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WINNSBORO – Even as Fairfield Memorial Hospital sheds departments and services in the hope of remaining afloat, the Board of Trustees continued to grapple with the reality of its cash shortages during the Nov. 27 Finance and Audit Committee meeting.

“The overriding theme here is that while we made some hard decisions the last meeting, our cash flow is still very troubling,” Finance Committee Chairman Randy Bright said. “We’ve got more work to do to stabilize our cash flow.”

In a special called meeting Nov. 7 the Board voted to close the Blue Granite Medical Center, the Caring Neighbors home health service and the hospital-based cardiac rehab program.

The hospital is still getting less money in the door, especially in its emergency department, which exacerbates its cash shortage. Chief Financial Officer Timothy Mitchell explained why patient collections are decreasing.

“We are doing less of the more profitable books of business/services such as imaging and rehab and more of the unprofitable books of business such as the ED (emergency department),” Mitchell said.

Second, he said the ED is getting more Medicaid and self-pay patients.

“Medicaid pays less than private insurance companies, and patients who are self-pay often don’t have any health insurance at all,” he said.

Finally, the hospital is seeing more denials because of not meeting medical necessity.  When a patient seeks primary care in an emergency room and does not present with a true emergency, the insurance company will not pay the hospital claim.”

Mitchell also pointed out that the last time the hospital received state DHS (disproportionate share) and county funds was the first week in July 2017, when they had 22.5 days cash on hand.  By October this had shrunk to 9.6 days cash on hand.

While the hospital does have enough funds to pay its key vendors and staff, Mitchell said, “We won’t have a whole lot of cash once those checks clear”.

Mitchell also pointed out the cost savings he expected would accrue with the elimination of Blue Granite, home health, and the other departments. For example, while the expenses last month of running these departments were more than $96,000, they took in only $47,000 in revenues.

“However, even taking these savings into account,” Mitchell said, “We are still looking at a large cash loss over the next 12 months…as best we can project”

The hospital’s operating expenses were 66.8 percent of revenue in October, 2016. These increased to 71.5 percent in October 2017.

The hospital experienced a net loss of $273,351 for October 2017; this did not include any bad debt recoveries.  Both the October and the November GEAR and tax set off payments will be reflected in the November financials, Mitchell said.  Daily gross patient revenue was also off in October, down to $39,578 from $45,227 the previous month and from more than $51,000 per day in October of last year.

At Mitchell’s suggestion, the Board moved $125,000 of the $517,000 in Board-restricted cash to the hospital’s operating fund. Board-restricted cash is money the Board has previously set aside and that the hospital cannot use without the Board’s permission.

“It would be difficult to get through December without tapping into these reserves,” Mitchell said.

Also based on a recommendation from the Finance and Audit Committee, the Board approved an increase in the prices charged by the hospital based on a charge master review that was completed last year. This would result in an overall 17 percent increase in FMH charges.

Hospital CEO Suzanne Doscher updated the Board on the closing Blue Granite and the FMH’s home health and cardiac rehab services. She said physicians and patients have been provided with notifications about the closure, and the goal is to complete care or transition care to other providers by year end, Doscher said.

The five employees who are losing their jobs have been formally notified with letters, she said, and the hospital is actively helping them find new jobs.

No nurses have been notified yet since the hospital is working with them to see who can fill vacant positions within the ER, she said. The transition will be finalized within the year, Doscher said.

The Board also heard a presentation from Dawn Catalano, the executive director of the FMH Foundation.  She reported that since its inception in 2010-2011, the Foundation has donated $418,090 in total contributions – cash, grants, and items – to the hospital.

Finally, the Board approved two motions after coming out of executive session:

Approved the Hospital Transformation Agreement (Nov. 20, 2017) which would supersede the Board’s prior approval of the Hospital Transformation Agreement (Oct. 5, 2017), and

Authorized Board Chair Catherine Fantry to sign the Hospital Transformation Agreement on behalf of the Fairfield Memorial Hospital Board of Trustees.