The board voted unanimously last Tuesday to accept Restoration Healthcare’s decision to stay as the management company for the hospital and nursing home.

“If you would like to have us we’d like to stay,” said Steve Clapp, president and CEO of Restoration Healthcare. “We want to see this thing through. You all have made a tremendous amount of strides.”

Restoration exercised its right to give a 90-day notice of termination in late November. At a special-called meeting earlier this month the board took several measures to cut costs within the organization, and discussed Restoration’s decision to leave. Those cost-cutting measures are being taken, and Restoration representatives feel the hospital is moving in the right direction.

“Right now this is where we’re supposed to be,” said Clapp.

The board heard from auditors Mike Partin and Julie Wheeler, who reported no significant findings in the audit of fiscal year 2009-2010, which ended June 30. Looking at the “big picture”, Partin said, “I see a hospital that’s had a real tough two or three years.”

The losses were at $2 and $3 million in 2008 and 2009, and in 2010 the losses are approximately $1.6 million.

“Even though the costs are reduced, and revenue continues to decrease,” Partin said. “Liquidity is getting more and more difficult.”

“You’re in a real challenging time,” he said.

Partin commended the board and management for taking proactive steps to reduce costs.

“You’re cutting expenses, that’s what you have to do,” he said.

Earlier in the month, the board obtained a $500,000 emergency loan for operation expenses. Partin told the board that was a good step; however he added, “I worry that you need more.”

The board unanimously accepted the draft of the audit.

Administrator Tim Brown gave the financial report and reported that a lot of the changes that were implemented in the special-called meeting haven’t impacted the financial numbers yet. Revenues continue to decline as admissions are on track to decline this month.

“We’re still in a loss position,” he said.

There have been around $65,000-$80,000 in salary reductions, but the full impact of those won’t be known until the next payroll period. Full-time employee equivalents (FTEs) have been reduced from 463 to 432, he said.

“Every department has been affected by the changes,” he said, “but the overall attitude has been positive toward the organization.”

Brown also reported on the cash flow projection.

“The next three to six months are the most critical,” he said, adding, “we will have more staffing adjustments.”

After discussion among the board members, board member Bill Debusk asked, “What’s going to be done then?”

Clapp reiterated that the first four months of the year will be the key.

“Hopefully we’ll get those costs down and get patients in here,” he said.

After the financial report was approved, county attorney Jimmy Estep told the board that there is a possibility that the hospital could borrow $500,000 from the county for operating expenses — contrary to what the opinion had been. Estep and county finance director Michael Tuten have been working on that process.

“We’re just asking for a safety net,” Clapp said. “Can we get the funds in place in the event we need it.”

The board approved a motion to ask the commission for up to $500,000 as safety net funding.

A specialist in improving reimbursements and documentation has been hired on a temporary basis. Frank Shiffer, of Integrated Healthcare Solutions, told the board that there are many ways to increase the amount received from insurance carriers.

“Insurance companies make it difficult to get paid,” he said, adding that he is looking for what’s not currently working right.

Shiffer told the board that the hospital has to be willing to fight the insurance companies, even be willing to go to court, in order to get paid for services. There were $250,000 in denials last year.

“They will eventually ease off on the denials,” he said, “because the squeaky wheel gets the oil.”

Internal documentation and communication are important, and he is working with staff and physicians on internal processes.

“We have to work as a team and not have finger-pointing,” Shiffer said.

“Everybody that’s got their job, they need to realize what they need to do and they better be doing it,” added Jack Daniels, County Mayor.

Shiffer assured the board that there is “light at the end of the tunnel.”

“The things we are identifying are significant,” he said.

Shiffer is scheduled to be with the organization for three months.