The financial crisis was tackled Thursday night during a GMH Administration board of trustees meeting.
The crux of the problem, Karuppan said, can be attributed to millions of dollars in Medicaid and Medically Indigent Program reimbursements owed to GMHA, as well as retirement fund contributions the hospital has been forced to pay as part of a settlement the government made with the Government of Guam Retirement Fund.
According to Karuppan, for the month of July, the government owes GMHA about $2.3 million in Medicaid and MIP reimbursements. In addition, he said millions more are owed for several months back.
“The allocations are given by the Bureau of Budget Management and Research to the Department of Administration and DOA does not have the funds,” said Karuppan. “So that’s basically what the problem has been. And compounding the problem with our cash flow is the retirees.”
As a result of the compromise Gov. Eddie Calvo made with the Retirement Fund in June, GMHA has been forced to make contributions to the pension agency.
The compromise would restructure GMH’s debt to the Fund by adjusting the amortized rate the hospital is currently paying in delinquent debt to the Fund. The restructuring is supposed to save millions for the government.
Because the hospital has made contributions to the Retirement Fund, the pension agency has allowed a “significant” number of employees to retire, Karuppan said.
“Which means that each time an employee wants to retire, we have to cough up the amount owed on behalf of each individual employee,” he said, adding that some of the employees have contributions over $125,000.
Last month, he said, GMHA made over $450,000 in contributions, in addition to its normal payroll cycle.
GMHA Administrator Rey Vega said contributions to the Retirement Fund alone add up to about $800,000 to $1 million by Sept. 30.
He said this is because there is a list of employees intending to retire by Sept. 30, which is another $350,000 the hospital must pay to the GGRF.
That’s in addition to $346,000 the hospital is scheduled to pay to the GGRF, based on the compromise.
