Audit is hard on DEP - Agency lax on hospital collections, investigation finds

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The city’s method for billing private hospitals for water use is headed for the ER unless steps are taken to resuscitate it soon, an audit released this week concluded.

According to Comptroller William Thompson, the city’s Department of Environmental Protection (DEP) failed to collect over $13.4 mullion in water and sewer charges from hospitals across the city.

“The Department of Environmental Protection does not make timely and appropriate collection efforts,” Thompson said.

“Given that a number of hospitals are now in bankruptcy or are recommended for closure, the DEP may never be able to recover all of the money it is owed.”

As of June 30, Thompson said, the 58 private hospitals in the city had outstanding water and sewer charges amounting to $13.4 million. Only private hospitals are responsible for water and sewer charges.

Twenty six hospitals paid all or nearly all of their outstanding balances within a month, but the remaining 32 did not, Thompson said, and the DEP does not have a policy for collecting the money, the audit found.

In Brooklyn, Brooklyn Hospital Center’s Downtown Brooklyn Campus owed $791,221 as of June 30—the most of any hospital in the borough, of which $63,466 was paid in July, the audit showed. Brookdale Hospital Medical Center in Canarsie owed $692,299, of which $125,395 was paid in July, according to the audit.

Maimonides Medical Center in Borough Park owed $493,548 as of June 30, of which $145,993 was paid in July, the audit stated.

“We’re working with the DEP to streamline the billing and payment process and expect to bring our account up to date soon,” said Eileen Tynion, a spokesperson for Maimonides.

Cabrini Medical Center in Manhattan’s Gramercy Park owes $3,759,296—the most of all the hospitals on the list, according to the audit.

The audit, which covered January 2004 to June 2007, found “significant internal control weaknesses” regarding the city’s collection practices.

Auditors found 313 hospital accounts untracked by a division of the DEP used to follow such charges.

“DEP cannot aggregate charges common to a single customer,” the audit states. That means that while the agency concedes that collections efforts should begin when bills exceed $50,000, the DEP is not even aware when the $50,000 threshold has been met.

And hospitals might not even be aware either, since they don’t receive comprehensive bills, the audit states.

For example, Maimonides receives 49 different bills at 22 addresses. “If DEP were able to aggregate charges and send comprehensive bills, DEP could more effectively monitor outstanding charges and hospitals could better grasp the magnitude of those outstanding charges,” the audit points out.

DEP spokesperson Mercedes Padilla noted that the audit found that in general, the DEP is properly billing hospitals.

“The comptroller did recommend a few areas for improvement which are largely consistent with the extensive improvements we have made in our overall billing and collection system,” she said.

Thompson recommended the DEP explore alternate means of collection, including pursuing collection from management and parent corporations. Also suggested was an investigation the feasibility of aggregating private hospitals’ water and sewer charges and sending comprehensive bills, and the creation of a list of all private hospital accounts by surveying hospital properties and identifying all meters and their associates accounts.

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