When COVID-19 spread through Connecticut in the spring of 2020, Griffin Health, a small, Derby-based hospital, became the state’s primary contractor for testing residents of nursing homes, which were being devastated by the fast-moving virus.
The hospital — which, like some of the state’s other independent hospitals, had been struggling financially for years when the pandemic began — eventually earned more than $51 million in COVID testing fees, the majority of which came from a $137.6 million contract with the state Department of Public Health, a CT Mirror investigation has found.
The state contracts with Griffin were worth far more than the contracts with any other hospital, documents show — and, according to data provided by the Department of Public Health, Griffin was paid more per test than other hospitals.
That $51 million was not insignificant to Griffin — it amounts to about 25% of Griffin’s total reported revenues in 2019.
But why Griffin was paid more per test is still unclear. While officials did provide general categories of expenses incurred by the hospital, no dollar figures were attached to their explanations despite repeated attempts to get detailed financial information from the Department of Public Health and Griffin Health.
Several laboratories and hospitals also initially received contracts to administer COVID tests at nursing homes — from the state’s largest hospital chains, Yale New Haven Health and Hartford HealthCare, to smaller private laboratories, such as SEMA4 in Branford — but many of them had stopped participating in the program by early 2021, and all of the other hospitals combined earned less than Griffin.
DPH officials said Griffin Health received more money than the other hospitals because it picked up the slack, eventually providing testing at more than 60% of the state’s 213 long-term care facilities until June 30, when all of the other contracts expired.
“Griffin Hospital provided on-site testing for nursing homes throughout the state at a larger scale than any other hospital or Care Partner,” DPH spokesman Christopher Boyle said. “Griffin Hospital’s administrative rates were not significantly higher than any other hospital, nor were Griffin’s rates the highest.”
But according to contracts obtained by the CT Mirror under the Freedom of Information Act, Griffin Health was paid twice as much in collection fees as any other hospital that participated in the nursing home testing program.
The notion that DPH or the administration was trying to bail out a struggling hospital has no basis in fact.”
From the very beginning of the nursing home testing in June 2020, Griffin Health has been paid $54.93 per test in collection fees, which are separate from the payments laboratories receive for processing the COVID tests. Collection fees are meant to cover expenses incurred during the administration of tests, such as staffing, transportation and the purchase of swabs and other testing supplies.
Except for a two-month period between June and August of 2020 when Griffin’s collection fee dropped to $37.93, the hospital’s payment was consistently $54.93 per test. None of the other five hospitals that signed contracts with DPH received more than $27 in collection fees, and some received as little as $20 per test, records show.
Beyond broadly referencing Griffin’s responsibilities, state officials would not specifically quantify the expenses that led to such a variance in collection fees.
In response to questions, Boyle said Griffin’s negotiated rate differed from other hospitals because it offered a different scope of services and that collection costs varied depending on operations.
“Griffin hired a team of over 100 staff to operationalize testing in nursing homes. The teams worked with the nursing home to develop rosters, swab residents and deliver specimens to the labs daily. Griffin worked with nursing homes in every county in the state,” Boyle added.
Neither state nor Griffin officials elaborated or provided detailed financial accounting of their testing expenses.
The state was also slow to disclose the contracts with health providers that carried out the testing. The Office of the State Comptroller, which independently arranged with Griffin and others to provide COVID testing for state employees and prison inmates, for months refused to release the collection rates for different providers, claiming they were “trade secrets.” The comptroller’s office finally disclosed the rates in early August; about a month later, the Department of Public Health complied with a CT Mirror FOI request for the documents.
That reluctance to share details of the contracts, or to explain why Griffin Health received higher fees for collecting COVID tests, raised questions about whether the state favored Griffin Health in disbursing federal funds. But state officials and Griffin Health President Patrick Charmel said the hospital didn’t receive special treatment.
“The state is not reluctant to share details of any contracts; the FOI process takes time — especially during a pandemic — and every request is processed in the order that it is received,” Boyle said, adding Griffin did not receive any special treatment.
