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Pagosa Mountain Hospital in Critical Condition, Part Two |
Bill Hudson | 5/12/08
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As I mentioned in Part One, I have not covered the Upper San Juan Health Services District meetings since the new Pagosa Mountain Hospital (PMH) opened in early January of this year.
At last Tuesday’s regular meeting, numerous difficulties facing the hospital were laid on the table for discussion.
One thing that became apparent early on in the meeting was that former CEO Dan Boatman, who resigned at the end of last month, had negotiated a severance agreement which included some kind of confidentiality agreement prohibiting the USJHSD board from discussing publicly the reasons for his departure or the amount of his severance package.
From the myriad of problems currently facing the board and staff, however, it seemed quite apparent, to this reporter at least, that Boatman had been a failure as a CEO. In particular, he seems to have prevented other staff from performing their jobs adequately, and he seems to have allowed the relationship between PMH and Mercy Regional Medical Center in Durango — where many of the PMH patients eventually end up for treatment. He also apparently failed to file necessary forms and write crucial contracts.
 The six members of the USJHSD board present at the meeting conducted themselves in a very professional manner during the meeting, in spite of the obvious financial crisis they are facing. Considering the statement by Chief Financial Officer Ken Johansen, made early in the evening, that the hospital might cash-flow through June but would “hit the wall” in July unless something could be done, the board — which is all volunteer — kept their tempers in check and their comments respectful.
Although the board represents considerable professional expertise in health care, business, and finance, it was clear by the end of the meeting that they were beginning to doubt their own ability to make the correct decisions about running PMH.
This was to be the final board meeting of former Chair Pam Hopkins and of Treasurer Bob Goodman; they would be replaced by new board members Jim Knoll and Malcolm Rogers.
The key issue facing the board at the moment is a critical cash flow problem — the hospital is quickly running out of spendable cash. There appear to be three main reasons for this cash crisis.
First, the hospital has, very simply, failed to send out bills to patients. The main problem seems to be that the PMH administration never signed the necessary contracts with the major insurance carriers used by Pagosa residents. Without these contracts in place, insurance companies will not pay their portion of patient charges at PMH. So the hospital now has to decide whether to charge the full cost of treatment to the patients themselves — something that the patients are certainly not expecting — or else simply write off the part of each bill that the insurance company would have paid, which would leave the hospital seriously short of cash but which might help salvage PMH’s reputation among local users.
Second, it appears that CEO Boatman never completed the necessary paperwork for billing Medicare, so all of the revenues for those services from the first three months of operation may have been lost.
Third, the staff was not adequately trained in coding the billing statements. When bills are sent to Medicare or to insurance providers without the proper coding, the bills are routinely rejected, pending corrections to the coding — and in some cases, may never be paid.
With the departure of Boatman, the board has placed operation of the hospital in the hands of Johansen and Director of Nursing Linda Mozer, who are being assisted in billing matters by Joy Sinnott, who also handles billing for the District’s EMS service. Additionally, Johansen has been authorized to hire several private consultants to address the various major problems that are beyond his particular expertise, including the missing insurance company contracts, problems with the Dairyland computer system, clearing up the problems with Medicare, and the crucial filing of the Critical Access Hospital designation.
Some board members expressed disappointment at the slow pace of the consultants, so far, in clearing up these matters.
As I noted in Part One, the USJHSD board originally decided to spend $12 million to expand the Dr. Mary Fisher clinic into an urgent care hospital — rather than simply keeping it as a clinic — because they felt certain the hospital could be designated as a Critical Access Hospital, due to its remote location. Such a designation would give PMH the right to bill Medicare for the full cost of services, rather than only a percentage as allowed for most hospitals — and at the Mary Fisher clinic.
However, administrative delays have slowed the application for Critical Access Hospital designation. At this point, the board was told Tuesday, the government agency responsible for CAH application approval is backlogged with some 600 applications, and processing the application could take 90-150 days. It’s possible that final CAH approval may now be six to nine months away — although board Chair Neal Townsend indicted that he might have a means to expedite approval.
When reporting the number of in-patient stays, Director of Nursing Linda Mozer gave the number as 35 since the beginning of the year. If I am not mistaken, the 2006 feasibility study that supported the proposal to build PMH predicted 600 in-patient stays per year, which would make this year’s total, so far, less than 20% of the predicted number of in-patients.
The board, as I mentioned earlier, is prohibited by a confidentiality agreement from revealing how much Boatman received as a severance package. The amount could have been substantial.
Listening to the sometimes painful discussion, it almost appears as if everything that could have gone wrong, financially, has indeed gone wrong.
Part Three tomorrow… |
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