HARRISBURG, PA — A state audit found that Devereux Children’s Behavioral Health Center in Chester County did not qualify for certain tobacco settlement payments after reporting no eligible high-cost claims tied to uncompensated care.
What This Means for You
- The facility will not receive payments under one key reimbursement method
- State audits are used to verify how taxpayer-backed funds are distributed
- Hospitals must document uncompensated care to qualify for funding
Auditor General Timothy L. DeFoor announced the release of the audit, which reviewed whether the behavioral health center qualified for payments from Pennsylvania’s tobacco settlement fund, a program that reimburses hospitals for treating uninsured patients.
“Our audits ensure hospitals have documentation to support the receipt of tobacco settlement funds before receiving reimbursement for uncompensated care,” DeFoor said.
Audit Findings
According to the audit, Devereux did not report any potentially eligible “extraordinary expense” claims for the fiscal year ending June 30, 2025, meaning it does not qualify for reimbursement under that method for the 2027 payment year.
Extraordinary expense claims refer to high-cost cases involving uninsured patients where treatment costs significantly exceed typical inpatient expenses.
The audit also reviewed inpatient and Medical Assistance days reported by the facility and found the submitted figures matched supporting documentation, with no discrepancies identified.
How the Program Works
Pennsylvania’s tobacco settlement payments stem from the 1998 Tobacco Master Settlement Agreement, which resolved lawsuits against tobacco companies over smoking-related healthcare costs.
Under Pennsylvania law, a portion of those funds is allocated to hospitals to offset uncompensated care. Facilities may qualify through two methods: an extraordinary expense approach or an uncompensated care formula based on broader financial data.
Next Steps
The Department of Human Services will use verified data from the audit, along with statewide reporting, to determine whether the facility qualifies for payments under any remaining eligibility method and to calculate any potential reimbursement.
Facilities may also submit additional claims for review if they meet program criteria before the state’s deadline.
The full audit report is available through the Auditor General’s website at www.PaAuditor.gov/audit-reports.
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