“Griffin Health continued to step forward at a critical time during the pandemic in the absence of others to conduct the COVID testing at nursing homes. All major hospitals were asked to participate in the nursing home testing program. Many participated in the beginning of the program in good faith but did not continue,” Boyle said. “Griffin continued to support the program and was the safety net for nursing homes who needed a care partner.”
The DPH’s contracts with its 11 “care partners” — a combination of hospitals and laboratories that did nursing home testing — were no-bid, awarded under the governor’s emergency powers.
Those contracts show the extent of Griffin Health’s revenue from testing.
Overall, DPH distributed more than $202 million in federal funds in about 13 months on COVID testing for nursing home residents and staff. Griffin Health received about two-thirds of that funding, state records show.
The other hospitals that performed nursing home testing were Hartford HealthCare, Stamford Hospital, Eastern Connecticut Health Network, Waterbury Hospital and Yale New Haven Health. Hartford HealthCare and Stamford were paid $27 per specimen in collection fees. The three others were paid $20 per specimen, records show.
Former acting DPH Commissioner Deidre Gifford declined a request to be interviewed for this story. Instead, the department answered a series of submitted questions and produced multiple analyses of what the contracts were worth.
Boyle said DPH contracted with the 11 “care partners” to conduct the nursing home testing and that Griffin’s contract, capped at $137.6 million, was the largest. Boyle said that as other partners dropped out of the program, Griffin took over their testing responsibilities and kept the key program going.
The contracts were awarded under a plan to test every nursing home resident in Connecticut — both as a way to learn how many people had the virus and to slow its spread by making it easier for providers to isolate asymptomatic residents.
Connecticut was one of the first states in the nation to use federal COVID funds for mass nursing home testing.
Part of the contract called for getting test results within 24 hours, which was why each hospital needed a laboratory partner to process its tests quickly at a time when many people were waiting a week or more for test results.
Griffin contracted with Jackson Laboratories to run the tests on all of the samples they were collecting. Boyle said Griffin turned over about $80 million of the $137.6 million DPH contract to Jackson Laboratories.
Other hospitals also had to “pass through” payments to laboratories. For example, Hartford HealthCare was paid $127 per COVID test, according to its contract, but $100 of that was passed through to its lab partner Quest Diagnostics.
In addition, Boyle said, Griffin Health’s contract required it to bill third-party payers such as Medicare and turn that money back to the state. Boyle said the hospital has remitted about $19 million to the state in Medicare payments. Accounting for that and the $80 million to Jackson Labs, Griffin Health took in roughly $39 million in revenue from the $137 million DPH contract.
The $39 million far outstrips what other hospitals earned through the DPH contracts.
For example, Stamford Hospital was paid about $7.8 million, Yale New Haven Health about $5.38 million and Hartford HealthCare about $4.4 million since June of 2020, according to DPH contracts.
Officials with Yale New Haven Health and Stamford Hospital declined to comment for this story. Hartford HealthCare’s Chief Clinical Integration Officer Dr. James Cardon, who has overseen the hospitals testing and vaccine programs, said the hospital has done whatever the state has asked of it.
“Hartford HealthCare has been proud to help lead the state throughout the pandemic, wherever we are needed: be it testing, vaccination, education or access to care,” Cardon said. “When it comes to COVID testing, Hartford HealthCare has worked hard to be a lower cost provider with the highest quality of care — averaging $27 a test in [collection] fees.”
Charmel said Griffin made more money than the other hospitals in the program because it stepped up when the state needed someone to take over nursing home testing as other care partners dropped out.
“We only agreed to provide testing to additional homes outside of our immediate area when others said no or dropped out after initially participating, leaving a number of homes without a designated Care Partner,” Charmel said. “As for others who may have told you that they wanted to do more nursing home testing but didn’t get it, you may want to look at their performance in the program before assigning credibility to their claim. We were often asked to step in after others were reluctant to take more on or dropped out.”
