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Hospital Specifies Funding Request

The Juan F. Luis Medical Center’s interim chief executive officer continued to sound the alarm on the hospital’s troubled finances at a hearing of the Senate Committee on Health, Hospitals, Humans Services and Veteran’s Affairs on Wednesday.

Since declaring a financial emergency in March 2011, hospital leaders have lobbied the Senate for greater appropriations to help cover operating costs, but to little avail. The issue is once again coming to a head as the Senate prepares for its summer budget hearings at a time when decreased government revenues could mean deep cuts to government agencies.

In his testimony Wednesday, Dr. Kendall Griffith presented the most detailed list of budgetary requests the hospital has offered so far this year.

Specifically, the hospital would like to see:
– A rollback of the 5 percent budgetary cut instituted by the Office of Management and Budget earlier this year;
– An appropriation that fully reimburses the hospital for the cost of treating uninsured patients;
– A special appropriation to cover debt owed to the hospital by other government agencies. Griffith calculated that amount at just over $6.8 million;
– A special appropriation of $4.2 million annually to compensate the hospital for caring for long-term patients who remain in the hospital due to the lack of adequate outside facilities;
– Enabling legislation that would allow the hospital to enter into public/private partnerships to generate additional revenue;
– A $10 million cash infusion.

Griffith said only half of the $10 million would go towards settling the hospital’s estimated $35 million debt. The rest would go towards making improvements to the hospital’s facilities and equipment to allow doctors to perform more procedures, and towards funding new revenue generating projects, such as the constructing an outpatient surgery center.

Griffith objected to the characterization that the funding the hospital was requesting was a bailout.

“We are not seeking a bailout, but actually requesting what is due to us from the central government,” he said.

Griffith contended that historically the government had not met its obligations under the V.I. Code to “compensate the facilities for otherwise uncompensated care.” The cost for uncompensated care for Fiscal Year 2013 has been estimated at over $30 million, while the hospital’s appropriation, after the budget cut, was less than $19 million.

“While we do receive government appropriations, those appropriations are wholly inadequate for the level of care that we are expected to provide,” Griffith said. “This body and other decision-makers need to be aware that any reduction in appropriations is directly linked to an equal reduction in health care services, which impacts our regulatory standing and reimbursement.”

Sen. Nereida "Nellie" Rivera-O’Reilly said she understood these were longstanding issues and that she had heard similar testimony from hospital executives for the last four years. She chaffed at the assertion that this was primarily the fault of the government for underfunding JFL, however, saying the hospital could “better deploy its resources.”

O’Reilly expressed specific concern about the practice of not charging for care performed by locum tenens physicians, short term contract employees brought in to cover for staff doctors when they are on vacation or otherwise unavailable.

Deepak Bansal, chief financial officer at JFL, explained that this was an oversight the hospital was working to fix. He said the issue stemmed from the way JFL bills for care.

Bansal said that for every procedure there were two separate charges, the professional fee, which reimburses the doctor for his time, and the facility fee, which reimburses the hospital for supplies and other expenses.

Under their agreement with the doctors’ union, the hospital bills for the facility fee but doctors are allowed to collect the professional fee themselves to augment their salary (physicians working the emergency room are not allowed to participate in the practice and receive a higher salary accordingly).

Bansal said that for locum tenens physicians, the hospital was entitled to their professional fee but that, until recently, their billing department had not been set up to capture these fees.

Griffith said the problem had been identified and they would collect this revenue going forward.

Several of the senators also took aim at the hospital’s termination of 24 employees in April during their latest round of layoffs.

Sen. Alicia “Chucky” Hansen claimed that the “last in, first out” policy was not followed in identifying those to be laid off, citing 34 employees that had been hired since Griffith took over as interim CEO who were not affected by the layoffs.

Ellenor Paul-O’Neal, the head of the hospital’s human resource department, explained that all of the 34 hires were in “critical positions,” which were exempt from the layoffs.

She said 12 of the hires were registered nurses, seven were medical support staff, three were physicians, eight were billing specialists, and one was a construction job mandated by the Centers of Medicaid and Medicare Services as part of their plan of correction. The hires also included a security guard, an executive assistant for the CEO and a “retrospective analyst” who aided in reviewing charts for billing.

Griffith further pointed out that 20 of the hires actually saved the hospital money. The 12 RNs replaced higher paid travel nurses and the eight billing specialists were brought on in an effort to bring billing services in-house and cancel a costly contract with an outside billing firm.

Griffith estimated the savings from the change in billing practices at $80,000 a month.

No votes were taken regarding the hospital’s finances at the hearing.

In other business, the committee heard testimony on a bill that would rewrite the law governing chiropractic care in the territory and expand the scope of practice of chiropractors.

Sen. Samuel Sanes, the bill’s sponsor, said the goal of the bill was to update the law to bring it in line with modern chiropractic care, which has expanded to include guidance on nutrition, exercise, weight reduction and stress counseling.

The bill would allow chiropractors to sell herbal supplements from their offices, expand their ability to order x-rays, allow them to perform routine physicals to assess a person’s ability to participate in sports, update the requirements for licensure and change the composition of the Board of Chiropractic Examiners to include four chiropractors and one layman instead of two chiropractors, two physicians and one layman.

Frank Odlum, chairman of the Virgin Islands Board of Medical Examiners who testified by telephone, raised several concerns about the language of the bill. He said portions of the law were too vague and could lead to abuses.

Odlum said that one section, as written, would allow chiropractors to treat fractures and dislocations, things he felt were outside of their scope. He was also very concerned about the language surrounding routine physicals, saying nothing in the law established the scope of those examinations and they could conceivably include rectal and vaginal examinations.

Dr. Malcolm MacDonald, a chiropractor testifying in favor of the bill, said Odlum’s concerns were overblown. He said the law was not written with the intention of rectal or vaginal examinations and the issue concerning fractures and dislocations arose from a typo.

Sen. Clarence Payne also raised several concerns in the form of a lengthy amendment, which was circulated but never introduced.

During a recess, Sanes and Payne were observed discussing the amendment and afterward Sanes called a vote on the un-amended bill to send it to the Rules and Judiciary Committee. He explained that the amendment and other concerns would be further debated after everyone involved had time to study the document and consider the concerns raised in the hearing.

Voting for the measure were Sens. Payne, Sanes, Hansen, Terrence “Positive” Nelson, Craig Barshinger and Tregenza Roach. Sen. Kenneth Gittens was absent at the time of the vote.

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