Mendocino Coast District Hospital Finance Committee April 24 2018

Keep an eye on the bigger financial position & issues

Editorial by Marianne McGee, MA/ABS

The Mendocino Coast District Hospital (MCDH) Finance Committee meeting was at 4:00 PM on April 24, 2018. Once again, Chair Lucas Campos was missing and not on the phone either and after my tirade at the end of this meeting, I was informed that Dr. Campos’ MCDH Board position is on the MCDH Board of Directors meeting on April 26, 2018. (It is interesting to review the MCDH Candidates Forum on Mendocino TV when Dr. Campos was a Candidate espousing leadership, planning and community involvement, which have not happened! Click on the link to watch Dr. Campos, Dr. Kevin Miller and Steve Lund make promises not delivered!  https://mendocinotv.com/2018/04/25/mcdh-candidates-forum-on-building-healthy-communities/)

It appears that the hospital is continuing to lose money at a rapid rate, indicating on the Financial Statement that the negative year to date balance is now listed at 3.5 million dollars, slipping below the Bond Covenant Requirements.  As often reported, the revenue is down while expenses are up, with much of it caused by high registry costs and professional fees.

The personnel issues, firings and loss of long time accounting and billing staff, culminating in the “resignation” of CFO Wade Sturgeon are a major factor in the loss of revenue, backlog billing issues and  high costs of professional fees. The high increase in Professional Fees relates to the expensive temporary help hired to capture the aging accounts, replacing previous staff as well. The attorney fees associated with the legal action against MCDH, Steve Lund, Bob Edwards and Wade Sturgeon by Human Resources Officer Ellen Hardin over billing and personnel issues are another financial disaster looming in the near future.

An interesting moment occurred when Journalist Malcolm Macdonald asked how much money was spent on legal fees last fiscal year and Mr. Ellis informed him that he would have to request that information through this committee or the Board of Directors!  This is an indication that the community’s cries for greater transparency are NOT being heard!

A major topic was whether this is an actual loss or reflective of the more conservative recording of accelerating aging accounts. This change Mr. Parigi made from CFO Sturgeon, who created budgets that had a rosy reflection but left MCDH with a huge and unexpected 1.1 million dollar loss after the audit.  Mr. Parigi, like Mr. Ellis, had said that the actual numbers will be the same at the end of the year, when accounts are reconciled and the Cost Report is submitted to Medicare.

A another reason for such a loss this year is that Medicare is taking back money it overpaid MCDH last fiscal year. It is also apparent that many people following the MCDH issues, do not realize that Medicare, which accounts for almost 60% of the Patient Revenue, does reimburse at 99% of costs, assuming that billings are done correctly, which has been an issue.  Medicare, base on the Cost Report and the previous year’s reconciliation, will either increase or take back the revenue it pays MCDH next year because it pays the hospital based on those elements before services are provided and on a monthly basis.

For a reason that I do not really understand, Tom Birdsell and Kirk O’Day put the brakes on approving the new Electronic Health Records (EHR) system that has been discussed for years.  I am confused why they chose to take a stand on this issue, as the numbers more than pencil out, and even I recognize it as a critical need and a less expensive, while more effective, alternative.  Apparently CEO Edwards included a worksheet in the packet, which did not copy correctly and was confusing. On April 26 at 3 pm, there will be a special meeting to approve the EHR project, which I think will be a waste of time as it will be approved by the MCDH Board anyway.

Once again, the new or updated “Strategic Initiatives” were presented  by CEO Edwards. The only understanding is that these, although they do not appear to be congruent with the very specific requirements with Medicare, will be submitted, instead of the” Quorum Strategic Plan”  referenced from my Planning Committee Report