RITZVILLE — The Washington Auditor’s Office is investigating allegations of financial irregularities at East Adams Rural Healthcare in Ritzville. 

“We have an active investigation of the hospital district,” Adam Wilson, WSAO assistant director of communications, wrote in response to an email from the Columbia Basin Herald. “We are in the final stages of writing the report and expect to publish it in September. However, we are aware of new issues in the district that may require further investigation.”  

Wilson said the auditor’s office couldn’t comment further due to the ongoing investigation. 

Hospital Chief Executive Officer Corey Fedie said the investigation is targeted at financial irregularities in the EARH Accounts Receivable Department. Fedie did not disclose the extent of the issue, but said a large amount of money is missing. 

“It’s a significant sum,” he said. “We found it and self-reported it to the state, and we’re working very closely with (the auditor’s office).” 

The financial issues were not a contributing factor for recent layoffs at the hospital, he said. About 12 people lost their jobs. Fedie said cuts were necessary to improve the hospital’s bottom line. 

“We’re one of the more distressed hospitals in the state,” he said. 

The cuts helped stabilize the hospital’s finances, which face strain not only because of the issues associated with the investigation, but also with Medicare and Medicaid reimbursement rates. 

“Our outlook looks balanced at the moment,” Fedie said.  

What happens next is still to be determined. 

“The future is uncertain. It depends on reimbursement and operations,” he said. “We definitely need some payor help.”  

More than half of EARH patients use Medicare or Medicaid insurance, he said, and in many cases reimbursement of publicly funded insurance programs is less than the cost of providing the care. Ritzville hospital is a Critical Access facility, which has higher reimbursement rates. . Still, revenues lagged behind expenses, Fedie said, which required the hospital to make staffing cuts. 

“You’ve got to control expenses if you’re not being paid,” he said. 

Hospital care is changing, with more medical procedures done on an outpatient basis, Fedie said, and EARH is unable to provide many of those procedures. That limits the hospital’s income, he said. 

Nevertheless, the Ritzville hospital is still open and taking care of its patients, he said.  

“We’re doing everything we can for survival,” he said, and that requires difficult decisions. “We just have to restructure.”