The Russell County Hospital's Board of Directors was told last week that the hospital began the year with a net profit in operations and overall thanks to better than budgeted performance, especially in in-patient revenue.

CFO Ken Kimsal told the board that operations netted just under $28,000 and overall figures were $46,031 for the June reporting period.

There was some trepidation among the leadership however, not because of present operational situation, but because of a new federal accountability program that has been instituted.

Interim CEO George Walz explained that outside auditing companies have been awarded contracts by the Medicaid program to audit all of the records from 2007 forward. The companies will be paid based on a percentage of any money they can collect from hospitals for alleged overpayments to those hospitals, and the appeals process for hospitals is expensive and difficult.

"You've heard of bounty hunters," Walz asked.

Rather than fugitives, these companies hunt money paid to hospitals they can lay claim to for the federal government.

He reported to the board that, in a 6-state trial period over three years the Recovery Audit Contractors (RAC) were able to find about $980 million dollars for the federal government. Walz added that over the same period the RAC found $37 million in underpayments for the hospitals.

He noted however that the contractors are paid based on the money hospitals have to pay back to Medicaid, not how much is paid to hospitals.

With that liability looming the board approved spending as much as $60,000 on a facilities review to prepare for their expansion program funding. The board was told that there could be other funding besides the USDA and HUD programs which require the study and that the administration was looking into those programs as well.

Also approved was purchase of a $17,220 electroencephalograph for the hospital.

The board was told that the old unit has been off-line since late last year and that the hospital was missing out on doing those procedures.

A new air-conditioning unit for the emergency room was approved, at a cost of $7,168.

The board also approved teaming with the Cumberland Family Medical Center, in a grant-funded project, to determine the need for a obstetrics unit in the county.

Board Attorney Jeff Hoover said he would be ready to present a new management contract for Alliant at the next meeting.

The firm had asked for the new contract as part of the search for a new chief executive officer. After releasing Gary DelForge the company employed George Walz as an interim  CEO until a new one could be hired.

Alliant officials reported that in order to secure a new CEO for the hospital the company would need a contract extension in order to guarantee a new-hire would have a job past the end of this year.

They are also recruiting for an emergency room physician, a surgeon and a physical therapy professional.

Walz also reported to the board that staff that would be in contact with patients would be the first to get the H1N1, or swine-flu, inoculations in October. If supplies were large enough all the staff would be inoculated once those in constant contact with patients were first.

He also said the hospital was looking ahead to the 2015 deadline for electronic healthcare records requirements, but that at present there was a great deal of confusion nationally over protocols and standards.

Walz added that it was clear though that the program could be expensive for hospitals.