How the DPH contract grew from $7.8 million to $137 million
When Griffin started testing in nursing homes, it was assigned 12 homes in the Naugatuck Valley area, but that quickly expanded to 84 nursing homes across the state, from Greenwich to West Haven — far outside the area the hospital normally serves.
Griffin’s initial contract with DPH, for $7.8 million, ran from June through August 2020, state records show. That contract paid Griffin almost as much in those three months as other hospitals were paid over the past 15 months.
As the contracts were amended, the number of nursing homes that Griffin was assigned to test grew as other hospitals dropped out. By the spring of 2021, Griffin Health was testing at more than 125 nursing homes out of the 213 located in the state. Its latest contract, which ran through July 1, called for Griffin to be paid “no more than $137.6 million.”
“Griffin’s commitment to caring for the health and well-being of our community compelled us to take a leading role in the state’s COVID-19 testing program to protect the staff and residents of the state’s skilled nursing facilities and continuing care communities which experienced large numbers of COVID-19 cases and deaths and therefore needed a capable and reliable testing partner that they could trust to help them stem the tide,” Charmel said.
Griffin has now administered more than 1 million COVID tests in nursing homes — far more than any other provider, Boyle said.
Without Griffin’s efforts, he said, DPH would have had difficulty continuing the program.
A second contract
Unraveling to whom and how much the state paid for COVID testing is difficult not just because of the lack of transparency but because several state agencies handed out contracts to a wide variety of laboratories and hospitals, and most of them were awarded without bidding under the emergency powers granted to Gov. Ned Lamont during the public health crisis.
The Department of Public Health was not the only agency to contract for COVID testing. The state Comptroller’s office awarded 12 contracts for COVID testing, much of it for testing state employees and people incarcerated in the state’s prisons — ranging from a $45,000 contract with Lawrence + Memorial Hospital in New London to a $79.8 million contract with Quest Diagnostics, which processed most of the test specimens.
In August, the state Comptroller’s Office reversed its position that collection rates were trade secrets and made public its COVID testing contracts.
Those contracts show that Griffin also brought in more money than any other hospital that contracted with the state Comptroller’s office.
Griffin was paid $12.3 million through that contract. Hartford HealthCare received $3.1 million, and Yale New Haven Hospital received $1.25 million, according to the Comptroller’s office.
Unlike the Comptroller’s contracts, DPH negotiated its own testing contracts for nursing homes through the agency’s Contracts and General Management section. The contracts were signed by Deputy Commissioner Heather Aaron, who at that time was heavily involved in DPH’s response to the spiraling COVID crisis in nursing homes.
The initial contracts were reviewed by the Attorney General’s office, but several of the amendments were not.
Unlike DPH, the Comptroller’s office paid the laboratories directly, and there were no “pass through” payments made to hospitals first, which means Griffin didn’t have to pass any of the $12.3 million to a lab.
An increase in revenue for Griffin Health
Between the $39 million in revenue from the DPH contract and the $12.3 million from the Comptroller, Griffin Health received more than $51 million in COVID funds — a sum that roughly equal to 25% of Griffin’s total reported revenues of $203.5 million in 2019.
The nonprofit hospital’s profit that year, according to its Oct. 13, 2020 public filing with the Internal Revenue Service, was $9 million, a decrease of $6.4 million from the previous year.
Charmel said it would be a mistake to assume Griffin made a huge profit from the state contracts because it also incurred numerous costs during the testing program.
Charmel said Griffin had to hire staff to transport specimen tests to Jackson Laboratories to expedite the process. The hospital also spent a significant amount of money purchasing testing supplies — particularly at the beginning of the pandemic when supplies were scarce and overpriced — so it could provide the lab with those materials to speed up the process, he said.
Charmel said he also had to hire additional staff because Griffin was one of the few hospitals that agreed to do testing at nursing homes in other parts of the state.
