[Editor's Note: This is the third in a multi-part series of articles on the Grant County Commission work session of Aug. 14 and the regular meeting on Aug. 16, 2018.]

By Mary Alice Murphy

After discussion on the agenda for the Grant County Commission regular meeting and before public input, a report of both of which can be read by visiting http://www.grantcountybeat.com/news/news-articles/46058-grant-county-commission-hears-public-comment-at-regular-session-081618, commissioners heard the monthly report from Gila Regional Medical Center Chief Executive Officer Taffy Arias and Chief Medical Officer Richard Stokes.

Arias began by saying she wanted to report on what has occurred since their last report. "We have engaged several recruitment firms since you made the welcome decision on our status. We have interviewed one applicant for full-time oncologist, and a candidate for a surgeon. We have two more set up, as well as having a family practice physician coming in. We made an offer to a family practice physician and we hope he will accept. With these interviews and as we make offers, we are fulfilling our strategic plan to extend our service lines. We are also working on the 5-star quality rating. We are moving forward with that initiative."

She said the hospital had an active shooter drill. "All the employees knew what to do and where to go. It was successful because we saw several opportunities to improve. The staff was very engaged."

"We have had many compliments from patients for staff members," Arias reported. "When people are pleased, they are willing to come forward with issues, which we jump on immediately. We have had some staff turnover and we are attempting to uncover why."

The hospital has contracted with a company called Press Ganey to explore solutions through staff and physician surveys.

Stokes gave the report as of the end of June. "It was the 12th month of the fiscal year. We ended with a $1.152 million loss as compared to a loss of $2.6 million last year at the end of the fiscal year."

He explained that the EBIDTA (earnings before interest, taxes depreciation and amortization) "told us we did not quite cover our depreciation cost, giving us a loss."

Stokes said he continues to work on the revenue cycle for the hospital. At the end of May, Gila Regional has $5.2 million in unbilled charges. At the end of June, the amount stood at $1.59 million unbilled. "Our target is 3 days, and we were at 3.1 days."

"Denials went up in June," Stokes continued. "To try to keep denials to a minimum, we're holding claims longer and working through them and learning from denials. We have about $700,000 a day in denials. We want to cut that."

Cash collection for the end of June stood at 32 percent of claims, with a year-to-date percentage of 30 percent.

"For your information, our cash collection for July was 110 percent of June," Stokes said. "We expect net cash collection to exceed net revenue."

He said the Meditech update is set to go live the morning of Aug. 22, which is Wednesday morning. "We are making sure the changes work as intended and that the staff is aware of the changes. There will be some issues, but they will be minor compared to last year's upgrade."

Cash collection for June was $4.2 million, up from 2017, but down from May 2018. The hospital has 66 days of cash on hand. Accounts receivable stand at 73.7 days, up from 51 last year. "We are aware of why this is and are correcting it."

Accounts payable are at 52 days compared to 48 last year.

"In a look ahead, we expect July to be similar to June," Stokes said. "In August, we are making rapid changes to the efficiency of how the system works. We are optimizing the efficiency of Meditech. If trends hold true we will come in at $15 million if projections hold true from the first 15 days in August."

On accounts receivable, the hospital is not sending them out with or without errors, Stokes said. "We are holding them until they are without errors, so we get clean claims out."

He said the audit would begin on Aug. 27. "We have kept the same audit firm and they are involved in all our statements and how we calculate our reserve percentages. Tom (the auditor) will receive all our work papers for contractuals and will have a week to review them. This is the highest risk for the hospital, but I don't anticipate any issues. This is the first audit for me and the first for our controller."

Commissioner Harry Brown commended Arias and Stokes for the comprehensive report.

"We appreciate all your efforts to support us," Arias said in conclusion.

The next article will address the regular meeting agenda as reviewed at the work session and will include the actions taken at the regular meeting. More extensive items may require an additional article.