‘I guess we were fools’

That was the exasperated reply of Commonwealth Healthcare Corp. CEO Ester Muña to a number of reactions from the Legislature about the hospital’s decision to increase room rates effective Oct 4.

“I guess we were fools by thinking we were going to get some support from the Legislature to be able to take care of the cost of healthcare for the new fiscal year starting October. To keep up with utility costs, we had to take care of it as the government has not fulfilled the requirement of providing those funding to CHCC,” said Muña.

“Instead of criticizing why and how we did this, figure out how you can help us,” she added.

Muña pointed out that the rate hikes could have been avoided. “We knew it was coming and we were prepared for it. But we waited to see if the budget appropriation [of the Legislature] was going to come and it did not,” she said.

For the just finished fiscal year, CHCC had asked for a budget of $22 million—$16 million for indigent care from the CNMI government and $6.2 million from the federal government through Medicaid. Instead, the CNMI government allocated a budget of just $825,299 to CHCC.

That’s where the rate hikes come in. Muña said she communicated with the medical staff about the fact that they are under-budgeted and were not given the appropriation they asked for.

“We focused on hospital rooms only. We are only increasing the fees of hospitalization. People have to understand that this is not only a hospital but a health system. How do you cut costs? By [making] people come and see the doctor to avoid hospitalization,” said Muña.

The room rates increase was authorized by the fee schedule signed by Gov. Ralph DLG Torres last Oct. 4.

For patients who are sick, Muña encouraged them to come and continue to access services so that they can avoid being hospitalized. “So, in a way, the idea is not to make people sick. The idea is to try and discourage hospitalization,” she said.

Muña admits that what costs the most is hospitalization.

“From utility bills, medical supplies—all those things that is costing us a lot of money—is coming from hospitalization so we need to incorporate that cost in there so that we can be reimbursed,” she said.

Another reason why they focus on increasing room rates is to follow procedures in submitting a Medicare cost report.

“Medicare requires us to submit a cost report and in that report, you can basically determine what your cost to charges are and come out with an amount reasonable to the cost of your services based on that cost report,” said Muña.

She pointed out that the rate increase does not mean that anyone will be turned away.

“Indigents are fine. If you are indigent, we are not going to deny services because you can’t pay. We have a sliding fee that shows you cannot pay. If you can’t pay then we will put you in that category.”

Muna said the indigent population will still be cared for.

“It’s just going to be a little higher cost because what is going to reflect is basically the cost of care,” she said.

According to Muña, the reality is that it is the CNMI government who is supposed to be responsible for the indigent sector.

Since CHCC did not get the budget it was asking for indigent care, CHCC will have to find other ways to make enough money to take care of services that are supposed to be the government’s concern.

Between an insured and an uninsured person, the latter will be the most affected of all by the increase.

“We studied the population and we realized that the only people who are going to be affected are those people who can buy and afford insurance but do not. They are the ones who are going to feel this increase because they would have to pay in cash at full cost,” said Muña.

The increase in rates is also a strategy to have leverage with insurance companies to pay on time.

“In the healthcare industry when you raise your rates, the insurance company has an opportunity to come to the table, ‘If I pay you promptly, then will I get a discount?’ The reality is, we made room for contractual allowances. Contractual allowances make us negotiate with insurance companies that if they pay on time, we will give them a discount,” said Muña.

Currently, she said, most insurance companies haven’t paid CHCC and a lot of them don’t have contracts except for Aetna and they pay CHCC on time.

“We have these concerns that we are sending the claims and we are not getting reimbursed on time. The leverage that we have is we can make you pay a lower rate if you pay us on time. This is the strategy that we need in this facility if we want to get paid,” she said.

According to Muña, if people were surprised by the increase, that was not CHCC’s intention as the undertaking is legal, authorized, and whatever they do, taking care of people is the bottom line.

“This increase in rates is not going to make us rich tomorrow. This increase in rates is just making us survive because we have to recognize that there are additional expenses and we need to pay for it.”

“Rather than criticize us and argue with my decisions, I really wish the lawmakers will work with us. These doors have remained open despite the fact we haven’t been getting that money,” she added.