“The $39,000,000 is revenue, not profit, and therefore not comparable to the $9,000,000 reported in our last 990,” Charmel said, referring to the hospital’s contract with DPH, in a written response to questions from the CT Mirror. Charmel did not respond to a follow-up email asking how much profit Griffin made from COVID testing.
“It is not a ‘windfall’ and does not account for the tremendous expenses that we incurred to operate the program, including hiring and assigning more than 200 caregivers (creating opportunity when the rest of the economy was in lockdown), purchasing millions of dollars in equipment and supplies to collect specimens and process over 900,000 COVID-19 tests, and building an infrastructure to support transporting tens of thousands of samples weekly from nursing homes throughout the state to the Jackson Laboratories for testing,” he added.
Griffin is also being paid an unspecified amount of money to run the state’s mobile vaccination program. The “yellow van program” is the centerpiece of a $33 million outreach program the state launched in late March using federal funds.
State records show that the hospital has been paid more than $7 million since April for “vaccine-related work.” DPH did not respond to questions about whether those payments were related to the mobile vaccination program or for something else. DPH has not responded to a request for a copy of Griffin’s mobile clinic contract.
The mobile vaccination program is designed to reach unvaccinated residents who live in areas identified by the Centers for Disease Control and Prevention as “socially vulnerable.” The state has identified 50 ZIP codes, most in cities and with minority populations, that fall under the social vulnerability index.
As one of the few independent hospitals remaining in the state, Griffin was struggling financially long before COVID-19 hit. The virus only exacerbated these struggles.
Not only did typical funding sources such as elective surgeries dry up in the spring of 2020, the hospital was forced to spend money to buy equipment, such as ventilators, and to retrofit routine hospital rooms into negative-pressure rooms to handle the growing number of COVID patients.
Griffin is located in Derby on the cusp of Fairfield County — a blue-collar community that bears little resemblance to its wealthy Gold Coast neighbors but close enough to get hit hard by the virus as it spread up the state from New York in the spring of 2020.
The pandemic was traumatic for the hospital. It took an emotional and physical toll on employees who worked around the clock to care for COVID patients and caused significant financial stress that resulted in more than 100 employees being furloughed.
Charmel expanded on the hospital’s financial plight in a May, 2020 Washington Post story at the height of the initial spread of the virus in Connecticut. At that time, the state was among the worst in the country for COVID cases and deaths.
Charmel told the Post he feared Griffin would be gobbled up by a larger health care system or, worse, shuttered.
“I like saying the independence of the hospital is at risk [rather] than the survival, though there’s some of that, too,” Charmel told the Post.
Charmel also told the Post he believed the federal government and the state would recognize the financial fragility of a small community hospital fighting a pandemic. The story goes on to say that Charmel “believed they would step up with enough help. Yet as spring deepens, he finds their response tepid.”
Griffin did receive about a $16 million loan from the Centers for Medicare and Medicaid Services in April, but that was, in effect, a cash advance that the hospital was required to start repaying later in 2020.
In the Post story, Charmel said he hoped the hospital would get some portion of the $12 billion the federal government was sending hospitals in coronavirus hot spots in the spring of 2020. Since Connecticut was one of the hardest-hit states in the country at the time, the hope was that hospitals here would get a significant portion of that funding.
The federal government allocated $291 million to 12 Connecticut hospitals, but Griffin was not one of them because it didn’t meet the threshold to qualify. To get the federal money, hospitals needed to have 100 confirmed COVID cases by April 10, 2020, and Griffin didn’t have its 100th case until 10 days after that deadline.
Less than a month later, as operators and state officials were scrambling to contain outbreaks in nursing homes, DPH agreed to the initial nursing home testing contract with Griffin for $7.8 million.
Charmel said the hospital’s financial problems and the testing contracts with the state are unconnected.
“The notion that DPH or the administration was trying to bail out a struggling hospital has no basis in fact,” Charmel said. “I shudder to think what the consequences would have been if we didn’t take on this enormous challenge and perform at a level that set the standard for all other Care Partners.”