BRHS board revamps business practices

Published 12:24 pm Thursday, December 16, 2010

Contributing Writer

The Beaufort Regional Health System Board of Commissioners Thursday adopted a business management plan intended to improve the way the health system collects money owed to it.
And while it is expected to help the health system’s bottom line and improve services to the patients BRHS serves, it will stop short of providing the 30 days cash-on-hand which one hospital official described as the ideal.
“It’s a step in the right direction,” Richard Reif, BRHS interim chief finance officer, said of the plan in an interview after the meeting.
The move is also expected to bolster the health system’s position as commissioners continue negotiations next week with four potential partners over its future.
“We accomplished what we set out to do, which is build a cushion of money for the hospital which will improve our negotiating position,” said Hood Richardson, chairman of the BRHS Board of Commissioner’s Finance Committee, in an interview after the meeting. Richardson also serves on the Beaufort County Board of Commissioners.
The BRHS board voted 6-0 to authorize the BRHS administration to move forward with an Accounts Receivable Management Plan pending an overview of the plan by the board and its executive committee. Board member Clifton Gray abstained saying he did not have enough information on the plan to vote.
Board members Suzanne Gray and Edwin M. “Sandy” Hardy did not attend the meeting.
The plan, presented to the finance committee and the BRHS board by Reif, calls for BRHS to obtain a loan using its third-party accounts receivables, or money owed the health system, as collateral.
BRHS is expected to receive a minimum of $2.5 million from such a loan, Reif said.
It would ultimately be based on a percentage of the money owed the health system from insurance companies, Medicare and other so-called third-party organizations that is deemed recoverable – estimated at between $5 and $6 million, according to Reif.
The interest rate on the loan would vary according to which one of seven proposed services that are chosen but one service quoted a rate of 1.1 percent a month, according to information presented to the board.
In order of priority, the funds obtained from the loan would be used to pay the BRHS debt payment of $1.2 million to Beaufort County, provide a cushion for the health system’s payroll and negotiate with its vendors.
The board-approved plan also calls for BRHS to contract with Price Waterhouse Coopers of Columbia, S.C., to follow up on all third-party insurance accounts that are older than 30 days. According to the plan, Price Waterhouse Coopers would receive a fee of 9.95 percent for the initial group of receivables placed with the company and 8.95 percent for any ongoing receivables.
BRHS will continue to do the initial billing on these accounts. Any accounts that are not paid after 30 days will be handled by Price Waterhouse Coopers, Reif said.
The third part of the plan calls for BRHS patients who do not have insurance to pay for their health care to establish payment plans with CarePayment Technologies, Inc.
With headquarters in Lake Oswego, Ore., CarePayment is a program that enables patients to pay for hospital services at zero percent interest over an extended period of time, while giving hospitals immediate funds for patient self-pay receivables.
This program will help BRHS to improve its cash flow, reduce receivable days and dramatically increase the percentage of collected patient self-pay receivables, Reif said.
“We could get out, to a large extent, of the self-pay follow-up business,” he said. “I’m very excited about this program.”
Patients who pay for their own care owe about $9.76 million to BRHS, Reif told the finance committee.
The BRHS board is scheduled to meet Tuesday to review with its lawyer the revised proposals presented by the four suitors Brim Healthcare of Brentwood, Tenn., Community Health Systems of Franklin, Tenn., LHP Hospital Group of Plano, Texas, and Greenvile-based University Health Systems of Eastern North Carolina.
The board’s negotiating committee is scheduled to resume talks in a closed-door session with the four respondents on Wednesday.
Richardson on Thursday said he expects the board to have a recommendation by mid-January.
In other business, the board unanimously voted to approve an amendment to the health system’s contract with Hospital Physician Partners, which provides doctors for the BRHS Emergency Department.
The contract amendment includes a subsidy to be paid to the emergency department doctors on a sliding scale based on the number of patient visits. The subsidy is intended to increase the doctors’ hourly rate from $128 an hour to $150 an hour, according to information presented to the board.