Medicare ‘glitch’ clogs cash-flow at Russell County Hospital
In Feb. 28-Mar. 5 issue By Derek Aaron Times Journal Reporter
RUSSELL SPRINGS - A "cash flow glitch" involving the Medicare program was brought to the attention of the Russell County Hospital's Board of Directors during this week's regular board meeting. CFO Ken Kimsal directed the board to Tom Clark, the Vice President of Finance at Alliant, who spoke on the cash flow analysis for the hospital.
"You can see in the January statement, we have $1.5 million in cash on hand," he said. 'That's 38 days of cash on hand, in other words, if we stopped having any cash inflows at all we could only last 38 days."
Clark said he factored in several new items that weren't covered in last month's statement.
"We just got notice last week that Medicare is going to take back the reimbursement we received on the 2005 claims to the tune of $600,000," Clark said. "We converted to critical access back in December of 2005 and when we converted … you have to have a new provider number for critical access."
Clark said with the process Medicare uses, it is impossible to obtain that provider number. He said there was a delay in certifying the number.
"We called Medicare and they said to go ahead and bill the critical access claims for your old number and we'll settle on the cost report," he said.
He said Medicare gave all critical access hospitals at the time.
Clark said Medicare was notified by their superior of their incorrect way of payment and that it needed to be modified.
"Medicare now says, in order to get their funds straight, they must re-bill all these critical access claims," he said. This means Medicare patients who used the hospital as long as three years ago may be re-billed for hospital visits.
The board was noticeably upset and many asked how all Medicare patients, some with possible third-party insurance, could be found since some may have died or moved away from here.
"We have to re-bill them in order for the process to get straightened out," Clark said.
Kimsal said the hospital would be reimbursed for any losses through the Medicare bad debt program.
"In order to get we have to show evidence that we … did re-bill," Buckley said.
Kimsal said the hospital was first notified of this situation on February 13.
Buckley said the office staff jumped on this dilemma quickly and everything was going smoothly.
Jeff Buckley, Alliant's Vice President of Management Services suggested a letter should be mailed to former Medicare patients alerting them of this situation.
CEO Gary DelForge said these patients had already paid for their care but Medicare is "making us bill again."
"What happened is regrettable, but we're at the mercy of our friends in Washington," Buckley said. The board is coming up with ways to help those who might have been affected such as longer hours so people could come in with their questions and mailing letters to potential affected persons
In other happenings at the meeting—
• Clark told the board that based on the first seven months of this fiscal year, the hospital's debt is expected to increase.
"That's going to bring another $370,000 off the bottom line for losses," he said.
"My best projection for the end of the year is we'll have $800,000 in cash down from $1.5 million."
This is due to increased self-pay by 34 percent and charity. The board discussed some possible avenues they take to avoid a tight crunch on next fiscal year.
Buckley said that bad debt was rising all over the nation and that it wasn't just a regional problem.
• The hospital's income statement, the fiscal year ending June 30, showed that the hospital had received more than $25 million with just over $17 million in total reductions from the revenue. The hospital had a net income loss of $17,769 for the year-to-date.
• The board heard a report by CEO Gary DelForge about the Monin Building, which the city of Jamestown had purchased and is expected to eventually house a relocated City Hall.
DelForge said Mayor Brooks Bates had asked about renovating the building but the board hadn't yet received the note authorizing the full purchase of the building by the city of Jamestown. He said Bates would hold off on any renovations until the transaction was complete.
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