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Massena councilman questions need for audit of hospital billing

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MASSENA - The CEO of Massena Memorial Hospital acknowledged this week that the financially struggling hospital could stand to improve the speed and accuracy of its billing.

“We’re not the first hospital that has billing issues,” Chief Executive Officer Charles F. Fahd said this week at a hospital Board of Managers meeting.

He said that, like other hospitals, Massena Memorial suffers from the loss of longtime employees who were knowledgeable in areas such as Medicaid, Medicare and commercial insurance.

“If you’ve got a Medicare biller that retired, number one, you may have to hire two people to replace her and, number two, you lose all that experience,” the CEO said.

“We have issues with staff more often than we’d like to,” Mr. Fahd said. “We don’t have a very deep financial staff and billing staff. If somebody leaves or is on vacation, it takes us quite a while to back fill that. We’d like to get our bills out quicker so that they’re more accurate. Sometimes that doesn’t always happen.”

The Board of Managers of the municipally owned hospital, which lost $3.3 million last year and has cited state pension costs as part of its financial problem, has recommended turning the facility into a nonprofit organization. Some employees and residents have questioned whether internal reforms could be made short of privatization to improve the hospital’s finances.

Councilman John F. Macaulay said the town board has been fielding questions from residents about the hospital, and he turned to hospital officials Monday night to try to answer some of them.

Among them was whether the hospital has had auditors review its billing practices. The Board of Managers agreed Monday night to write off $227,690.04 in bad debt for March.

“There are a lot of alleged statements that we make a lot of mistakes in our billing. Our board can’t answer that. I just thought I’d ask tonight, is there any formal audit that we do, whether it be internal, external or not, on our billing practices?” Mr. Macaulay asked.

Mr. Fahd said the hospital doesn’t have audits done specifically to look at its billing procedures.

He said the hospital routinely receives questions from patients about their bills, such as why they were being billed now for something that happened six months ago.

“That’s an excellent question. We have to find out why. So we’ve made some changes with our collections. We did hire some outside collection agencies to help with that process,” Mr. Fahd said.

That didn’t work out well, he said, and the work was brought back in-house.

“We continue to have some issues in the billing department ... Can we do better? Sure. Are we going to do better? Absolutely,” he said.

He said the hospital has identified areas where it can improve, including the hiring of the appropriate people in the department who ensure the billing is being done properly and sent out in a timely fashion.“We have seen our days in accounts receivable go up, then they’re gone down, then they’re up, then they’re down. We’re working on that,” Mr. Fahd said.

Board of Managers member David M. MacLennan wondered if the hospital should consider doing an audit of its billing procedures. Chief Financial Officer James L. Smith said he didn’t recommend it.

“I don’t think there’s a need for it. I’m not aware of a lot of hospitals that get into that level of details,” he said, noting it was receiving assistance from reimbursement analysts in Syracuse and various public accounting firms.

Mr. Macaulay wondered if samples files were examined each year to see if the billing was done correctly.

“We have a corporate compliance program,” Mr. Fahd said. “Records are reviewed for accuracy. If mistakes are made, we’ll certainly correct them. But we rely upon our auditing firm that comes in and spends quite a bit of time here looking at our financial statements and making sure they’re correct.“They come in, they give a full report, an undisclosed report. They give a disclosed report to the Audit and Compliance Committee. They have the ability to ask any questions they want,” he said.

That report is then presented to the full board of managers for a 30-day review.

“Certainly if the board has an issue with anything in that report, now’s the time to bring it up to the auditors to make whatever amendments,” Mr. Fahd suggested.

Mr. Macaulay wondered if there had been any “major audit comments” during financial audits over the past few years, “saying your financial statements varied greatly from what they audited.”

The councilman said he was curious because a recent report by Freed Maxick Healthcare to study the conversion to a not-for-profit facility noted that their recommendations were based on audits conducted at the hospital.

“Very rarely do they have a strong recommendation,” board member Paul Morrow said. “They rely on the information they compile. The ones who do all of that, they give us a pretty good detailed study.”

Mr. Fahd said that, when auditors present their report to the Audit and Compliance Committee, he and Mr. Smith are present as guests.

“They allow us to be in there to hear the report. Then we’re usually excused from the meeting so the Audit Committee can discuss anything they need to discuss,” he said.

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