials and regulatory agencies prior to the filing of Chapter 11, and the organization maintained transparency throughout the bankruptcy process,” Penney wrote, adding that the system will be filing FY25 audited financials.

CHIA added that Steward Health Care claimed it was not required to submit system-level audited financial statement data. It fined Steward multiple times over several years for noncompliance which has been the subject of ongoing litigation. In 2023, the Superior Court ruled in CHIA’s favor, affirming Steward’s obligation to submit its financial data to the agency. Steward appealed this decision, and the matter is still in Appeals Court, but “stayed” until the bankruptcy case is resolved.

“Additionally, it is imperative to note that CHIA’s fining authority is discretionary under statute and regulations; the agency issues fines entities when necessary for compliance with reporting requirements –as it fined Steward Healthcare,” the agency wrote. “The $1,613,000 figure referenced in the report is misguided as it does not account for CHIA’s discretion for reasonable extensions, Heywood’s inability to complete audited financials, nor the agency’s prior fines and active litigation with Steward.

In both instances, CHIA used other data sources where possible, including standardized financial data collected by the agency, to fulfill its obligation to report on the financial performance of these systems, their hospitals, and physician organizations. CHIA has been resolute in its position that hospitals must comply with all financial reporting requirements under General Laws and regulations, including providing audited financial statements.”

CHIA is an independent state agency with a mission to promote a more transparent and equitable health care system for residents of the Commonwealth. CHIA manages a consumer health information website, CompareCare, that offers tools to compare the costs of certain medical procedures at a variety of healthcare facilities in Massachusetts.

The audit also found CHIA did not publicize the availability of the CompareCare website, did not include certain required information on the website and did not ensure the website is fully accessible under the Americans with Disabilities Act.

“Finally, CHIA disputes the findings related to the CompareCare website, as CHIA regularly updates CompareCare to include the best data available at the time,” the agency wrote. “Two separate updates were made to CompareCare 18 months apart during the performance audit period: one in December 2021 and another in June 2023.”

Max Bowen can be reached at 413-930-4074 or mbowen@atholdailynews.com.