[Editor's Note: This is a part of a multi-series of topical reports on the lengthy Grant County work and regular sessions on July 17 and 19, 2018.]
By Mary Alice Murphy
Grant County commissioners rearranged the agenda at the beginning of the regular session on Thursday, July 19, 2018, to place the executive session to discuss whether or not to sell Gila Regional Medical Center, immediately after public input. Visit http://www.grantcountybeat.com/news/news-articles/45608-commissioner-comments-prior-to-vote-on-grmc-status-071918 for commissioner comments prior to voting and then http://www.grantcountybeat.com/news/news-articles/45577-breaking-news-grmc-to-remain-independent to learn the outcome.
Prior to public input, GRMC Chief Executive Officer Taffy Arias and Chief Financial Officer Richard Stokes gave the financial report for the end of May, the latest one that has been approved by the hospital Board of Trustees.
Arias started out her comment to the commissioners by saying she had had a restless night, thinking about whether it might be her last report to the Commission. "I'm positive and going about business as usual. I'm encouraged by the people of the community rallying together in support of their hospital. I appreciate the commissioners getting all the facts. We have our items on an agenda and have already begun to implement some. We now have all private rooms; we have begun an internship for nurses during their first year after finishing their training to invigorate the program; we bring a new set of relationships with teaching hospitals; a general surgeon has signed a contract and is working on his credentialing. It looks positive for the hospital and the community. I thank the commissioners, the board of trustees, and the administration for having the hospital in their thoughts all the time."
Stokes began his presentation by giving the statistics for the latest Board of Trustees approved financial report, as of the end of May 2018.
"We show expenses over revenue of $183,000," Stokes reported. "Year-to-date, as of May, the loss is $510,000 as compared to a loss of $6.9 million at the end of May 2017, as reported. We adjusted, during the audit process, about $4 million of that to show $2.7 million as the loss. An update on June, we have tentatively closed the books. We missed our projected revenue by a little over $2 million. We ended the month about $600,000 in the red, so we anticipate closing out the year at about a $1.1 million loss. Having said that, I would like to highlight what we're doing. We have worked on bringing the time from discharge to final coding down to less than two days, which is about the national average. We are working at strengthening the revenue cycle. The coding process helps us derive a higher case mix index. The physician staff has been really good at helping us with this. We are hopeful this results in higher reimbursements. We have corrected multiple coding mapping errors. We completed about 15 to 20 corrections in Meditech. We still plan to go live with the Meditech 6.5 update on Aug. 22. We have formal meetings once a week and meet informally just about every day."
For the month of May, the hospital had 457 patient days for an average of 2.8 days per stay. "We collected $4.88 million; we have 63 days of cash. Our gross accounts receivable is 69 days and we've brought our gross accounts days payable down to 51. We have a case mix index of 1.517, which is a good number. We've been working on the payee mix. We've been working hard on improving the revenue cycle and have made a lot of changes. We had an average 30 percent collection rate, which we are slowly increasing. We have moved up to 32 percent. My goal is 35 percent to 36 percent. I'm happy with the early results."
He noted the unbilled claims are improving, too. These are the claims for those who have been discharged, but not yet billed. "At the end of May, we had $5.2 million unbilled. We have tentatively closed out June and had $1.59 million unbilled. As of today (July 19, 2018), we had $785,000 unbilled. We are getting bills out the door much faster than in the past."
"In this past month, we initiated raises for bedside nurses, which will cost the hospital about $600,000 a year, and we will have to come up with cost reductions to pay that. We have commissioned a company to study our pay rates."
"The biggest thing over the past three months has been specifically the revenue cycle, including the business office and medical records," Stokes said. " We are now addressing the pharmacy. We have determined that the module has room for improvement. The system wasn't built correctly. Nurses have been doing a lot of manual work. It was not a problem with patient safety, but because of the system, items, such as incorrect dates, made the claims not reimbursable."
Commissioner Brett Kasten asked how much had been left on the table as a result of non-reimbursable amounts. Stokes estimated at least a hundred thousand dollars a year.
