Federal audit faults Hometown Health management

A federal audit notes substantial financial problems at Hometown Health.

A federal audit has faulted Hometown Health’s current management operations as contributing to its near collapse as a viable health care provider in the community.

The audit did not call for a management shake-up, but directed Hometown to submit a corrective action plan to the federal Department of Health and Human Services.

Hometown officials said they are following recommendations in the audit to put the facility on more solid financial footing, including the integration of its pediatrics department into its family practice department. The integration has resulted in the resignation or firing of three physicians and one nurse practitioner.

The audit by the federal Bureau of Primary Health Care, conducted in July, found that Hometown Health “does not appear to be financially viable as currently organized, structured and operated.” It also said Hometown “lacks community support, the basic operating presumption for a successful health center.”

The audit found Hometown:

* Defaulted on a federally guaranteed facility loan;

* Accumulated operating losses of $2 million between 2003 and 2007;

* Had a $900,000 deficit as of September;

* Had a cash-flow “crisis” that has contributed to its inability to meet payroll, keep a building loan current and pay vendors for medical supplies;

* Saw its expenses grow 228 percent whiles its revenues grew but 95 percent between 2003 and 2006;

* Saw its administrative costs increase by 83 percent between 2002 and 2006, exceeding national and New York state norms by nearly 50 percent.

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