Wednesday, May 12, 2010

Valley Health meeting deals with growth

First of all, I like to state in my opinion, Mr. Mark Merrill is a very nice individual.  I think he'll be the best thing to happen to VHS.
There is no doubt that VHS is feeling the affects of the economy as it was featured in a story today in the Winchester Star ... Valley Health meeting deals with growth

Merrill also noted some challenges Valley Health has been facing, such as a declining demand for elective surgeries and an increase of charity care and bad debt in the last four years.

“We’ve had almost a 1 percent increase, or a $10 to $12 million increase, year-over-year in terms of our charity care and bad debt, as the economy has softened and more people have been added to the roles of the uninsured,” he said. “Hopefully, the health reform will reduce some of those uninsured.”

BUT I have much concern if VHS is doing a better job of pre-qualifying the customers.  Up until last May/June timeframe of 2009, their billing policy was not as detailed as it reads today ...

Valley Health's previous billing policy … Valley Health January 15, 2009 Financial Aid Policy  basically stated the following:

- Please pay us
- If you cannot pay us, make arrangements to pay us
- If you are uninsured, we want a deposit

I was informed of a lady right now that was paying $10 per week on an outstanding bill and VHS elected to garnish her wages.

After a friend of mine inquired with me, the perception is that this lady is a prime candidate for some type of financial assistance.  I asked … did she fill out the FIS form?  My friend stated that from what he understood that she was not aware of any such FIS form.

Currently, the middle-aged lady has the necessary forms in her possession and hopefully the outstanding debt that VHS has elected to garnish her wages for will be written off as bad-debt now since it’s already been billed.

There is a strong suspicion that this lady would have qualified for “charity-care” only IF she would have been pre-qualified.

Now here’s the kicker, if VHS is not doing the best job possible of pre-qualifying the customers, then if it’s done after the fact, after it’s been billed, that will inflate the “bad debt” figure as it’s the “charge figure” that is written off vs. the “cost figure” when “charity care” is predetermined.

Basically, if you sell a widget for $100 but it only costs you $2 to make, then for “charity care” purposes you are only allowed to write-off $2.  Once it’s been billed at the charge of $100, then VHS has to write-off $100 for bad-debt if a customer qualifies for charity-care assistance after the fact of being billed.

Now granted, there are some folks who have the ability to pay but refuse to pay as those would be legitimate bad debt expenses.
The evident perception was that if you the customer did not ask or inquire about any type of financial assistance, then VHS did not inform you.  Mr. Merrill told me in person that they are trying to do a better job of pre-qualifying the customers.

So folks, it’s up to you to ask the questions and file the necessary FIS form found in the following link …

To close, don't forget the WMC had been pretty darn profitable.

The Winchester Medical Center's profits alone from 2001-2007 increased 460%.

2001 - $11.8 million (per Quad State Biz Journal)
2005 - $54,346,679 (per IRS990)

2006 - $57,422,678 (per IRS990)

2007 - $66,617,961 (per IRS990)

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