Chicago Tribune
Posted by Erika Slife : May 04, 2011
The Cook County Health and Hospital System Board is planning to shave $14 million from its budget to meet a projected shortfall, hospital officials disclosed today in a letter to the County Board.
But where that $14 million comes from remains to be seen.
“Don’t know,” said Michael Ayers, chief financial officer for the health and hospital system. “We’re meeting internally to try and make this work.”
The shortfall is blamed on a backlog of unpaid Medicaid bills worth an estimated $54 million and a slower-than-anticipated implementation of new physician and patient billing systems.
The dim financial outlook comes less than a week before health officials go before a state regulatory panel to seek approval for converting Oak Forest Hospital into an outpatient clinic. County officials have been working on the plan for more than a year, and the hospital system’s $912 million budget is contingent on Oak Forest operations being discontinued by June 1, saving $30 million.
“Hopefully, like minds will see this and we’ll move forward,” Ayers said. “If not, we’re going to have deal with it.”
The bulk of the hospital system’s budget problems stem from the state being unable to process Medicaid applications fast enough, Ayers said. As of the end of March, the state had not approved more than 11,000 Medicaid applications from the county.
Budget officials had assumed, based on conversations with state officials last summer, that Medicaid applications would have been processed faster. The state hired four additional employees in March to process the claims, but they have not been trained yet, he said.
“All of these things are outside of our control to handle. These are just estimates on what we think will happen when we have the conversations with different people,” Ayers said. “This is a whole bunch of us trying our hardest to get the claims outside the door and get them paid.”
Complicating matters is the health system’s effort to bill for itemized patient services. For decades, the health system relied on a payment process unique to Medicaid and Medicare because the majority of patients relied on government assistance. However, Ayers said the board realized that there reimbursements to be found from the government programs if the hospital system were to itemize services.
But building the new billing system from scratch – new computers, employee training, internal controls – is taking much longer than anyone anticipated, Ayers said. Only “a relatively small portion of the budgeted physician billing revenue of $20 million will be received” this budget year, according to the letter.
“We have to build and design this whole level of processes to make it work,” Ayers said. “Once that’s done, we can start capturing the services.”
The letter did note two bright spots.
Health officials believe they will receive between $20 million and $25 million of Medicaid money due to negotiations over “upper payment limits,” which is an amount determined by the difference between what Medicaid pays and what other providers pay for services. They also expect to receive $3.5 million from completed Medicare cost reports.
Neither was included in the 2011 budget.
But the findings fell on skeptical ears.
"They put their hands in the couch and found the loose change and said we’ve got $20 million here. To me, that’s the kind of unrealistic part of this letter,” said Commissioner Larry Suffredin, D-Evanston. “What I’m saying is there is inconsistency in what we’ve seen. We’re going to have a serious discussion about this.”
County commissioners will hold a hearing to discuss the letter.
Posted at 05:35:42 PM in Board president, Cook County Board
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