FAIRMONT — Alecto Healthcare Services Inc., owner of Fairmont Regional Medical Center, received a reported $3.5 million in funds through the Coronavirus Aid, Relief and Economic Security Act.
According to a statement from Alecto, the Irvine, California-based firmed received the CARES Act funds for both FRMC and Wheeling’s Ohio Valley Medical Center, which the company closed in September 2019, the same week it laid off 25 employees at FRMC.
“FRMC and OVMC did not request any funding under the CARES Act,” stated Michael Garrison, attorney for Alecto. “The Department of Health & Human Services automatically sent grants to healthcare providers across the country. FRMC and OVMC received such grants and are working with HHS to address the grants they received and return these grants to the federal government.”
The U.S. Department of Health and Human Services began distributing the funds April 10 from a larger allocation of $100 billion that was earmarked as “relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response.”
Information on the Department of Health and Human Services website says “$50 billion of the Provider Relief Fund is allocated for general distribution to Medicare facilities and providers impacted by COVID-19, based on eligible providers’ 2018 net patient revenue.”
The West Virginia Attorney General is currently conducting an investigation into Alecto’s business practices, which began because of complaints issued by employees of Fairmont Regional. Attorney General Patrick Morrisey said he is continuing to work with the Service Employees International Union to recoup unpaid 401(k) retirement fund matches that Alecto was contractually bound to pay.
“To the extent that Alecto has received these federal funds for hospitals that it announced plans to shut down, we call upon them to return the money,” stated Morrisey in a prepared statement.
“They need to pay the workers’ 401(k) match,” said Joyce Gibson, regional director for SEIU 1199. “They have the money and they still owe them[the employees].”
According to a report in the trade journal Healthcare Finance, “All facilities and providers that received Medicare fee-for-service reimbursements in 2019 are eligible for the distribution.”
“For example, a community hospital that billed Medicare fee-for-service $121 million in 2019 would divide $121 million by $484 million, and then multiply that amount by $30 million, for a result of $7,500,000.”
The trade journal reported that providers — including hospitals — that are no longer in business in 2020 are eligible to receive funds “so long as they provided diagnoses, testing or care for individuals with possible or actual cases of COVID-19. The Department of Health and Human Services broadly views every patient as a possible case of COVID-19,” HHS said.
Healthcare Finance also reported that UnitedHealth Group conducted “rapid payment” of the CMS CARES Act funding using Automated Clearing House account information on file for each hospital. The magazine also reported that CARES Act funds do not have to be repaid.
On April 8, Gibson and Morrisey announced that Alecto agreed to pay $844,342.49 for previously unpaid vacation time and bonus days due to former employees. Morrisey said it was his hope that that settlement would also benefit former employees who are not members of the union who had not been paid prior.
Morrisey continues to work with Gibson to recover the unpaid 401(k) funds. No estimated dollar amount was given for the unpaid retirement funds due employees.
FRMC closed March 19, a month after CEO Bob Adcock handed the hospital’s 528 employees letters stating it was shutting down in 60 days.