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Board tells Seneca to focus on collections and spending

Westwood PinePress of Westwood, California

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"We have three big things in respect to billing," said Chief Executive Officer Doug Self during the Aug. 24 Seneca Healthcare District board of directors meeting.

He said the change to the Palmetto Company for Medicare billings had ended up with a fair amount of resolution needed on pain and orthopedic bill reimbursement.

"We learned Palmetto had their wires crossed and had mixed up the paperwork that would allow for the orthopedics billing through the Seneca district," he said.

He said as of June, $130,000 had been "left hanging out there" on the Shasta doctors.

"Pain is around $130,000, and there is probably another $60,000 in physician fees," he added.

He also said the lack of payment impacted the percentage of denials in the August financial report.

"We had 32 percent in July and a 15 percent denial rate in August. Despite the fact we have the extra denials from the orthopedics, we have cut the denial rate in half," he said.

He told board members that Linda Stumf, account manager of the Healthcare Resources Group, had told him that once Palmetto was cleared up, the percentage of denials would drop to single digit rate.

"We are making some really good progress—half the hospital patients are Medicare," he added.

Continuing with his financial reporting, Self spoke about the days the bills are in accounts receivable. He noted there was another increase in days for the month of August.

August is the fourth straight month days in accounts receivable have increased since April 2009. At that time the billing turnaround was listed at 60.68 days. For August the turnaround is 70.33 days.

Board member David Slusher asked if the accounts receivable days were going up because HRG is only on a short-term contract with the district. Self said he has had others ask him why he, was the only one to spot the problems.

Bill Gordon, of Renown Hospital, asked if the days hadn't gone up because of the higher level of money and activity for the July and August months?

Self told the board he had pointed out to Stumf and Gerald McCleary that the days have gone up for four months straight.

In looking at the accounts receivable numbers, he said 10 days equates to about $200,000 in gross revenue to district. He said by his calculations he figures the hospital earns approximately $70,000 a day and said three days of revenue tied up with Palmetto equates to a lot of money.

"Palmetto is very frustrating to many healthcare entities. I had to show them the paperwork they had mailed to the district that showed the provider payment numbers for the physicians," he said.

In the first of two board directives, president Bill Howe assigned Self the priority to clean up outstanding revenue due to the district from Palmetto.

Second, Self and the board reviewed patient income and activity. Self said pain services and surgeries were up considerably from the same time last year.

"Clinic visits have been significantly higher than last year and over the past three months," said Self.

He said the higher numbers were due to two factors: having all the physicians back at work and closing Westwood Clinic.

"We aren't specifically tracking the Westwood community patients, but rather I am receiving that information anecdotally from the physicians," he said.

Total gross patient revenue was reported at almost $2.2 million, over $360,000 more than projected for August.

After revenue deductions were made, net operating revenue ended at $1,086,876. Operating expenses for August were $1,156,507, which left the district with a net loss of $69,631.

"It's our duty as a board to ask the administration to batten down the hatches on expenses, especially during the winter," said Slusher. He cited August as an example of a high revenue month that had been discounted because it was also a high expense month.

"Despite high summer activity, the district reflected a financial loss," said Slusher.

He then asked Self to continue to look for ways to monitor and reduce monthly expenses.



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Original Publication Date: September 30, 2009



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