Media Release

For Immediate Release
Date: August 31, 2004
Contact: Robert Marshall, PhD. 222-1017

State Adjudicator Upholds Department of Health’s Denial of $2.23 Million to Mt. St. Francis Health Center

On August 26, 2004, the State Office of Administrative Hearings upheld a previous denial by the RI Department of Health (HEALTH) of unauthorized renovation expenses related to Mount St. Francis Health Center in Woonsocket, RI. On January 13, 2004, HEALTH officials denied the request by Mt. St. Francis for retroactive approval of renovation costs. Operators of the facility requested that renovation costs in excess of $2 million be approved under the terms of a 1992 Certificate of Need decision relating to new construction and renovations to the facility. Approval would trigger retroactive payments of costs plus interest by the State through the Medicaid program. The decision denying the administrative appeal identified Mr. Antonio L. Giordano as general partner for Mt. St. Francis Associates, owner of the facility.

The recent ruling focused on the proposal by Mt. St. Francis to shift the bulk of approved expenditures from new construction to renovation expenses. Certificate of Need is a regulatory process, administered by HEALTH, which reviews proposals for capital expenditures relating to regulated health care facilities in Rhode Island. The original approval in 1992 stipulated a limit of $688,291 in renovation costs and $2,670,800 for construction of a new 62-bed addition at Mt. St. Francis. In 2003 the applicant requested approval for $2,253,617 it claims were spent on renovations. The applicant admitted that it had not constructed any new beds at the facility.

"The Certificate of Need process helps us avoid unproductive investment in health care facilities and protects health payers, including the state Medicaid program, from unauthorized costs," said Dr. Patricia A. Nolan, Director of the RI Department of Health. "The state’s decision, in this case, strengthens the regulatory process against after-the-fact changes in projects — especially changes that have serious consequences for taxpayers and other payers."

The state hearing officer upheld HEALTH’s denial saying, "The facility has overstepped its bounds and not followed the conditions of the 1992 certificate of need approval."