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Thursday, Apr. 28, 2016

Fulton County Hospital receives 2009 audit

Thursday, December 3, 2009

The Fulton County Hospital Board of Governors met on Monday, Nov. 23 and began their meeting with a tour of the new swing bed hall and a look at the hospital's two new ambulances. "We're going to open the swing bed unit next week," said Administrator Joe Hammond. "The guys from maintenance did all of this work in house. They have just done a great job."

The two new ambulances are quite a step up from the previous vehicles, featuring a larger patient box and brighter LED lights to make them more visible on the road. They also have dual tires in the rear for better stability on county roads.

Once the board returned back to the meeting room, John Ed Welch and Karen Moore from Hughes, Welch and Milligan presented the board with their audit of the hospital's 2009 financials. The hospital's fiscal year begins on July 1 and ends on June 30.

"We have audited the financial statements of the Fulton County Hospital, and because the hospital had expended some federal funds from the USDA loan in excess of $500,000 in this fiscal year, we had to do an A-133 audit in addition to the main audit to review internal controls and make sure the funds were spent in the way the government intended," said Welch. "Our opinion letter says the hospital did everything they were supposed to do. It is an unqualified opinion which is the best opinion that you can get."

According to the report, the total assets of the hospital increased by $761,000 and operating revenues increased by $2,400,000. On the downside, operating expenses increased by $2,386,000 and the hospital borrowed an additional $1,975,000, including direct borrowing and the capital leases of some items.

Patient discharges decreased from 1,000 in 2008 to 954 in 2009. Salaries increased by a fairly significant amount, of $958,000. "That was a key factor to net income not being as healthy as we would have liked to have seen," said Welch. "Net operating income dropped from $429,000 in 2008 to $248,000 in 2009. That's the bottom line."

On a positive note, net patient days in accounts receivables dropped below 60, which according to Welch was very good. Capital assets again increased from $8,568,000 to $9,330,000. "Net patient revenue went up, which is good," said Welch. "Our other revenues went up a little, but expenses went up considerably. Operating revenue increased $30,000. Sales tax revenue went up a bit. Interest expenses were roughly $309,000. Our net non-operating revenue went down $210,000."

Fulton County Hospital, much like other critical care access hospitals, is heavily reliant on Medicare and Medicaid. "The rates on Medicare are like throwing a dart at a moving target," said Karen Moore. "Traditionally, Medicare and Medicaid try to pay us what they think they're going to owe us by the end of the year by looking at data that's two years old. So, it's very difficult to get that right on the money. Medicaid in particular does not pay us well on outpatient. They pay us based on a defined fee schedule, which makes it an important receivable for critical care access hospitals and that is also the case here. In this case, we owed Medicare $88,000, but Medicaid owed us $265,000. If utilization decreases dramatically, it's always good to do interim reporting, so that we can present that and get adjustments to our rate during the year, so there is not a big swing at the end of the year. Medicare proposed doing that because they are judged too as to how well they pay providers. They would just as soon pay you right on the money."

Full-time employee's have increased from 109 to 133. Days in ER have gone down from 83 to 58. The hospital spent $1.1 million on equipment, with the CT Scan being the big item there along with the new software.

In their management letter, Hughes, Welch and Milligan had a couple of recommendations. One had to do with cash, and that had to do with segregating the duties of cash from check signing, depositing, and reconciling with banks. "We'd like to see those duties broken up among different people to have more controls," said Welch. The purpose of internal control is to provide some additional safeguards over your assets with the hospital; however any internal control that you implement, you need to make sure that the cost of implementing that internal control does not exceed the benefits you might derive from the implementation."

Welch also noted that as of June 30, 2009, out of nine similar-sized critical care access hospitals, only two made a profit and Fulton County Hospital was one of them.

With that, Welch and Moore left and Hammond began the look at October financials.

"Our cash is down significantly for October," said Hammond. "Our patient accounts receivable is running at $3 million dollars right now. We have put a significant effort into reducing that. Cases awaiting coding or diagnosis to be coded is $549,749.09, pending right now. We have close to a million dollars out in self pay accounts, and I am handing that over to a collections business to secure that for us. They'll be charging us about 8.6 percent of the total collected."

According to Hammond, those accounts that are over 120 days will automatically be dropped into the aggressive collection budget. Currently, the hospital's year to date figures show a loss of $377,318.00.

Hammond then went on to explain his rationale for the push for more swing beds to help the hospital's bottom line. "We're partnering with the physical therapy department, and this is why I'm making an aggressive move into the swing beds," said Hammond. "If you see the increase just over this past year, just in outpatient services alone, beginning in October of '08 with 274 visits, a peak of 725 in June, and still running strong in September with 662 and October with 642. The swing bed numbers are also increasing over the last several months. The core set of therapies for swing bed patients are physical therapy, speech and occupational therapies. By putting this program into high gear down here, we're partnering with a service that has a great reputation not only in this area but in this region. To have speech and occupational therapies available for our patients down here in a facility our size is pretty much unheard of in rural health. I have every expectation that it will provide a significant return on our investment. "

Hammond also explained to the board that he hopes to structure a true swing bed program for the patients in the hospital. "That inpatient hallway is not terribly conducive to getting patients out to walk with them, providing the activities that a true swing bed program is supposed to have, according to Medicare rules and guidelines. So, by making the swing bed hallway available for them, it gives them a lot more room to ambulate. The room down there that had been an office is going to be the activity room for these folks. I think we're going to be able to do a much better job with this population, whether it be for a new hip, a new knee, cardiac rehab, or any of these things. I would like very much to see us do something very similar down here on the inpatient hall, a little at a time, to make it a more attractive and appealing experience for our patients."

On the topic of physician recruiting, Hammond reported that Dr. Peter Bee came for a visit and enjoyed the hospital and the area, and is very interested in coming to Salem. However, he is a National Health Services Corp scholar, and as such, a hospital has to have a HPSA score of at least 17 for him to accept an offer. Currently, the hospital's score is 6. Hammond explained that he would be calling the decision maker in the process and seeing if a waiver is a possibility to be able to place Dr. Bee at the hospital.

"I have also spoken with a podiatrist who is very interested in doing some outpatient work here," said Hammond. "I look forward to speaking more with him. He already comes up to this area, out of Little Rock, and would be a great service to offer to our patients and to the local nursing homes."

Dr. Griffin Arnold then gave his chief of staff report to the board. He reported that overall, the hospital is doing fairly well. "The biggest thing being worked on right now is trying to get the charts fixed and a set routine to get that done. Also, our dictation system for some reason has skipped a few of the discharges. The whole chart cannot be billed until that is done. The other thing that is being worked on is that a chart is considered incomplete until it's all been signed, with all of the signatures on there. That's another thing that we're working on, after it's dictated and typed up, the doctor has to sign off on it to make sure it's OK. That has to be done on a regular basis, and that includes all of the physicians and active staff here. It takes the hospital as a whole to make this procedure work."

The board then went into executive session and upon returning to regular session, made a few motions. The first authorized Hammond to look into the purchase of an ultrasound lab for the hospital. It's expected that he would present his findings at the next board meeting. Next, the board approved active staff status for Dr. Daniel Valek and consulting staff status for Dr. Evan Wood. Finally, Dr. Kousas and Dr. Gray, who have been rounding on Dr. Bozeman's patients from time to time, have been given full active staff membership.

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