Hospital Survives Threat of Insurance Cancellation

FAIRFIELD – A notice of cancellation for Fairfield Memorial Hospital’s employee insurance policy sent shock waves through the healthcare facility’s administration in January, and the hospital’s financial head has stated emphatically that the notice was both premature and unnecessarily heavy-handed.

In a letter to hospital CEO Mike Williams dated Jan. 14, the S.C. Public Employee Benefit Authority (PEBA) said Fairfield Memorial’s policy was being canceled, effective March 1, as a result of the hospital’s failure to bring its account up to date. PEBA said Fairfield Memorial had been given “a considerable amount of time to satisfy its delinquent insurance account,” and that a notice of claim suspension for employees, effective Dec. 31, 2012, had previously been sent to the hospital.

“We wrote them a check in January,” Tim Mitchell, the hospital’s Chief Financial Officer, said last week. “I think (PEBA) acted somewhat precipitously in sending the notice out. I think it was kind of unnecessary, and it created a lot of angst and confusion.”

The confusion, Mitchell said, arose from a recent change in PEBA’s collection policy, which prior to the first of the year had allowed participants a 30 to 45 day window in which to pay their premiums. As of Jan. 1, the amended policy allowed only 10 days.

“We had always run 30 to 45 days with them with no problem,” Mitchell said. “Everybody was. We were writing a check every month. We were not skipping a month.”

The 30 to 45 day time frame, Mitchell said, allowed the portion of the premium paid by employees to accrue, making payments less painful.

In February of 2012, Fairfield County Council dumped $1.2 million into the hospital’s bank account to help keep the facility afloat. The strings attached to that money included the hospital making good on delinquent utility bills, their contributions to the State Retirement System and employee insurance. Discussing the threat of insurance cancellation last month, Council Chairman David Ferguson said all those requirements were met, but that the hospital is not entirely out of the woods yet. Ferguson confirmed that the hospital had, after receiving PEBA’s notice, brought that account up to date.

“We’re not behind on our state retirement, our utilities or our health insurance,” Mitchell said. “And we’re complying with the new PEBA collection policies. But when they sent these notices out, all of a sudden we had a public relations nightmare on our hands.”

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