CHC billing to be done in-house

The recent payment plan signed between the local hospital and public utility includes a provision that would require the hospital to get billings and collection done in-house—a move seen by officials close to the issue as a back-handed way to get the hospital off the services of a private company from Guam, and possibly correct the millions of dollars gaps in services charged but not collected by the hospital, Saipan Tribune learned yesterday.

The agreement—called the “Net Metering Intergovernmental Cooperative Agreement between the Commonwealth Utilities Corp. and the Commonwealth Healthcare Corp.”—does not specifically mention the Guam provider—the Guam Marianas Collection Agency—but it contains language that would have the hospital conduct these services in-house, using savings earned by the payment plan.

“All such billing-to-collection function shall be operationally performed directly by the CHCC within timeframes established,” the agreement states.

If the hospital does not hire direct personnel or initiate a place of service billing for ambulatory patient care and ancillary services within six months, or follow provisions to generate preliminary bills for inpatient services and report to the public utility their progress on these provisions, among others, then the hospital may be found “in material breach of the agreement,” rendering the payment plan void.

A big part of the material weaknesses found in recent hospital audits have to do with billing and revenue that, for one, prompted auditors to issue a “disclaimer of opinion” in an audit covering fiscal years 2013 and 2012.

The recent payment plan agreement tasks CHCC to institute policies and practices, including clinician documentation that “operationalizes billing and collection for services at the time services are provided.”

“We were unable to determine the propriety of receivables, inventories, due to/from CNMI, accounts payable, due to related parties, accrued payroll, accrued taxes and other liabilities and related revenues, expenses and non-operating income…as CHCC could not substantiate general ledger balances due to inadequacies in accounting records,” said the auditing firm, Deloitte.

For fiscal year 2012, the auditor also stated that CHCC does not monitor account receivables for collectability and notes issues with CHCC not following up on payment.

Hospital official have defended issues with collecting to local utility officials by saying that about 30 or 40 percent of these patients cannot pay, though utility officials have doubted this, Saipan Tribune gathered yesterday.

Last week, CHC and CUC officials signed the agreement to address the $14 million the hospital owes the utilities company. Under the deal, CHCC will initially pay CUC $250,000 to settle part of the $14 million it currently owes the utilities company. The hospital will also be on the hook for minimum monthly payments of $150,000 until such time a solar power system is up and running at the hospital.