A community hospital counter-sued its former management company for gross mismanagement. The Hospital lost critically significant revenue as a result of the former management company’s failure to provide management services and leadership consistent with industry standards, and the mismanagement of the Hospital’s workforce and revenue cycle operations. HMP was engaged to document the management company’s gross negligence and to determine the damages suffered by the hospital as a direct result of the management company’s actions.
Issues
- Former management company failed to adjust operations to accommodate the Hospital’s changed circumstances after suffering significant damage during Hurricane Katrina
- The Hospital suffered critical loss of revenue due to the former management company’s mismanagement over subsequent years
Approach
- HMP prepared detailed benchmarking analysis using HMP Metrics™, comparing the Hospital’s performance across a range of metrics to peer groups in the state and nationally across a 10-year period, including those hospitals also impacted by Hurricane Katrina
- Conducted a detailed analysis of receivables written off due to revenue cycle failures
- Quantified effects of damage suffered by unimplemented workforce productivity opportunities
- Reviewed all reports and documentation produced by the former management company’s consulting arm
Results
- Documented several instances of inaction, mismanagement and miscommunication by the management company or its employees to the Hospital’s board of directors
- Demonstrated that deterioration of the Hospital’s financial and operational performance was the result of mismanagement and quantified the damages suffered by the Hospital
- Hospital was awarded a seven-figure settlement by an independent arbitrator