Monday, April 8, 2013

BEWARE of Investing in Hospitals: for CEO’s and CFO’s of Private Equity Firms.

                      The attached Crain's article speaks to the serious cash crunch facing hospitals: CFO’s lament at Healthcare Financial Management Association meeting. As an advocate for financial healthcare, I am disturbed by these voices. 

                Private equity firms should BEWARE of investing in hospitals! Before one single dollar is transferred, investors should first learn where the holes are in 99% of hospital financial statements. Unpaid accounts that should be written off, are kept on the books for years at a time as “projected income”  instead of being listed as projected LOSSES. There are reasons for this: 
                 Particularly with respect to No Fault and Workers Comp receivables,  (notoriously difficult and arduous to collect) unpaid claims are presented to CFO’s as part of a “BUCKET by CARRIER” of money “still outstanding.” Claims reports typically emphasize the most egregious payors, INSTEAD of detailing the seriousness of the individual outstanding claims by each individual dollar amount, corresponding to its date of service and date of payment (or non payment). 
                          CFO’s are not aware of the inaccuracies inherent within the “bucket” practice of course, because they focus on bottom lines: income vs expenses. Traditionally, No Fault and Workers Comp have represented a small part of the asset picture. However, with decreasing Medicare/Medicaid and Commercial Insurance payments besieging Hospital profitability on all fronts, this potential asset or loss should be examined through a much finer lens. 
                            Some hospital finance executives speak of their ability to “drill down” on outstanding aged receivables; but the reality is that 99% of hospitals do NOT have adequate systems or personnel needed to provide this detailed reporting to them, should the CFO’s even know to request it. 
                      I would suggest that going forward, CFO’s obtain monthly analyses of the hospital’s revenue performance that will incorporate true and actual No Fault and Workers Compensation collection data. The information should be sorted by dates of service and payment, per individual claim. This is the ONLY true way to determine the profitability of a hospital’s No Fault and Workers Compensation receivables, and to gain a true picture of its collection performance. Typical hospitals are losing over $5 million dollars annually on this potential asset, but sadly, they are not even aware of it. 

               There are companies available which will provide a cost free analysis of a hospital’s data to help CFO’s obtain true and accurate figures. It would serve private equity firms and hospital administrators well, to take advantage of such programs, instead of “doing it the way we always have.”  The bucket approach does not incentivize executives to improve their overall collection performance, and even more important to investors:  it is misleading.

Monday, April 1, 2013

Care Givers vs Care Takers: Why Can't We Get it Right?

There is a huge difference between one who is a caretaker, and one who is a caregiver. Lately, many people are interchanging these words. Educated people such as newscasters, healthcare providers, journalists (and even celebrities such a Oprah Winfrey), are having a hard time using the English language  correctly. 
In addition to the diametrically different connotations of being a “giver” or a “taker”, one must also consider the definitions of caretaker and caregiver: one takes care of the dead – the other takes care of the living.
        For those of us who are caregivers, and for those who are on the receiving end of caregivers’ help, the interchanging of the two words is almost offensive.      
       -- it would be nice if at least in regard to care giving, we could get it right!

Saturday, March 16, 2013

Can Hospital Boards Save Our Hemorrhaging Hospitals? Financial Statements Are Inaccurate!

How Can Hospital Board Members Save Our Hospitals? Financial Statements are inaccurate!

The problem is that Hospital CFO’s are not aware of the problem: In most instances, $5 million dollars in annual losses are buried.
Accounts receivable departments seem to be neglecting to report accurate financial losses for services rendered in No Fault and Workers Compensation cases. 

• The average hospital foregoes collection of approximately $ 5 million EVERY YEAR, 
of No-fault and Workers Compensation reimbursements. 

• Frequently, hospitals even experience a 0% payment rate for many of these services 

Many accounting clerks represent three to five year outstanding insurance covered claims as “pending payment” – when in reality, they are NEVER paid, and/ or drastically underpaid. 

The reason for this is very simple: it takes providers years to get paid, and when they do, they receive a pittance for their services. 

The tragedy is even worse for Hemorrhaging Hospitals: the problem is that Hospital CFO’s are neither aware of the problem nor how to fix it….

Tuesday, January 29, 2013

Hemorrhaging Hospitals and Profitable Providers: A Look at Ethical Negligence

Are ASC’s Ethically Responsible to notify their investors that they leave 60% of No Fault /Workers Comp reimbursement money with the carriers? In many cases, the partners can’t agree to enroll in the Program because one or more of them have “untouchables” (family member attorney or collection firms) whose services would become obsolete with the new business model.  While No Fault/Workers Compensation only represents  7%  of a typical orthopedic practice’s revenue, some partners don’t believe it is “worth it to worry about it.”  I would like to know, is it ethically negligent to leave money with the insurance companies which could otherwise be given to medical research and other charities? In my opinion, this is Toxic Money Waste.    

Wednesday, January 16, 2013

Governor Cuomo and Hemorrhaging Hospitals: Will he decide it's "no fault"?

Hemorrhaging Hospitals forgo millions annually because they are not adept at collecting No Fault and Workers Compensation claim reimbursements.  The MRT (Medicaid Redesign Team) is looking for ways to help heal New York Hemorrhaging Hospitals and to assure their viability in the years to come. Will the MRT hold  Hemorrhaging Hospitals accountable to accepting new and more profitable programs? Or, will we remain with Toxic Revenue Waste Matter  the way it has  always been because of institutional bureaucratic mentality and the need to keep the status quo: "We always did it this way."

Wednesday, January 2, 2013

Hemorrhaging Hospitals and Mental Health Claims by Angela Hart

In this recent New York Times article, the issue of mental health claims is addressed. Here is yet another area in which Hemorrhaging Hospitals need to appeal claims on a regular basis. One New York hospital lost $50,000 because they hadn't filed an emergency admittance health insurance claim on the Monday following the Friday night that the patient had been treated. .