NEWS
August 16, 2022

Hospital Overpays Employees $2M - Wants Money Back

Hospital Overpays Employees $2M - Wants Money Back

Image: St. Charles Healthcare

On Thursday, St. Charles Health System in Bend, Oregon informed thousands of employees that they were overpaid and will be required to pay the money back immediately. The healthcare system overpaid 2,358 employees by $2 million dollars. 
If this seems insane - it is. The million dollar question that employees want to know - how could this possibly happen?

In December 2021, there was a  ransomware attack on human resources management company Ultimate Kronos Group. The attack affected the software platforms health systems and other companies use for scheduling, timekeeping, payroll, and human resources. Therefore, St. Charles was unable to access employee timecard data from Nov. 28 to Jan. 22.

"During the outage, we did our best to pay people as accurately as possible for the time they worked based on the hours they reported," St. Charles said. "One of the unfortunate impacts of the outage was that some of our employees were underpaid, and some were overpaid. Over the last several months, we have focused our efforts on making financially whole those employees who were underpaid. We're now at the point where we need to recoup the $2 million that was overpaid."

The amount of money that was overpaid to employees ranges from less than $100 to as much as $3000. On average, most employees owe at least $780. St. Charles is offering different payment options for workers, including a "payment plan, a lump sum payment or a reduction of earned time off (vacation time) to offset their balance owed," St. Charles's spokesperson Lisa Goodman said.

Nurses were the most affected by the overpayment issue. Scott Palmer of the Oregon Nurses Association, the union representing St. Charles nurses, is currently representing nurses that have been overpaid. At an emergency meeting, the union has told members not to pay back the money yet. The union’s general counsel wrote a cease and desist order for the health system, urging it to halt the repayment process and claiming that what it was doing was illegal. According to Palmer, one nurse was informed how much she was overpaid via a sticky note.

The association “will vigorously defend its members rights to be free from this unlawful activity,” in a written statement. “The fact that St. Charles believes it made an error does not surprise anyone. St. Charles's use of unlawful debt collection demands against its employees to correct its own error is beyond the pale.”

The healthcare system, regardless of how much was overpaid, is requiring all overpaid employees to immediately start the repayment process. "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 health system said. "We have made every effort to keep our employees apprised of the situation."

A major concern for employees, especially hourly paid employees, is how overpayment was calculated. “I think there’s a right way of going about getting this fixed, and I don’t know if making our employees responsible for it is the right way to go about it,” said Josh Plank, a hospitalist with St. Charles who is part of the organizing committee for the providers union. He added: “They clearly have enough money to pay a multi-million dollar law firm to fight our union representation, so I don’t think they’re in that bad of a financial situation.”

Unfortunately, this is just another hiccup for the already struggling healthcare system. In May, it laid off 105 caregivers and eliminated 76 vacant positions. Then in July,  St. Charles announced the elimination of two executive leadership positions.

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