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Haley VA takes 'emergency' steps to close deficit

TAMPA — The James A. Haley VA Medical Center is taking "emergency measures" to close a $17 million budget deficit before the fiscal year ends Sept. 30, documents obtained by the St. Petersburg Times show.

That comes on top of significant budget cuts at the Tampa facility since March, when the deficit was about $47.5 million.

Documents show Haley, one of the nation's busiest veterans hospitals, has reduced staffing through attrition by 111 positions, limited overtime and travel, deferred maintenance and stopped veteran referrals to outside medical providers except in emergencies.

Cuts include $1.5 million from lab services, $130,000 from mental health programs, $92,000 in education funds and $48,000 from a program to combat Staphylococcus aureus, or MRSA, a difficult to treat bacterial infection.

Officials at Haley, whose director is Kathleen Fogarty, would not confirm the cuts or even acknowledge a deficit. In fact, a Haley spokeswoman denied earlier this month that it had run a deficit in recent years, a fact contradicted by the facility's own budget records.

Without acknowledging a budget shortfall, Department of Veterans Affairs officials now say Haley will be getting more money.

The VA's regional office, called the Veterans Integrated Service Network, or VISN, "will provide supplemental funding to ensure patient care is uninterrupted," Mary Kay Hollingsworth, a VISN spokeswoman, said Tuesday.

But that statement appears to conflict with a VISN directive earlier this year that it would cap any deficit bailout at the end of the fiscal year at $14.8 million, budget records show.

That would leave Haley having to cut $17 million to balance its budget by the time the fiscal year closes in less than seven weeks.

Hollingsworth did not respond to a question about why Haley has embarked on hospital-wide cuts as detailed in records if supplemental funding is on the way.

In recent years, the VISN has fully covered Haley's deficits. The hospital has run deficits for at least three years, including a shortfall of about $40 million in 2009, records show.

While not acknowledging a deficit, Hollingsworth pointed to "fiscal challenges" that have included 90 ongoing construction projects. And due to space restrictions on the Haley campus, the hospital pays $12 million annually to lease property elsewhere, she said.

"As an organization that focuses on continuous improvement, Tampa strives to identify opportunities for increased efficiency while maintaining or improving the excellent care provided at Tampa's medical facilities," Haley spokeswoman Carolyn Clark said in a statement.

Haley treats about 87,000 patients a year, making it the ninth-busiest VA hospital in the nation. It employs about 4,200 people with a budget of up to $670 million. The facility's polytrauma unit is considered one of the premier programs of its type in the VA. It's also the busiest.

Documents do not reflect any specific cuts to polytrauma care. Clark did not respond when asked if the unit had experienced any funding cuts.

Haley leaders have noted in internal discussions that the facility cannot end the fiscal year in a deficit because that would violate the federal Anti-Deficiency Act, documents show.

The act says "government officials may not make payments or commit the (U.S. government) to make payments at some future time for goods or services unless there is enough money in the 'bank' to cover the cost in full," the General Accounting Office says.

Penalties include termination for any official who knowingly violates the act.

Officials at Bay Pines VA Medical Center in Pinellas County said they are not operating at a deficit.

In a time of severe budget challenges, Haley budget documents show that officials nonetheless paid their business department employees $1 million in bonuses from 2007 to 2010, when the bonus program was ended. A majority of those bonuses were awarded for meeting goals in collecting money from veterans and insurers.

In fiscal 2009, for example, 175 business employees shared $553,000 in bonuses, Haley has acknowledged.

At the same time, Haley was paying significant refunds to veterans. Haley said earlier this month that it paid $1.5 million in refunds in 2010, up from $426,000 in 2007. But officials denied hospital collections were flawed or that mistakes in billing inflated the bonuses.

Last week, Haley provided new figures to the Times "to ensure accuracy and transparency" showing 2010 refunds were actually $3 million, double what it had previously noted.

The new figure includes refunds to third-party insurers.

William R. Levesque can be reached at levesque@sptimes.com or (813) 226-3432.

Haley VA takes 'emergency' steps to close deficit 08/16/11 [Last modified: Wednesday, August 17, 2011 10:50am]

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