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St. Charles Health System Seeks $2 Million From Employees

Central Oregon provider tries to recoup overpaid wages as employees push for details.
St. Charles Health System in Bend. | COURTESY OF ST. CHARLES HEALTH SYSTEM
August 12, 2022

When Megan Bovi ended her Wednesday shift at St. Charles Medical Center in Bend, her boss handed her a post-it note with a figure: $2,964.50.

That’s how much her employer estimated Bovi, a registered nurse for 15 years at the hospital, was overpaid during a couple of two-week pay periods in December and January. 

Bovi is among 2,358 employees at St. Charles Health System who were overpaid, according to figures the nonprofit released Friday. But controversy over the way it is demanding repayment is adding to a growing list of challenges at the financially strapped health care company.

The news surprised Bovi, who also received paperwork from the hospital with different options for how she could repay the money back through payroll deductions. The information she didn’t get: How her employer calculated the dollar amount.

“I expressed my extreme displeasure that I felt so absolutely disrespected and couldn’t believe they could roll out something so unprofessionally and without tact,” Bovi told The Lund Report. “Because there's no way that I would sign a form and just take their word for it.”

The overpayments happened because of a ransomware attack that hit the company that hosts the health care system’s timekeeping and scheduling data, according to St. Charles. Lisa Goodman, a spokesperson, said the overpayments total nearly $2 million, adding that most of the employees – 1,784 – owe $1,000 or less. The system runs hospitals in Bend, Redmond, Prineville and Madras and has numerous clinics in the region.

The attack prevented St. Charles from accessing timecare data from Nov. 28, 2021 through Jan. 22, Goodman said.Instead, the company had employees fill out attestation forms for the shifts they worked. In the months since, St. Charles system has been reconciling the payments with timecard entries and attestation forms. Goodman said the overpayments happened in different ways, such as timecard entries that were different from the hours reported on attestations, or employees overstating hours.Goodman said part of the system’s work is making whole employees who were underpaid too.

“We’re now at the point where we need to recoup the $2 million that was overpaid,” Goodman said. “While we recognize this is an inconvenience for our employees, we’ve communicated from the beginning that this is a step we’d eventually need to take.”

The company’s efforts to collect the money come amid a period of turmoil for St. Charles Health System. The company has made layoffs, faces financial challenges and is going through a transition in executive leadership. As Oregon Public Broadcasting reported, the system also announced internally – but not to the public or state regulators initially – an acute staff shortage and “crisis standards of care.” System officials backed off that declaration after the state told them it was unlawful.

The state has since issued a rule to prevent similar behavior, as The Lund Report first reported on Aug. 4.

The system has held informational town halls for employees and sent out notices to workers, Goodman said. She defended the delay in collecting the money, saying the manual data entry required to reconcile records and reimburse underpaid workers took time.

Union Pushes Bac

The Oregon Nurses Association, which represents Bovi and 1,000 other nurses in St. Charles Health System, sent out a note to its members with strong advice: Don’t sign anything.

Scott Palmer, a spokesperson for the union, said nurses are extremely frustrated with the situation.

The nurses union on Friday sent a cease-and-desist letter to Dr. Steve Gordon, St. Charles Health System’s interim CEO and president.

Thomas Doyle, general counsel for the ONA, gave St. Charles a deadline: rescind the letters to employees about the overpayments by 9 a.m. Monday. Otherwise, the nurses union will forward the letter and other documents to the Oregon Bureau of Labor and Industries and file a complaint.

The letter said the nurses union was not consulted about the process and warned that the system’s payroll deductions run afoul of the law.

“BOLI is very clear on this issue – paycheck deductions going to the employer to pay for an alleged ‘overpayment’ or loan are not for the employee’s benefit and are therefore unlawful,” the letter said. “We are asking that the employer rescind this letter immediately and void any payroll deduction authorizations that were obtained from our members.”

The union said it’s willing to go to court over the issue.

St. Charles’ statement however, had a different take. 

“We strongly believe that we’ve complied with the law and with our contractual obligations in every respect as we’ve paid our employees and as we now look at how to make payroll corrections that are needed because of the ransomware attack.”

Some employees have already signed forms and made payment plans, Goodman said.

Employees Seek Answers 

Bovi, the registered nurse, said she kept track of her hours with her phone during the system’s outage. She said the lack of documentation of how the system calculated the overpayment was particularly troubling.The appropriate process, she said, would be for the employee to meet with human resources and an accountant and review the records and calculations.

“They literally just blindsided us and issued these overpayment notices without any sort of documentation or evidence,” Bovi said.

In Bovi’s case, the overpayments purportedly happened in a couple of two-week pay periods. Bovi said she normally would notice extra payments of nearly $3,000. However, during that time period, she had already picked up extra shifts and hours and expected  higher-than-normal paychecks.

Daria Boquist, a certified nursing assistant at the Bend hospital, said she was notified that she owes $700.

“She said, ‘Your name is on the list of people that owe money,’” Boquist said, recounting when she found out from her supervisor.

Boquist said she’s been unable to get an explanation of  how the hospital calculated that figure.

Boquist said she intends to notify BOLI about the issue if it’s not resolved. 

“I’m not the only one that’s been hit by this,” Boquist said. “I’m at a dead end here.”

For employees,the issue comes at a time when morale is already low.

“We do our very best to take care of patients and provide the best patient care possible,” Bovi said. “This was just one more way of showing how they do not value us and they do not respect us and it’s quite a disappointment.”

You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.