Kasten also asked how the Cancer Center would impact the bottom line as it ramps up to full operations. Stokes said: "Another million at least. We are only halfway there now. The volume and number of patients will increase and that will translate into additional dollars."
Kasten noted the loss anticipated in June and asked about the challenges faced by the hospital that month.
"Going through the accounts receivable, we administratively adjusted about $4 million that were no longer collectable," Stokes said. "We reserved the vast majority of the accounts."
Commission Chairman Billy Billings asked about other opportunities going forward.
"We will convert the primary care practice to a rural health clinic," Stokes said. "That will bring in about a quarter of a million dollars. It hinges on where we show up on the Medicare cost report. The cost report is critical, as we move toward critical access, also. As for what we are anticipating going forward, we expect some organizational changes. We will expand the 340B program to include an in-house limited pharmacy. We anticipate filling the first prescription at the hospital before discharge, so the patient doesn't have to run to the pharmacy immediately. After that initial filling of the prescription, we will transition it to the local pharmacies. We will create a community pharmacy program, which helps Walgreen's and CVS, for instance."
Arias added that the commissioners are privy to the strategic plan. "We have made no changes, and we are committed to every step of the plan."
Commissioner Gabriel Ramos asked how much extra the nurses have received.
"They received a bump of up to $12,000 a year," Arias said. "These raises were for full-time and part-time bedside nurses only. We will be looking at wages for every employee."
Commissioner Harry Browne said he did a quick back-of-envelope calculation and came up with about $2 an hour raise.
Arias said she thought that was about right. "Those who were hired at a higher rate did not get more. We gave percentages to experience in years in acute care. Those who had experience in school clinics or home health did not get the same percentages. Some got higher wages; some got none."
Billings said he appreciated the high level of information received in the monthly reports. "It's a big change from the past. If the vote goes the right way, I hope we can continue to keep this high level of information coming."
Before public input, commissioners had requested the agenda be re-arranged to allow discussion on a resolution, so that a man representing the Department of Health be not held hostage to public input and the executive session.
The resolution title: Approve/Disapprove Resolution No. R¬18¬19; A Resolution Determining That The Grant County, New Mexico State Of New Mexico Department Of Health Lease Appropriation Bonds (Ft. Bayard Project) Series 2008 Maturing On And After July 1, 2019 (The “Bonds”) Be Called For Redemption, Based Upon The Department Of Health’s Exercise Of Its Option To Purchase The Fort Bayard Medical Center Facility; Declaring That The County Is Exercising Its Option To Redeem The Bonds; Approving A Form Of Agreement Between The County And The Department Of Health Regarding Notice Of Redemption Of The Bonds And Providing For The Department Of Health To Engage Consultants To Complete An Appraisal, Improvement Survey, Title Commitment And Phase 1 Environmental Report In Connection With The Exercise Of The Option To Purchase The Facility; Delegating Authority In Connection With The Agreement; And Taking Related Action.
The representative said that on July 1, 2019, the bonds for the Fort Bayard Medical Center became callable for the first time. "We want to exercise our right to have you redeem the bonds, so we can purchase the facility. We want to do so now to save money. Also, the hospital needs some capital improvement, and because we cannot spend capital dollars without owning it. The amount of capital improvement required cannot be absorbed by our operational budget. We have made notification to the county that we want to do this."
Billings clarified: "You've had the option to purchase and now you're choosing to exercise the option to facilitate Fort Bayard Medical Center improvements."
"My recommendation is that we move forward and let them purchase the bond," Webb said.
Kasten asked what would happen if the appraisal is not enough to repay the bond.
"Title insurance is an issue," Webb said, "but we feel confident that the county will not lose money."
[Editor's Note: The resolution was addressed later in the meeting.]
The next article will begin with the presentations made at the County Commission work session on July 17, 2019, by the USDA state director on the county agreement with USDA Animal and Plant Health Inspection Service Wildlife Services and by representatives of WildEarth Guardians on their concerns about the agreement.