Audit alleges millions in extra costs at Graz hospital

An audit by the Styrian Health Fund has raised serious allegations against the Brothers of Mercy hospital and pharmacy in Graz, ORF reported. The pharmacy allegedly charged the hospital substantial markups on some medicines, which the hospital then billed to the state as additional costs.

The audit was commissioned by the state after earlier allegations emerged in May. According to information obtained by Kleine Zeitung, the completed report found that the Brothers of Mercy pharmacy on Annenstraße had applied markups of more than 1,000 percent on certain medicine deliveries over several years, amounting to more than ten times the purchase price.

The hospital allegedly passed on these additional costs through the statutory deficit compensation system, which covers a hospital’s shortfall, thereby claiming millions of euros in additional taxpayer funding over an extended period. The pharmacy’s profits were allegedly not used to finance the hospital’s operating deficits.

The state’s health department said the matter was being reviewed. It said it had instructed the Health Fund’s financial oversight body to investigate the allegations in detail as soon as they became known. The report had been submitted, and the state was examining its next steps.

The leadership of the Brothers of Mercy said it could not comment because it did not know the report’s contents. It said it continued to assume that the billing practices complied with applicable laws.