Rural hospitals all over the country are struggling, since rural residents tend to be older, poorer, and need more medical care, straining hospital resources. They're more likely to depend on Medicaid and Medicare, and Medicaid isn't very profitable for hospitals — especially in states like Missouri, which did not expand Medicaid under the Patient Protection and Affordable Care Act.
The audit is already seeing results. One review uncovered a $90 million billing scheme at Putnam County Memorial Hospital. The five-person hospital board had agreed to hire independent contractor Hospital Partners for the hospital's day-to-day operations but didn't run the contract by legal counsel. There were no stipulations in the contract to limit the salary of Hospital Partners' CEO, who has since increased his own salary from $160,000 to $200,000, Liss reports. Auditors found out-of-state employees on the payroll who were supposedly working for the hospital's lab, and "the vast majority of the laboratory’s billings are for out-of-state lab work for patients who never went to Putnam for care," Liss reports. State and federal officials have been notified about the audit's findings at Putnam.