Claiborne County Hospital Continues to “Bleed”

Published: Claiborne Independent

April 1, 2009

by W. Lee Brame

County hospital finances continued to bleed red ink during the month of February. Overall, hospital operations lost over $130,000 dollars for the month. Despite the initiation of several measures to improve finances, a huge bill for medical services provided by the hospital to hospital employees wiped out the organization’s potential profitability for the month.

While many small companies and partnerships cannot afford to provide health benefits to employees, most people assume that large companies or hospitals don’t have any difficulties in providing medical benefits. But unexpected, serious illness can happen to almost anyone or any organization. In February, medical costs for employees and family members covered by the hospital medical coverage exceeded expected (budgeted) costs by over $300,000 dollars.

The financial report detailed that the hospital itself operated in the black during the month but that all other operating areas lost money. In general, some of these losses reflect a change in accounting procedures as well as a change in patient volumes. Emergency Medical Services and Home Health volumes were down for the month and the Nursing Home and is now being charged for its share of the hospital’s laundry service and food service bill.

Departments also started to write-off bad debt.

Analysis of bills also showed that hospital utility bill has increased by $53,000 over expected costs for the year.

After much discussion, the financial report was accepted by the board’s attention turned to measures to improve hospital finances. On March 10, Mercy Health Partners brought in a Revenue Cycle team to inspect financial operations in every department.

This paper will not subject its readers to all the details of the twenty-some proposals and procedural modifications that will be implemented by the hospital during the next three months. Many, such as the procedure coding audit, clinical documentation initiative, and Home Health billing oversight changes will be entirely invisible to hospital customers.

However, many of the changes will be immediately visible to hospital customers and patients. In many doctor’s offices, patients usually see signs that indicate that insurance co-payments are due before leaving the office. Many insurance plans are established with the requirement that patients pay their co pay to the physician or provider at the time that the service is provided.

As of May 1, patients at Claiborne County Hospital can expect to be asked for their insurance co-pay when they register.

The hospital board also approved a proposal to contract with Med Assist to provide expertise in determining if hospital patients are eligible for any governmental or private medical coverage and to help the patient complete the forms and applications for that medical coverage. While hospital staff is familiar with TennCare, Med Assist contractors are also qualified to help Virginia and Kentucky residents who choose to use Claiborne County Hospital complete paperwork for those states Medicare programs.

Med Assist staff also has expertise in completing medical claims forms related to workers compensation and hopefully, school accident insurance.

Internal hospital billing processes are also due (perhaps overdue) for a change. Ancillary Service Departments (Labs, Radiology etc) will be required to provide charges to the billing Department much faster. The Revenue Cycle Review team expects that patients and insurance companies will start getting their bills quicker – and hopefully the hospital will get paid quicker.

Billing related to Home Health will transition from a manual system (which currently takes two months to produce a patient bill) to an automated system. The hospital board approved purchase of an automated system designed for Home Health Care use. Home Health providers should be trained and equipped with a hand held device that they will use to document their services by the middle of summer.

The board also approved a decision to stop an unsuccessful test of an alternative billing software used by the Nursing Home and return to a previous system that was more accurate. The billing process used by emergency medical services will also be standardized to mirror hospital billing procedures.

The work by hospital staff, Mercy Health Partners, and board members in review of these financial plans made the board meeting run abnormally long. In other business, the board advised the hospital that an in-house patient rehabilitation project would have to be publicly advertised and bid. The board also approved a proposal to accept a lower bid by Wausau to provide workers compensation coverage.

By the time the agenda items were covered, there was little energy left to discuss the resignation of Hospital Administrator Dan Colón. Or perhaps the discussion of financial management improvements, several of which had been discussed, but never implemented during the previous year, made the conversation unnecessary.

One point that was provided in passing was that the hospital failed to make timely payments into the Tennessee Consolidated Retirement System on three separate occasions during the previous year. As a result of these late payments, the hospital paid penalties to TCRS in December 2008, January 2009, and February 2009. Employee TCRS contributions appear to be up-to-date at this time.

Mayor Joe Tyler Duncan received assurances that the former hospital administrator was not being paid severance pay by Claiborne County Hospital.