Hospital suffers another setback

Vicki Hyatt

Jun. 18, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- Last week, Haywood Regional Medical Center suffered another blow from federal regulators.

Hospital leaders had been consistently told Medicare billing could begin immediately after it passed a second reinspection following its Feb. 24 Medicare revocation. That happened on May 22 and the hospital again began treating all the patients that could accommodated.

Al Byers, the hospital's interim chief executive officer, told county commissioners Monday the retroactive billing date for provided services is June 6, the date the Centers for Medicare and Medicaid Services deemed the hospital was in full compliance with the agency's conditions of participation.

The decision means all Medicare patients treated at Haywood Regional between May 22 and June 6 cannot be billed for services provided. Some private insurers are following suit, and Byers said he's suspecting the same will be true for those served who were on the Medicaid program.

Medicare is a federal insurance program for those age 65 and older; Medicaid is a federal program that provides medical care for the impoverished. About two-thirds of those served at Haywood Regional are under one program or the other.

The ruling should not impact private physicians who performed surgeries or treated patients at the hospital, said Robin Tindall-Taylor, hospital spokesperson, because physicians have their own provider number.

When the hospital is operating at full capacity, it bills about .5 million a month, Byers said. Earlier estimates pegged the hospital's capacity at 75 percent after reopening, so offering 15 days of services that cannot be billed could mean the hospital is missing out on about million in anticipated revenue. On Tuesday Byers said the average patient load at the hospital from May 22 on was more along the line of 40 to 50 percent of normal, which lowers the amount of foregone funds.

Byers told the commissioners the hospital could have appealed the decision, but decided to move forward because an appeal could trigger increased scrutiny.

The CMS letter also indicated the certification is contingent upon clearance from the Office of Civil Rights. If approval is not obtained, reimbursement will be postponed until the effective date of that compliance, the letter states.

Kate Fenner, the CEO of Compass Group Inc., the consulting firm hired to gain recertification, was the first to tell hospital leaders Medicare billing could happen on "day one" after passing the final reinspection.

In an e-mail interview, Fenner indicated that isn't necessarily the case.

"A reading of the rules and regulations leads one to understand the timing is discretionary to the CMS Regional Office (Atlanta), that they could have reinstated the number as early as the successful evaluation of compliance," Fenner wrote. "They chose not to. I cannot comment on the why or wherefor of that process. It is invisible bureaucracy coupled with rules interpretation, all mysterious to me."

Mark Clasby, who chairs the hospital governing board's finance committee, said he learned of the CMS ruling that diminishes anticipated revenue Monday morning.

"I was shocked to learn we couldn't bill retroactively to May 22," he said, noting the board would consider options at its next meeting.

Recovery in progress

After Haywood Regional's Medicare provider number was revoked, the hospital operated at a fraction of its capacity, using its reserves to make payroll and keep skeleton services available.

Getting back to full staff and full service, Byers told the commissioners Monday night, has been a slow process.

"A lot of folks are wanting to come to our hospital, but we cannot handle them," Byers said. "There were no ICU beds available for the whole weekend."

The lack of adequate hospital staffing is the limiting factor, he added. The hospital has hired eight new nurses in the past seven days, Byers said. He told the hospital governing board members earlier this month the number of hospitalists -- physicians who tend to hospitalized patients and admit them to the institution -- was half what was needed and negotiations would be started to bring the number of emergency department physicians up to the level needed.

Meanwhile, those who cannot be admitted at Haywood Regional when the inpatient beds are full are referred to neighboring hospitals; those who show up at the emergency department, by law, must be treated there.

Byers said he is moving forward with hiring key personnel at the hospital, noting an offer has been made to an emergency department director; interviews are scheduled for a nursing supervisor; the CEO search has been narrowed down to seven finalists and a full-time recruiter, who is also a nurse, has been hired to recruit nurses.

Some nursing staff that previously worked at the hospital have 13-week commitments at other facilities, Byers said, but are working one shift a week at the hospital to see if promised changes are indeed being made.

"I hope I am walking the walk and showing them there is a change," Byers said.

He issued high praise for the nurses at the hospital, who despite having many "hits" during the hospital's recent decertification troubles that included layoffs and reduced hours, pitched in $ 300 to buy clothes and other items for a child that needed to be transported to another hospital.

Finances are going to be tight, Byers said, telling the commissioners the financial statements at the end of May showed cash reserves of $ 13.5 million and estimated cash needs of $ 2.2 million in June and $ 2.5 million in July. The hospital's bonded indebtedness is $ 5.5 million -- an amount the board has placed in an "untouchable" category; and accounts payable of $ 750,000 to be made, though at a hospital board meeting Byers said the total accounts payable is $ 2.2 million.

"It won't be a bed of roses, but we think we will be OK," Byers reported.

Commission Chairman Larry Ammons asked why the bonded indebtedness needed to be kept separate, noting that if a family needs to have the entire debt owed on a home on hand, they wouldn't need the mortgage to begin with.

Byers said the finance committee is studying carefully what to do about the bonds. At a recent board meeting, hospital board member Bob Browning asked how discussions were going with Wachovia (NYSE:WB) Bank, the institution holding the hospital's bonds, and Byers responded the matter would be taken up in closed session.

With the new Medicare electronic billing system, payments for services should be flowing within 14 days of when the bills dating June 6 forward are sent.

"It will have cost the hospital $ 12 million to go through this, not counting expenses for the CEO search," Ammons said. "It may be good to consider (he bond reserve) as part of cushion that's available."

"Looking at this is really scary to me," said Commissioner Skeeter Curtis. "July looks like it will be defining moment."

The commissioners thanked Byers for meeting them, noting the county had no authority to demand a report or be involved in any aspect of the hospital.

"We get questions from our constituents," Commissioner Mary Ann Enloe. "This is working extremely well as a communication effort for people in the community. When we get calls we explain the hospital board is where they need to direct their calls."

"We want you to continue to come because of people who keep up on what's going on at the hospital with these meetings," said Ammons. "A lot is still going on."

Fenner reminded the community the hospital's recertification occurred in record time.

"Given the issues that needed to be addressed, that represents quite a feat," she wrote. "The task for HRMC is to look forward, continue to be successful with the increased scrutiny from regulators that is a given and to scrupulously avoid the leadership and operational systems issues that resulted in the initial revocation so that the MC can serve the community that so warmly supported HRMC during it's difficulties."

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