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Hospital promises to 'open books'

STORY BY MEG LAUGHLIN (Week of April 10, 2014)

Indian River Medical Center CEO Jeff Susi made a rare appearance at last week’s Hospital District chairman’s meeting and assured trustees the hospital would “open the books” to them to hopefully provide answers to financial questions they find puzzling. Susi’s offer came after several trustees suggested that an investigation by a forensic accountant might be in order.

Because the seven District trustees are elected to direct property tax dollars to pay for indigent care, an unexpected and dramatic increase in hospital indigent billings has caused most of them to ask for more details about this increase.

Until Susi’s offer last Wednesday, trustees said they found responses from the hospital’s chief financial officer lacking.

“The current CFO is very dismissive of trustees and the issues they’ve brought to the board,” District chairman Tom Spackman said at the meeting in the District office.

“We know we have a need for more transparency,” said Susi.

For two months – September and October – hospital CFO Greg Gardner had said the increase in indigent bills was caused by the hospital catching and correcting a failure of its tracking system to properly identify indigent patients seeking care there.

Then, from November to the end of March, Gardner said the continuing problem was caused by an increase in local indigent patients seeking care at the hospital, which he added reflected a national trend.

But two weeks ago, Gardner explained that the spike in indigent bills – which could cost county taxpayers $2 million more than had been budgeted by the end of fiscal year 2015 – was the result of a concerted effort by emergency room employees since September, when Gardner took the job of CFO, to classify patients without insurance as indigent.

Previously, many of these uninsured patients – who were expected to pay their own bills – ultimately became bad debt for the hospital. 

But by classifying more of them as indigent, the hospital is able to pass the bill on to the Hospital District and get reimbursed.

“A good CFO catches that and Greg did,” Susi told District trustees.

Gardner’s current effort is helping the hospital get tax money for the bills of uninsured, lower-income patients, while efforts of the previous CFO to qualify poor patients for Medicaid lowered what taxpayers had to pay. 

Susi brought a graph to the District meeting that showed Emergency Room visits billed to taxpayers decreasing with previous CFO Dan Janicak and increasing with Gardner.

And, according to the graph, the number of uninsured patients who the hospital thought would be able to pay their bills – but who subsequently didn’t – declined with Gardner because more of the bills were being passed onto the taxpayers to pay.

Oddly, though, separate hospital documents show that the bad debt of uninsured patients going to the emergency room who were expected to pay their own bills has increased from $13.4 million in 2013 to $14.1 million with Gardner as CFO.

Which raises one of several questions that District trustees have: How can a graph presented by the hospital’s CEO last week show uninsured patient visits that resulted in bad debts going down in 2014, while other hospital documents show bad debt bills increasing by over $700,000 for the same period?

“We need to know what’s behind the numbers,” said District trustee Harris Webber.

“We have a $962,000 problem this year to explain to the taxpayers that we don’t fully understand. It shows signals that indicate concern,” said District trustee Trevor Smith. 

Another question District trustees have is this: If Gardner began overseeing an effort in September to qualify ER uninsured patients who couldn’t pay their bills as indigent, why did it take more than six months for him to say it – especially when District trustees repeatedly asked for an explanation of the increase in the number of indigent patients?

Susi told Vero Beach 32963 that Warren Fuller, hospital financial chief under Gardner, was overseeing the stepped-up indigent qualifying.

When asked why, if Gardner had authorized it, he didn’t seem to know about it for six months, Susi explained:  “We had a lot going on ...

“We were putting out a lot of fires,” Susi said.  “We were so busy that we didn’t know the reason for more indigent Emergency Department bills. We were distracted by so many things, but we’re doing better, and now we understand.”

After Susi offered to show District trustees more detail about the hospital finances that affect taxpayers, they decided to delay a forensic audit.

“We want the seeking of more information to be a constructive process, not negative,” said Webber.

Trustees Trevor Smith and Gene Feinour agreed to work with the District accounting firm, Morgan Jacoby, to identify questions for the hospital.

 “Getting in and understanding how the hospital ended up billing the District would require pulling patient data sheets to see if they should have been included (as indigent),” said Kip Jacoby who attended the meeting. 

While this process takes place over the next few weeks, District trustees will also be renegotiating the rate of reimbursement they pay the hospital for indigent patients.

Most Hospital District trustees have said they hope to arrive at a much lower rate than the indigent reimbursement amount which local taxpayers currently pay.

“We are very serious about our responsibility to taxpayers,” said Smith.