Mendocino Coast District Hospital Finance Committtee June 20 2017

MediCal begins to collect its 2 million dollar debt

Editorial by Marianne McGee, MA/ABS

The Mendocino Coast District Hospital (MCDH) Finance Committee held its regular meeting on June 20, 2017 and spent the majority of its time reviewing the monthly report as presented by CFO Wade Sturgeon.  As the end of the year approaches, it operated at a net loss of $143,462 although Mr. Sturgeon spun it as a positive situation since the year to date loss appears to be much less than than anticipated in the 2016/2017 budget.

The most interesting information is that the State of California has started collecting the over payments made to MCDH for MediCal patients from its 2013 audit.  While this has been brewing for some time, it is now clarified that approximately 2 million dollars will be deducted from current MediCal revenues at an average of $75,000 per month until the backlog is repaid.  While it is a bit complicated, essentially MediCal overpaid the hospital for low income patients care over a three year period.  While MCDH could pay this off in lumps sums, it would negatively impact cash reserves, so Mr. Sturgeon would rather pay off the monthly installments and pay the interest, although he was not able to remember what that rate is. The other negative fiscal impacts continue to be less income from the 340B program, which refers to a federal program that allows MCDH to purchase drugs at a reduced rate and be reimbursed or charge at a higher rate and increased bad debt write offs.

John Allison had a very good idea that the Finance Committee develop a financial strategic plan to address both current issues as well as the potential future needs, including the 2030 earthquake deadline, which may require the facility to be replaced.  Given the current facility and equipment needs as well as the future issues, this idea made a great deal of sense to me.  On the other hand, CEO Bob Edwards shunned the idea, saying that planning was really the responsibility of the MCDH Planning Committee.  Given the facts that the MCDH Planning Committee frequently does not meet, has recently lost two long time community volunteers, has inept leadership and appears to just approve whatever staff directs them to do, leaving financial planning to that group  means that it will either not happen at all or will be poorly done.

The issue of needing tax monies to survive is an ongoing topic of conversation with both the community and MCDH board and management.  The essential element to  any new successful public funding is trust and it appears to me that there are still many questions to be answered and relationships built, for that to happen. MCDH Board members and management staff need to listen to and address the many concerns and problems that patients, citizens and even MCDH staff have.  Most of us do not even know who and how to have or complaints aired and addressed in the current system.

Do not forget the OB meeting on June 22 at 6:00 PM in the Fort Bragg Town Hall, your healthy communities depend on it.

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