HAGÅTÑA (The Guam Daily Post) — The Guam Memorial Hospital has $30 million worth of outstanding bills with a number of vendors.
Most of those unpaid bills are already around 120 days old, Chief Financial Officer Yuka Hechanova told lawmakers this week. A large chunk of that obligation is made up of payments to travel nurses owed for the months of February and March.
Lawmakers called in hospital leadership to discuss their financial position Wednesday, as part of ongoing talks on the government of Guam fiscal year 2024 budget. The large obligation by the hospital has some senators worried vendors will stop doing business with the hospital authority, but hospital Administrator Lilian Perez-Posadas assured lawmakers her team is trying to work around the issue.
As of June, GMH was tracking a net loss of $8 million for the current fiscal year. The hospital also is getting $14 million less than what leadership said was needed from the Healthy Futures Fund to keep up with rising expenses next fiscal year. The fund collects a fixed amount from local business privilege taxes for GMH, and not enough tax revenue will be coming from that source to support the hospital’s needs.
Health committee co-chair Sen. Joanne Brown asked whether the hospital could afford to pay off the $30 million obligation to vendors.
“The cash flow is an issue. And so the short answer is, right now, no,” Hechanova said. “We do pay whatever we can. But we don’t have, you know, the $30 million sitting around right now to pay off all those vendors.”
GMH’s cash woes come in large part because of the cyberattack that shut down the hospital’s network functions – including billing – in March of this year, Hechanova said.
All told, the hospital has about $50 million in outstanding net accounts receivable, or money owed to it, including $23 million worth of bills that have yet to be sent to the parties that owe the hospital. Insurance companies won’t readily pay out that entire sum, either, and an unspecified amount of money has been forgone entirely due to billing being too late.
A new electronic health records system is meant to speed up billing, and it does help, GMH officials said, but hiccups have caused billing errors that require workarounds or cleanup by billing staff, who are now authorized for overtime in order to deal with the backlog of unsent bills on GMH’s end.
Hechanova said the hospital has been working with the vendors and asking if they can take partial payments in order to keep them working with GMH. She said that “a lot of them have been very amenable to that.”
“As a matter of fact, they really say, ‘Just move the account, just make some kind of payment. It doesn’t have to be the whole thing, but just keep the account moving.’ And they’ve been able to supply us with what we need,” she added.
Perez-Posadas, upon questioning from health committee chair Speaker Therese Terlaje, said the hospital is facing issues acquiring certain medical supplies.
“We look for other sources of vendors who can provide us those similar types of supplies, and so we work with those different vendors,” Perez-Posadas said. “But there are certain vendors who we have working relationships with and we regularly order supplies from them.”
‘Very concerning’
Terlaje said she was concerned about the resurfacing of the issue with unpaid vendors, which was a problem when she first became a senator in 2017.
“I’m also very worried because I am also hearing from people that GMH is not paying its bills,” Terlaje said. “We’ve got vendors that are not happy, that are threatening not to do business with GMH, and that’s very concerning.”
She also said constituents have been talking about the hospital having issues obtaining wipes and diapers for its nursery, though Perez-Posadas did allude that any issue with getting wipes at the hospital was not procurement-related, but due to problems that diapers and wipes cause the GMH plumbing system.
Perez-Posadas said Gov. Lou Leon Guerrero is working to get the hospital the $2.1 million the Department of Corrections owes it for medical services, and has identified another $6 million that can be transferred to GMH.
The hospital is now looking to control its overtime to deal with expenses, and is working with the Department of Public Health and Social Services to get patients who are unnecessarily placed in acute care beds into some kind of long-term care – a problem that costs GMH $3 million to $7 million a month.
Hechanova added that the Federal Emergency Management Agency is expected to pay about $4 million in reimbursements to the hospital next fiscal year, inclusive of payments to travel nurses.
New consultant needed?
Sen. Will Parkinson questioned whether the hospital should return to having a consultant handle billing and hospital revenues, as it did until previously with MedHealth Solutions.
MedHealth came on board in 2021 to help GMH deal with its billing issues, but the hospital terminated the contract in November 2022.
Parkinson noted that GMH had reduced its net losses, from $10 million in fiscal 2020 to $1.8 million in fiscal 2022, before it terminated the MedHealth contract.
Hechanova said the consultant had helped restructure the hospital’s handling of revenues, but said the contract was not meant to be a long-term solution. GMH was looking to train its own staff to take over, especially as the third-party vendor was handling “really basic processes” that hospital staff should be familiar with, she said.
Parkinson replied that potentially tens of millions of dollars was being left to insurance companies due to the billing issue.
“While I appreciate the need to get that in-house, if we are having significant amounts of uncollected billings, maybe we should consider going back to a vendored system, at least for a little while longer,” he said.
Perez-Posadas said the hospital has recently gone from having three largely untrained billing staff, to 12 employees who are all certified.
Yukari Hechanova, right, chief financial officer at the Guam Memorial Hospital Authority, answers questions from lawmakers Wednesday, Aug. 16, 2023, during legislative session at the Guam Congress Building in Hagåtña.
