I spent much of my Labor Day weekend reading the report by Grady’s auditors examining the relationship between Grady and Emory. In a letter to me over a week ago, former Grady trustee Bill Loughrey alerted me to this document, saying that it raised questions about Emory’s record keeping practices and, more significantly, the amount that Grady actually owes Emory.
Emory is Grady’s largest creditor, claiming to be owed $45 million for services provided to the hospital.
First, some background. Under the 1984 agreement between the two institutions, Emory bills Grady for the time its faculty members spend at Grady providing “general supervisory, administrative and teaching services.” Fair enough, except that Emory does not actually keep track of the time spent providing these services. Instead, in a practice that is denounced by the auditors, its faculty physicians record their time at Grady a mere four weeks each year (one week per quarter) and then make a guess at how much time they spend at Grady for the remaining 48 weeks of the year, using the four weeks of recorded time as a guide. Emory then bills Grady for the full 52 weeks of work. Doing the math, that means there is no documentation for 92% of Emory’s bills for supervisory and administrative services.
A couple questions occured to me as I read the report. First, I wondered whether or not this seemingly unusual arrangement was in fact standard practice for teaching hospitals. The auditors answered that question before I could turn the page. It turns out it is not even standard practice at Grady. According to the report, Grady requires Morehouse faculty physicians to provide six times as much documentation as Emory physicians. That is completely backwards. While Emory physicians divide their time between Grady and Emory’s own hospitals, Morehouse doctors practice only at Grady. If the two schools are to be held to different standards, it should Emory that is required to keep more records, not Morehouse.
Second, I wondered whether it was possible that the four weeks of recorded time might in fact give an accurate enough picture of how the doctor spent the other 48 weeks of the year. The auditors answered that question on the very first page of the report, saying that the original scope of the audit had been reduced when Emory refused to allow any “retrospective or historical audit” of these records. If Emory did not want anyone attempting to double check the accuracy of those records, how can they reasonably be relied upon to make guesses about the weeks in which no records were kept?
The auditors repeatedly pointed out that this system of record keeping made it impossible for Grady to monitor the work of Emory’s physicians or even determine whether the work was actually being done. They recommended that the contract be amended to require that Emory increase the frequency of recording and reporting time. They also recommended that Grady conduct “spot checks” to determine whether Emory was accurately completing the time records. In the audit report, Emory agreed to these changes, but argued that a formal amendment to the contract was not necessary. Emory asserted, correctly, that nothing in the contract prevented them from keeping more complete records and promised to do so without amending the contract.
This never happened. Almost three years later, Emory’s physicians continue to keep track of their time at Grady only one self-selected week per quarter. In a press release issued last week, Emory proudly declared that the institution remains in compliance with the contract — something that is true only in the tortured sense that Emory persuaded Grady not to change the contract by making and then breaking a promise to voluntarily improve its record keeping.
The accuracy of Emory’s billings was only part of the motivation for Grady ordering the audit. The other was liability. Under the 1984 contract, Grady assumed all liability for malpractice by Emory’s physicians at the hospital. Because Grady is a public hospital that enjoyed a degree of “sovereign immunity” when the contract was signed, this was not initially a costly undertaking. It simply worked to extend the benefits of immunity to Emory’s physicians when they were working at Grady. But a 1994 Supreme Court decision significantly eroded that immunity, and Grady found itself paying millions of dollars each year defending and settling lawsuits for alleged malpractice. According to the report, faced with these mounting bills, the Grady trustees felt it important that they make sure Emory’s physicians were actually at Grady, giving proper supervision and preventing financially costly mistakes.
The report raises troubling questions, but far more disturbing has been Grady’s and Emory’s response to it. As best I can tell, no one has even looked at the document in the last two-and-half years. In the AJC article describing the report, one Grady trustee was quoted as saying he never heard of the audit and was not aware of any concern about Emory’s record keeping.
Both Grady and Emory are important insitutions, important to Atlanta, to the region and the state. But their importance does not excuse sloppy business practices or justify a refusal to be held accountable, especially where public funds are concerned.