Torres denies overlap in 2 contracts for hospital billing services

Commonwealth Healthcare Corp. board chair Joaquin Torres confirmed yesterday the existence of two contractors that are both working on the billing and collection services of the public hospital but denied any overlap in their functions.

The corporation signed a contract with Idaho-based International Consulting Services LLC last Feb. 28, even as it has an existing contract with Guam-based Guam Marianas Collection Agency, executed by the then-Department of Public Health on Nov. 1, 2010.

Torres said that billing and collection is only one part of the scope of work being done by ICS and its focus is only on the present and future collectibles of the Commonwealth Health Center. GMCA’s scope of work, on the other hand, covers “old” hospital receivables, he said.

“No. These are two different derivables. ICS is for the revenue cycle management while GMCA is solely for old receivables. Let’s not compare apples and orange here,” he said yesterday.

ICS is also tasked to establish a “revenue cycle management” for the corporation, which includes updating its charge master machine to update the rates of each service at the hospital, according to Torres.

ICS’ scope of work-called “derivables”-covers 14 areas, while GMCA will work on CHC medical/dental billing and all of its collection services for unpaid hospital bills. ICS is paid on commission at 11 percent in the first three years of its contract and 11.5 percent in the last three years. GMCA is also paid on commission at 10 percent.

Torres believes that having two contracts is not costing the corporation a lot because payment will be made only when something is actually collected by these companies.

He emphasized the need to realize actual collections and revenues for the hospital.

Corrective action

Torres came to the defense of Healthcare Corp. CEO Juan N. Babauta’s decision to hire ICS despite admission that the corporation did not follow procurement regulations such as the absence of bidding process.

The Office of the Attorney General recently declared the ICS contract unlawful after it failed to meet the statute’s requirements. Torres said that Babauta and the board are taking “corrective actions” since yesterday and have 45 days to do so.

He is hopeful that things will be resolved within the time allowed by the OAG and said that the review and signature of the attorney general will now be incorporated in the new document.

“I think we’re missing the big picture here. This is to help address the present crisis in the hospital by improving the system and its revenues and we’re confident these people will help us turn around CHC,” he added.