The Times Journal & Russell County News
Wednesday, Jul. 23, 2014 — RUSSELL SPRINGS & JAMESTOWN, KENTUCKY —
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Major insurance carrier loses contract to serve coverage at hospital
In Apr. 24-30 issue
By Greg Wells
Times Journal Managing Editor

RUSSELL SPRINGS - The Russell County Hospital board passed over the issue of the questions submitted to their management firm and went on to address the issue of contract negotiations between the hospital and Anthem Blue Cross - Blue Shield early on at an April 17 meeting.

Given that company's response to negotiations at present, the hospital's negotiator Tom Jones recommended cancellation of the hospital's contract with Anthem, which CEO Gary DelForge said he has already done.

Until October things will continue as they previously have, but after the 180 day waiting period those patients with Anthem coverage will be treated as outside network patients.

In many cases that will mean that the patient will be facing co-pays and deductibles that they don't pay when going to an "in-network" hospital.

Board member Rodney Johnson pointed out these higher costs to their patients and that some of them would not be willing to continue to come to this hospital if their insurance was not accepted.

DelForge said they would develop strategies to deal with the added costs if they were outside the Anthem network but he said he expects Anthem to come back to the negotiations.

In an interview this week, Hospital Board Chairman Jeff Hubbard said they cannot continue with the present level of compensation offered by that insurer and a new contract is a must.

He said Anthem, along with Humana HMO, make up 20 to 30 percent of the payments to the hospital. The bulk of payments, about 60 percent are from the Medicare / Medicaid program and the other comes from patients themselves, and other insurers.

Hubbard explained that when the hospital is only getting 1 percent over cost for 60 percent of the services and the other 20 to 30 percent is not paying what it costs to provide the services, there is no way to show a profit.

Though the particulars of the contract are confidential as part of the contract, Jones did mention to the board that the solution is not all solved in the negations.

"You can have the best contract in the world but if the business office isn't monitoring compliance with that contract…" Jones said.

After the board was satisfied with the decision on Anthem and was told that Humana discussions were still underway they went on to the questions they had submitted to the management firm regarding planning and accountability.

Rodney Johnson asked for some clarification to the answer to their question on the hospital's master plan.

Jeff Buckley, with Alliant Management Services said they felt a master plan was needed to develop a business plan going forward and to anticipate future needs.

For more on the questions and answers see the other story in this week's Times Journal.

In other news from the meeting, DelForge announced that the hospital was able to negotiate a better deal for the new chiller needed for the hospital's air conditioning system. He said the $75,870 was about what the hospital was told it would have cost to repair the older system.

CFO Ken Kimsal told the board that Medicare charge back of $577,000 that had been announced months ago had been re-billed and $405,000 had been paid to the hospital again and he was expecting to be billed for the $577,000 in the coming month.

The hospital had billed under their previous payer number after changing status under the Medicare program to a Critical Access hospital. The program's administrators refused those claims retroactively and told the hospital they would have to pay that money back and re-bill those patients' accounts under the new program payer number.

In an interview this week Kimsal clarified that the hospital has only been paid for about 80 percent of the claims sent in so far and that when all the claims are paid they will be bringing in more than they were charged back.

The board was also told that the local billing program has been working, with better payment results and increasing good will in the community.

They were also told that a new program to help enroll uninsured patients in state and federal programs has yielded solid improvement in the hospital's billing and reduction in the number of bad debt and charity cases the hospital has been seeing.

As the meeting was winding down, the board returned again to the issues with Anthem, suggesting that public meetings and advertising be done to explain the situation to the taxpayers and patients, and management said they would produce plans to see to that need.

Regarding the hospital's financial performance last month, Kimsal told the board that net revenue was higher than budgeted and so far this fiscal year the hospital has a net income of $179, 406 after the over $600,000 in local tax payments to the hospital.

Operations showed a profit of $125,708 in March Kimsal noted, saying that the hospital's cash position was also improving and that bad debt was falling.
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