Hospital bad debt up $2 million

Hardin Memorial Hospital has recorded a $2 million spike in its bad debt for the first six months of the fiscal cycle, offset in part by a noticeable decrease in charity care.

The HMH Board of Trustees reviewed a mid-year financial report during its monthly meeting Tuesday, which recorded an $870,000 shortfall pinned primarily on the hospital’s bad debt problems. Bad debt accrues when patients fail to pay their bills.

According to the report, HMH budgeted $8.28 million for bad debt during the first six months but has racked up $10.58 million in uncompensated payments.

Elmer Cummings, vice president and chief financial officer, said the hospital has not been diligent enough in qualifying patients who may be unable to afford to pay for Medicaid or its in-house or disproportionate share charity programs. Charity care accrues for patients who cannot afford to pay.

Disproportionate share charity programs allow the hospital to be credited and recouped money that can assist the hospital in the future, Cummings said.

HMH only has expended around $9.1 million of the $12.4 million allocated for charity care, the remaining $3.3 million of which can be used to offset the charity care without a negative effect on the hospital’s budget, Cummings said.

As of December’s end, the hospital had recorded $120.3 million in revenues thanks in part to an increase in outpatient service revenue, which exceeded budget by $2.8 million at $66.7 million.

Operating expenses checked in at $121.6 million, which was $1.4 million above budget. Personnel costs were slightly below budget at $61.8 million.

Cummings said those numbers are not bad considering the issues the hospital has dealt with during the first part of the year with bad debt.

To assist patients, the hospital has hired new employees, including a financial counselor and billing staff, capable of processing claims and qualifying more people for charity care or Medicaid, he said.

Cummings said it takes talent to interact with patients in a manner that adequately explains everything they need to know and makes them feel comfortable. The goal, he said, is to ensure patients maintain their dignity during the process. They cannot simply be pushed through.

President and CEO Dennis Johnson said the problems with bad debt are striking health systems and hospitals across the nation but said the shortfall is rather minuscule when considering its budget exceeds $200 million annually.

This time last year, HMH recorded a shortfall of $623,000 while it was $571,000 two years ago.

On another note, Cummings said the hospital has seen an increase in the time it takes to receive payment on accounts because of Medicare Recovery Audit Contractors who are digging up closed accounts and reviewing them for impropriety and overpayments. RACs may review the last three years of provider claims for hospital inpatient and outpatient, skilled nursing facility, physician, ambulance and laboratory, as well as durable medical equipment, according to the American Hospital Association.

Cummings said accounts that have been pulled have already been reviewed.

“We have a very thorough account review process,” Cummings said.

Officials also said insurance providers have started asking for more records as a method to delay payments.

Marty Finley can be reached at (270) 505-1762 or mfinley@thenewsenterprise.com.

In other business:

• Chief Nursing Officer Linda Bragg announced implementation of a program to treat ST-Elevation Myocardial Infarctions, a serious form of heart attack. Bragg said the recommended maximum amount of time to take a patient with this form of heart attack from the hospital door to the cath lab for a balloon angioplasty is 90 minutes. Since launching the program, Bragg said the hospital has one patient under the program and trimmed nearly 30 minutes off by moving the patient door-to-balloon in just more than 60 minutes. A balloon angioplasty is performed by running a deflated balloon along a catheter through the skin and to the point of blockage, where it is inflated to open vessels and improve blood flow.
  HMH President and CEO Dennis Johnson said the program is one of the most positive initiatives ever tackled by the hospital. Prior to the program, the hospital would treat patients with thrombolytics to dissolve or break down blood clots or would transport them to Louisville for treatment, Johnson said.

• Tom Carrico, vice president and chief information officer, said the hospital plans to extend its electronic health record to roughly 16 practices and 37 providers, including its family care centers and recent acquisitions, such as E-town Ortho and Surgical Specialists. The implementation will provide adequate and up-to-date reports for physicians to review while removing some burden off patient, Carrico said. The hospital also is working on an initiative to consolidate its billing methods into one patient statement, cutting down on the number of bills a patient receives after treatment. Carrico said this patient statement would not include services obtained from an entity not employed by HMH.
• The board of trustees approved a business plan to purchase 59 new Stryker S3 Series beds at $450,000 to replace older bed frames averaging out at 27 years of age. The purchase was included as a line item in the hospital’s capital budget. HMH had adopted a strategy to buy a small number of beds annually to replace the oldest models.
• Johnson reported that HMH was a “Best in Class” finalist in two categories, Best Use of Health Content to Drive Return on Investment and Best Execution of Social Media Tactics, at the Healthcare Internet Conference.
• The Emergency Department recorded its highest monthly volume by treating 5,311 patients in December, driven in part by a rough flu season. Steve Toadvine, chief medical officer, said the hospital’s urgent care centers also recorded thousands of visits since the influenza season began. Johnson encouraged patients to seek out their primary care provider or an urgent care center to take pressure off ER volumes.