A Texas for-profit hospital purchased another hospital in a rural community of Texas based on representations from the prior owner, including hospital census data, number of admitted patients and their method of payment. In addition, the prior owner represented that the rural hospital had implemented Electronic Health Record (“EHR”) technology resulting in the receipt of incentive payments from the federal government.
However, the hospital was unable to confirm these representations following its purchase. After the purchase, the number of patient admissions and their method of payment were quite different than originally represented and the EHR technology was nonexistent.
As a result, the hospital has suffered damages of more than a million dollars in the form of increased bad debt, out-of-pocket expenses relating to the implementation of EHR technology, and the loss of federal government incentive payments from not being able to attest to having EHR technology.
Accumyn performed an analysis of the hospital’s accounting records for the post-acquisition periods, including number of admitted patients, payor mix, and bad debt expenses and compared it to the historical and projected financial statements provided by the prior owner. Accumyn also analyzed the additional out-of-pocket costs from the hospital’s fixed asset schedules to determine the costs of implementing EHR technology. Additional work performed included the calculation of available federal government incentive payments from attesting to EHR technology.
Scott Bayley has assisted counsel by providing an expert report and will provide testimony at the upcoming trial scheduled in the fall.