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Friday, July 11, 2014

New era dawns at Fulton County Hospital -- All debts are paid

Wednesday, March 21, 2012

On March 20, Fulton County Hospital received a check for $1,615,000 -- most of the proceeds of the $1,700,000 sale of its home healthcare license.

By the end of the week, $835,000 in debts were to be paid off, giving the hospital breathing room after months of living on the brink.

On March 14, the Fulton County Hospital Board of Governors held a special meeting to discuss exactly what debts are being paid with the license revenue, how much will be left over and what to do with the balance.

Acting Administrator Kim Thompson presented a plan to pay $254,000 to White River Planning and Development, which gave the hospital a short term loan for operating cash while it waited for the license sale revenue.

In addition, the Bank of Salem would receive $178,000, the balance owed on a $250,000 line of credit which had been maxed out.

The largest amount to be disbursed, $403,000, would go to dozens of vendors and contractors who were owed for goods provided or services performed for the hospital. Some have waited months for payment.

After making the $835,000 in debt payments, a balance of $780,000 will remain.

$85,000 of the sale revenue, not received March 20, will remain in escrow for one additional year, to insure the hospital should any legal claims arise relating to the period of time the hospital provided home health care.

As part of the Ozarks Medical Center agreement to manage the hospital, $150,000 will be placed in a separate account to cover its monthly $10,000 management fee.

Board members discussed leaving $230,000 in the Bank of Salem to be used for operating cash, and place the remaining $250,000 in the hospital's account with First National Banking.

Thompson told members, "This ($250,000) will be in reserve for payroll emergencies and other needs as they arise."

Board members discussed whether or not to seek a new line of credit with a bank.

Board President Bill Pace said, because the hospital had experienced trouble paying its line of credit with the Bank of Salem, "It's probably well and good that we take the line of credit out of the Bank of Salem for awhile," Pace said. "I'm talking about a bank examiner's perspective -- leave that out of the bank for awhile."

Pace suggested that, if a need arose, the hospital could negotiate a line of credit at that time.

Board members Danny Perryman and Jerry Blevins suggested that the $250,000 reserve, which is going to be placed in a bank, would be collateral to justify a line of credit.

"I'm saying you need to deposit somewhere, if you needed $300,000 instead of $200,000, somebody would work with you," Blevins said.

After discussing the plan to pay debts and how the balance would be used, Dr. Jim Bozeman made a motion to approve the plans.

"I have a motion and a second that we approve the disbursement of sale of the home healthcare license as presented," Pace said. "Move $150,000 to the Simmons Bank at Mammoth Spring, and $250,000 to First National Bank in Salem or Ash Flat. Leave the balance at the Bank of Salem."

The motion was unanimously approved.

During the meeting, Thompson mentioned one future need that will be expensive.

"Eventually, hopefully before 2013, we need to do an electronic health record, or else we'll get our reimbursement cut," Thompson said. "So, we're going to have to move in that direction at some point."

According to Thompson, a proposed contract to convert to an electronic medical record system was about $470,000. Once a contract is signed, the hospital would qualify for about $40,000 in Medicaid stimulus funds, to help pay for the system.

"That ($40,000) won't make a huge dent in that (total cost) but, eventually, we are going to have to go to an electronic health record," Thompson said.

Hospitals who do not meet the current 2015 deadline will face a penalty -- a cut in amount of reimbursement they receive from Medicaid and Medicare.

While that is an example of future challenges the hospital will face, Thompson told The News, after the meeting, that she is optimistic the hospital can generate the revenue and cost savings it needs to avoid returning to a large, unmanageable debt.

At a recent State of the Hospital public meeting, Thompson said OMC's goal is to be showing a profit at the hospital by the end of 2012.

Thompson said February was a good month financially for the hospital, and March has been good so far.

The Board of Governors will review the February financial report at its next regular meeting, on Monday March 26 at 6 p.m.

Meetings are held in the hospital conference room and are open to the public.



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