Patient loan program mulled by RCH board

Consideration of a new loan program for patients with accounts receivable, state health and human services budget funding cuts and completion steps approved to finalize the old hospital demolition project highlighted the Ringgold County Hospital regular board meeting held Monday, April 17.
Hospital chief financial officer Teresa Roberts presented the monthly financial report showing a bottom line year-to-date loss of $179,504. Accounts receivables increased with 78 percent of accounts receivable under 120 days. Cash flow was negative $324,596 as cash was used to reduce total current liabilities; however, cash flow continues an upward trend. The impact of three pay periods in March was also noted. Total current liabilities are down over $1 million since the beginning of the fiscal year and reduced interest rates for the rest of the year should improve bottom line numbers.
Roberts also introduced the idea of a patient loan program. Roberts has been working with a committee of five area hospital CFOs to find additional options for patients with accounts receivable. The group has researched possible solutions and recently talked with Health First, a Wisconsin company that offers patient loan programs. Specifically, Health First would pay the bill to Ringgold County Hospital for patients eligible to participate in the plan. The patient would then pay that balance in installments to Health First with the first 24 months interest-free. After the 24 month period, if a balance remained, interest would then be charged. Interest rates would be set for RCH patients by the hospital. If the balance was defaulted on by the borrower, Ringgold County Hospital would repay Health First the lesser of the original loan amount or the balance remaining. Board members discussed the merits of increased cash flow now sitting in accounts receivable and also the option to offer their patients a loan program that might better suit needs than the current collection process used. The board requested additional information and specifics on the company and the loan program.
The RCH trustees received an update on the final steps to complete the old hospital demolition project. RCH administrator Gordon Winkler reported a letter of final completion was received by Elizabeth Myer, RCH legal counsel, from Don Seymour, FEH Architecture. The letter states all work has been fully performed and the project is complete. It was explained that upon acceptance of this final completion letter, the general contractor, Dore and Associates, may be paid final retainage.
Acceptance of the completion letter also sets the clock running for filing a disputed claim under a 573 waiver. Disputed claims must be filed within 30 days. This process could be used by local subcontractors, Bill Schaefer with Schaefer Excavating and Bill Bentley         with Willard’s Trucking, both with disputed claims against Dore and Associates for services performed. After the first 30-day window, a lawsuit against Dore and Associates may be filed.
Ringgold County Hospital has no legal responsibility for general contractor payments to subcontractors; however, RCH would need to hold back 20 percent of the subcontractors’ disputed amounts for 60 days as part of the final process. It is not known if any claims or lawsuits will be filed,
The board was also advised mechanics liens are not available for receiving disputed funds in this project.
In his letter Seymour indicated a copy of the process overview was also provided to Dore and Associates. After board discussion the letter of completion was unanimously accepted, and Winkler was instructed to begin the 30 day final completion timeline.
Winkler also updated the board on details remaining to offer the cleared lots on the old site for sale. City code requires that an independent engineer must review the site. Garden and Associates of Creston provided the review and a report was received on April 4.
Some cosmetic differences were noted in the report, including minor details regarding clarification on sewer, gas and water hookups, as well as labeling differences. For example, Mount Ayr city code requires square foot labeling, but the survey by Mid-States was in acres.Curb repair and driveway cuts damaged by Dore and Associates were discussed by Brent Wise, Mount Ayr city manager, Winkler and Rob Stackhouse, maintenance department head. Wise offered to oversee the changes. Feldhacker Contracting, Creston, Iowa will complete the remaining work and approval of the finalized plat is scheduled for May 1.
Administrator Winkler also informed the board of planned funding cuts in the state health and human services budget that will impact RCH. Cuts are basically in three areas: a $10 million decrease in certain Medicaid payments; $7.7 million cut from cross over claims, and elimination of retroactive Medicaid eligibility.  Crossover claims relate to dual eligibility for patients who are both Medicare and Medicaid eligible. Medicare currently picks up the deductible for these patients. Regarding retroactive eligibility, the state has allowed patients to receive payment retroactively once they are eligible for Medicaid if they would have been eligible during the time services were received. The state budget indicates an insurance standard will be adopted with no retroactive payments. In response to concerns reported to state representative Cecil Dolecheck by Winkler, Dolecheck stated these cuts are better aligned with national standards. In addition, CFO Roberts reported in the discussion RCH not only faces these Medicaid funding cuts, but state payments based on Medicare contracts have not been paid for the first quarter of the year.
Rounding out the meeting, Dr. Bruce Ricker, chief of staff, reported staff by-laws have been completely reviewed and changes have been finalized.  Most changes of the by-laws were undertaken to update current provider services and clarify in-place policies and procedures.