NYS Comptroller: Stony Brook University Hospital Failed to Monitor Transcription Service Properly

From a press release by the NYS Comptroller:

Stony Brook University Hospital’s Health Information Management Department repeatedly failed to comply with state guidelines and university policies related to contracting, vendor monitoring, and hiring or promotions, possibly costing taxpayers nearly $1 million, according to an audit released today by New York State Comptroller Thomas P. DiNapoli.

[…]

“We also found improper hiring and pay raises for staff and poor contractor monitoring that could put patient privacy at risk. Stony Brook managers need to follow state guidelines and safeguards to protect the community and stop wasting public funds.”

With respect to the monitoring of medical record transcriptions, the audit reports (p. 8) that

We found the Department has not consistently monitored outsourcing of its transcription and editing services and, in fact, there is no assurance that they have monitored compliance since October 2008. In addition, the Hospital does not have proper controls in place to ensure vendor compliance with the “no off-shore outsourcing” clause and has no assurance of the integrity of the vendor information that is reported.

In May 2006, the Hospital contracted with Focus Informatics to provide transcription and editing services. In July 2007, the Hospital became aware of a compliance breach based on evidence supplied by eScription, the vendor the Hospital uses to monitor compliance and, as of November 2008, terminated the contract based on Focus Informatics’ repeated failure to comply with the “no off-shore outsourcing” clause. Hospital officials re-bid the contract, and in October 2008 awarded it to a new vendor: Deventure-Transcend (Transcend). When we inquired about the continuity of compliance monitoring with the new vendor, the Director initially told us the Department did not monitor Transcend after they were awarded the contract. A short time later, however, the Director retracted this statement, saying instead that she requested compliance monitoring of Transcend at the start of the contract, but discontinued monitoring when Transcend was purchased by the same company (Nuance) that owns eScription, which occurred in March 2012. We note, however, that we were provided with no evidence to support the Department’s compliance monitoring of Transcend after they were awarded the contract.

In response to our preliminary report, Hospital officials stated that, despite the lapse in compliance monitoring, the Department reported they had not found any quality or timing issues that would have led them to suspect work was being performed off-shore. In addition, they informed us that since April 2013 the Department has resumed its compliance monitoring using Nuance. Hospital officials, however, did not supply us with any documentation to support this, and, in fact, the Director provided information that was contradictory. When we asked the Director about compliance monitoring, she informed us she does not have the capability to monitor whether transcription services are outsourced overseas, nor was she able to provide documentation supporting the last time these services had been properly monitored. Further, we cannot attest to the effectiveness and objectivity of the compliance monitoring process that was reinstituted in April 2013, since the compliance information is provided through Nuance, the parent company of Transcend, the transcription and editing services vendor. In essence, the Department relied on the vendor to monitor its own contract compliance.

The inability of Department officials to properly monitor the location of the transcription services and verify that only individuals within the United States are accessing medical records poses a risk to patient privacy and compromises the Hospital’s ability to comply with federal and State patient information privacy regulations.

It’s not only HHS that’s watching security safeguards for patient data. Entities in New York would be wise to pay attention to this audit.

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