FMH struggles with pitfalls and profits

WINNSBORO – The Fairfield Memorial Hospital Board of Trustees is looking for multiple ways to deal with the hospital’s declining revenues and empty beds, but its financial picture improves.

During the Finance and Audit Committee meeting Tuesday evening, Board members heard from the hospital’s consultants, Brent and Doug Rollins, of Receivable Solutions (RSI), which has been assisting FMH in improving its collection of money owed by patients and insurance companies. FMH trustees and management also learned ways to avoid payment denials from Medicare and insurance companies and how to attract more patients to the inpatient floor with swing beds.

It was explained that under Medicare rules, small rural hospitals can participate in the swing bed program, meaning that a bed can be used for either an acute care patient or a post-acute patient who has been discharged from a hospital stay of at least three days but who still requires skilled nursing care. For example, a patient, after undergoing heart surgery at a Columbia hospital, could be transferred to a Fairfield Memorial swing bed if they needed additional skilled care.

Putting patients into swing beds provides an important source of revenue for the inpatient side of FMH, because the rate the hospital receives is more than its normal charges.

However, during the Finance and Audit Committee meeting held before the full Board meeting, Chief Financial Officer Timothy Mitchell expressed his concern about the drop of revenues from the swing beds for the current period compared to the previous year.

“Our swing bed program has been decimated,” he said.

“The problem is not in the outpatient business, it is in our swing bed business,” hospital CEO Suzanne Doscher added.

Statistics reviewed by the Board showed that the average daily patient census for March 2017 was .52 (i.e., on some days there were no patients in the hospital) compared to 2.65 in March 2016. However, ER admissions and other outpatient admissions were up in March 2017 compared to the same month a year ago.
During the full Board meeting, Darlene Hines, Chief Operating Officer, described steps the hospital is taking to try to fill its swing beds, including an outreach initiative to identify Fairfield county residents receiving acute care services in other medical centers who could be transferred into a swing bed for continued recuperation.

The consultants cautioned that “denied claims” is another area where the hospital could lose money. Claims for payment of services can be denied by insurance companies and government payers such as Medicare and Medicaid when the hospital does not meet conditions necessary for payment, even if it provided the services.

The two biggest reasons for denial of claims, Mitchell said, are failure to obtain proper pre-authorization for a procedure or a hospital stay, and billing for a service deemed not medically “necessary”.

Board member Randy Bright wanted to know why the hospital was making these kinds of errors and asked where the gap is in terms of hospital procedures and staff training.

“Do we have the right training in place?” Bright asked.

Rollins said that insurance companies are always changing the rules on what must be pre-authorized, but noted that the hospital has more work to do and needs to do a better job in training staff to follow appropriate policies and procedures in order to avoid claim denials.

On the down side, Mitchell said that patient revenues continue to decline and are down more than $950,000 from the previous year. FMH also took a hit in March because its CAT scan machine was down for repairs. The hospital’s imaging service line is one of its primary revenue generators. However, the Board was assured by staff that the scanner is now 100% operational.

Although March was a bad month for patient revenues, Mitchell said, the hospital’s year to date financial report for March 2017 looked hopeful compared to the same period last year. Year to date earnings (before depreciation and taxes) was about $308,000 compared to a negative $847,471 in 2016. Mitchell said that in April the hospital earned enough money to meet its budget, and that it also had a significant inflow of cash due to increased collections through the South Carolina Department of Revenue G.E.A.R. program and tax refund set-off.

Finally, Mitchell said the hospital continues to cut its operating costs, which have decreased by more than $683,000 since last year.

Comments

  1. Vera Bilal says

    I worked at Fairfield Memorial from 2000- 2011, and every time I learn of the difficulties that the hospital experiences, it saddens me. Fairfield Memorial, as I recall, is a wonderful small hospital that gives compassionate care and excellent service. I do hope that the hospital can survive because the hospital is a very important resource for our community.

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