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Massena Memorial Hospital records $425,865 February loss

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MASSENA - Massena Memorial Hospital officials say February was not a stellar month financially, with a loss of nearly a half million dollars.

Chief Financial Officer James Smith told members of the hospital’s Board of Managers Monday night that their total loss for the month was $425,865, following a January in which they turned a profit of $37,684.

Board member Gary Borgosz, a member of the hospital’s Finance Committee, said a drop of nearly 20 percent in total inpatient discharges during February contributed to the poor bottom financial performance.

“It really affected our bottom line and led to a revenue decrease of several hundred thousand dollars (for the month),” he said. “It wasn’t a good month.”

Mr. Smith said they had budgeted 194 total inpatient discharges and finished the month with 156, which was 19.59 percent below budget. It was also 17.46 percent below their 189 patient discharges in February 2013.

Observation visits “stayed fairly flat” at 71, which was 6.58 percent below their budgeted 76, he said. They were 10.13 percent below their February 2013 figure of 79.

Total outpatient registrations for February finished 0.56 percent below budget. They had budgeted 10,339 and finished the month with 10,281.

“That compares favorably with 2013 (9,291 outpatient registrations), but slightly under budget,” Mr. Smith said.

Those figures were 10.66 percent ahead of their February 2013 numbers, he noted.

Because inpatient discharges were down, Mr. Smith their total net patient revenues were $3.4 million, which was 8.08 percent below budget.

“Other operating revenues were somewhat below budget as well,” he said.

All of those factors led to the $425,865 loss for the month, according to the CFO, who said their total losses for the two reported months in 2014 were $388,181.

Board members agreed to write off $215,447.23 in bad debt, but Town Supervisor Joseph D. Gray wondered what steps they took before writing off those numbers.

“How do you decide when to write some of that off?” he asked.

Mr. Smith said that, as a general rule, once payments are received from insurance companies, the hospital sends out statements to collect the balance.

“As a general rule, if the statement goes out for 60 days, which would give them two to three statements, and no payments have been received and no promises of payment have been received, then we’ll send out a final notice around day 75. That account will get written off around 90 days, between 90 and 110 days old,” he said.

He said that the hospital has been “pretty consistent” in staying around 2.7 percent or 2.8 percent of its gross revenues,”which is really well within the industry norms in terms of how much they write off each year. Hospitals range from 2 percent up to as high as 7 or 8 percent. We don’t want to compare ourselves to hospitals in New York City because their bad debt exposure is a lot higher than ours.”

Board member Loretta Perez wondered how the hospital knew if individuals were getting their bills. Speaking from personal experience, she said she had received a $15 bill that was nearly four years old from a collection agency, unaware that she even had that debt.

“I paid it. I didn’t know what it was for. As we sure they’re getting these bills? I didn’t,’” she said.

“We send the bill to the address the patient gives us when they come in to register,” CEO Charles F. Fahd II said.

He said that, when a patient is seen, their information is checked against their insurance, Medicare or Medicaid card. If they’re self-pay patients, they ask for other forms of identification such as a driver’s license.

“We go by the information we have,” Mr. Fahd said.

Mr. Gray wondered if patients were obligated to pay the balance once their insurance had covered their portion of the bill.

“It’s becoming rarer and rarer. But there are some that don’t have deductibles or co-pays or there’s no balance due after the insurance pays. They’re becoming fewer and fewer as times go on” because of larger deductibles and higher co-pays, Mr. Smith said.

Mr. Smith said their reimbursement for Medicare and Medicaid patients is low. For outpatient services on Medicare, he said they receive nearly 30 cents on the dollar. For Medicaid, Mr. Smith said, “We’re probably getting 15 cents on the dollar.”

“Those ones you mentioned are 65 percent of our business,” board member Paul Morrow noted.

“That’s how our bad debt grows,” board Chair Tina Buckley said.

If a patient has a balance that does not get paid, Mr. Fahd said they’re limited in what they do to collect.

“It’s frowned upon in the industry for hospitals in general to take any type of significant action against an individual that can’t pay a bill,” such as foreclosing on a home, he said. “We don’t do that.”

However, he said, there is an opportunity to recoup some of the money.

“There are regulations out there that now allow us to be bundled together with a lot of other bills that people owe so that we at least get in line and get a portion of some monies that are collected by bad accounts,” Mr. Fahd said.

He said that people previously would pay their cell phone bill, cable bill “and every other bill in the world” before they would pay the hospital. The new regulations allow the hospital to “get a piece of the pie, so to speak, at least a percentage of the pie.”

No matter if a person has bad debt from the hospital, however, Mr. Fahd said they will still be seen again if they need the service.

“Many businesses, when you run up bad debt with them, they tell you don’t come back. If we have patients in the ER or any of our clinics, if doesn’t matter how much they owe us, we’re going to see them again and again and again. It’s the nature of the business,” he said.

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