The expiring terms of Seneca Healthcare District board president Ronald Longacre and treasurer David Slusher resulted in former board member Bill Howe running for a seat on the board during the November 2012 elections.
With only two seats available, a formal election had to take place, and the fate of the board was put in the public’s hands.
With the majority vote of 1,383, Howe was chosen to replace Longacre, who received only 819 votes. Slusher came in second with 1,035 votes, and was able to keep his seat on the board.
During the Dec. 20, 2012, board meeting, Howe and Slusher were formally introduced into office. While electing officers, secretary-treasurer Richard Rydell nominated Slusher as the new board president. Howe seconded the nomination, and the decision to appoint Slusher as SHD president was passed unanimously.
In his new role as president, Slusher appointed Howe as his replacement for board treasurer. The remaining board members retained their positions: Loretta Gomez as vice president, Bob Caton as secretary and Rydell as secretary-treasurer.
Although November 2012 was a great revenue month for SHD, collections have dropped significantly, which has a big impact on the bottom line.
The hospital district ended the month with a better-than-expected net income loss of $11,000. Even though this is more than the monthly budgeted net loss of $178,000, SHD is still falling short of its financial goals with a year-to-date net income loss of $109,000, which is $238,000 more than the budgeted net gain of $130,000.
Due to higher volumes in outpatient services, gross outpatient revenue was 19 percent over-budget. Chief Executive Officer Linda Wagner said a major factor for the increased revenue was due to an increase in surgery and lab visits. “Not only did we have a lot of patients, they were high-need patients and required a lot of nursing care.”
The hospital generated 112 patient days, which is only two days shy of the PDs in March 2012, typically the busiest month of the year.
As a result of the increased outpatient patient revenue, total patient revenue was 31 percent over-budget. Despite the positive numbers for November, SHD is still under-budget for the year by almost $1 million.
The enhanced patient revenue also caused an increase in contractual allowances, going over-budget by $371,000 with a net income gain of $1.2 million. Wagner explained that had the contractual allowances stayed in line with the budgeted amount of $902,000, November would have been the best month Seneca has ever seen during this time of year.
Due to the higher-than-expected patient days, SHD had to contract for additional labor and purchase additional supplies, which caused an increase in expenses.
Operating expenses were over-budget by $57,000, which contributed to the year-to-date expense budget being $121,000 over-budget.
Wagner explained that part of the reason is because the emergency room doctors have been playing catch-up on office records and salaries, causing professional fee expenses to go over-budget by $37,000. Wagner expects this trend to last a couple more months, but to eventually even out as the year goes on.
In order to pay some outstanding bills, including those incurred from the implementation of the electronic medical records system, SHD spent $795,000 out of the EHR restricted funds, leaving them with a balance of $340,000.
Linda Stumpf, of Healthcare Resource Group, reported that due to some errors with their automated billing system not all claims were submitted. “It had a big impact on cash collections,” said Stumpf.
There was also an issue with clinic claims being coded improperly. There were 789 unbilled claims at the beginning of November. By the end of the month, however, only 74 claims remained. Stumpf said the money should be seen within two to three weeks.
Accounts receivable balances were also being inaccurately reported due to inconsistencies in how the claims are input into the CPSI system. She explained that the system runs on claims and if there is not a claim for the charges to attach to, it records them as patient responsibility. Also, if a claim has charges and has been coded but not released for billing, it will cause issues within the system.
“CPSI shows a lot more patient balance than what it really is. The accurate amount does not even come close to what is recorded in the system,” said Stumpf.
The claim denial rate has also increased due to system setup issues. “It has been fixed, however, and we should not see this many denials going forward,” said Stumpf.
Due to the collection issues, days in accounts receivable have increased to 76. Stumpf assured the board that it should be back under 60 by the end of January.
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