By Jerry Morgan, Reporter

VAN DYKE -- The Tuesday, March 27, meeting of the Board of Directors of the Comanche County Medical Center (CCMC) was unusual in at least two aspects. There were no closed-door executive sessions and the financial statements reported an eight month, year-to-date profit.

The meeting was conducted by Board president Charles Mazurek, and attended by members Joe Locke, John Mack Weaver, Gale Easley and Karen Carr. Mary Jane Atkins was unable to attend.
The minutes of two earlier open session meetings and one closed session meeting were approved by unanimous votes on motions by John Weaver.

Medical Staff Report

Dr. Howard Dickey, Chief of Medical Staff, was called upon for the medical staff report. He commented that there were no major items covered in the previous medical staff meeting.

Dr. Dickey reported the appointments of Dr. Guyle Donham as Hospice Medical Director and Dr. Dwayne Miller as the Radiology Medical Director, both to cover duties formerly handled by Dr. Beau McCrory.

Dr. Dickey added that the medical staff is stretched thin in covering the hospital's Emergency Room, also a result of Dr. McCrory's discontinuance of work there. He noted that consideration is being given to hiring a group of outside physicians to cover certain ER shifts, primarily in the daytime.

Miscellaneous Items

The next agenda item concerned amendments to the Comanche Community Healthcare Hospice contract.

Chief Nursing Officer Shannon Steigleder presented a requested change to the contract between the Comanche Community Healthcare Hospice and CCMC. The amendment increasing the daily charge rate for hospice patients admitted into the hospital from $350 and $250 per day to $475 per day. The change was requested to reflect rates currently in effect and in further preparation for a resurvey of the hospice department.

A new addendum to all letters of agreement between the hospice and contract staff was also presented for approval. It details the hospice's 12 requirements for independent contractors including such items as remaining currently licensed and certified, remaining current on required continuing education, complying with hospice policies, attending meetings, etc.

Karen Carr offered a motion to approve the requested changes, Joe Locke seconded and the vote of approval, without discussion, was unanimous.

Charles Mazurek then brought up for consideration a resolution to change the authorized check signers for various accounts with Comanche National Bank. He noted that the resolution provided for himself, Gale Easley and Joe Locke as authorized director signers and for Interim Chief Executive Officer Kurt Meyer, Interim Chief Financial Officer Jim Gardner, and Chief Nursing Officer Shannon Steigleder as administrative officials authorized to sign checks.

Again, Karen Carr offered a motion to approve the resolution, Joe Locke seconded, and the vote of approval, without discussion, was unanimous.

Kurt Meyer spoke next regarding the settlement of a debt of $17,932 owed to the hospital by Dr. Beau McCrory resulting from the operation of a medical clinic in Comanche. Meyer noted that the Board had authorized him to work with Dr. McCrory to seek a settlement of the amount.

Meyer reported that in return for Dr. McCrory's work in the CCMC Emergency Room during January and February, during which time he normally would have been paid $16,657, that the hospital would consider the larger debt as settled in full, at a discount of $1,275. He added that the hospital's legal counsel, Austin attorney Kevin Reed, had been consulted and approved the settlement.

Meyer noted that there was also question regarding an amount of $2,256 in telephone-related charges possibly owed by Dr. McCrory. The matter is being researched and Meyer will report on its conclusion in the future. Meyer added that Dr. McCrory believes the amount in question had been appropriately settled. McCrory has been asked to provide evidence of his contention.

There was no Board discussion regarding the report.

Progress Toward Determining Responsibility for Healthcare Costs for County Inmates

County Commissioners Jimmy Dale Johnson and Garry Steele, and County Sheriff Jeff Lambert were present at the Hospital Board meeting to represent the county's interests and discuss possible resolution of an unsettled situation regarding the financial responsibility for the medical care costs incurred by county inmates.

Inmates who are not indigent are legally responsible for their own healthcare costs, however, collections of hospital and clinic costs incurred by inmates has always been very difficult. In line with recent changes in billing practices, the hospital has been asking non-indigent inmates for a deposit to cover a portion of the charges they incur when seeking medical services in either the emergency room or the clinic.

Since inmates have either been unable or unwilling to comply, the hospital district has asked the county to cover the non-indigent inmates medical costs.

The county has long paid the full medical costs and then been reimbursed for out-of-county inmates. However, agreement over responsibility for the costs of in-county, non-indigent inmates has yet to be reached.

Kurt Meyer spoke first on the matter, noting that he and Shannon Steigleder had been in various meetings with County officials seeking an amicable resolution of the disputed matter.

Meyer noted that an offer had been made at the Commissioners Court meeting on the prior day for the hospital to provide medical services to county inmates at a 30%-discounted price.

The Commissioners and Sheriff had, in response, requested an opportunity to meet with the Hospital Board to discuss the matter.

Jimmy Dale Johnson, the self-described "new kid on the block", spoke first for the county. He expressed his opinion that since the hospital gets paid at full rate for medical services provided to out-of-county inmates, which constitute more than three quarters of the total, he believes the hospital should extend a greater discount to the county than the 30% offered.

Johnson stated, "We all have the same boss. It's better to work together than to get in a big fight over it all. We would appreciate all of the slack you could cut us on the pricing."

Garry Steele spoke next. He said, "Folks, we're dealing with taxpayer money, no matter which way we go. There is nothing black and white that I can find regarding this that's just clear cut where anybody can understand exactly what they're supposed to do. I've talked to lawyers. They are about as clear as we are.... Nobody knows for sure... There are a few things, and there are a lot of contradictions on it.”

Steele continued, “It's my opinion that the 30% discount that is offered is not realistic, due the fact that we're dealing with taxpayer money. I feel like there's some profit margin there, and if we're dealing with taxpayer money, both entities are, I don't believe we need to be double dipping the taxpayer... We feel it should be on a bare bones cost basis."

Steele noted that the size of the problem was not so large that it would cause undue burdens in either direction. He noted that the hospital needed help and added that the Commissioners certainly did not want to see it in financial difficulty.

Steele then said, "I would ask this Board to reconsider what they consider actual cost and consider the fact that they are dealing with taxpayer money and resubmit a proposal that will be somewhere in a bare bones cost area for this County. I think this will only be fair to the taxpayers."

Steele finished his remarks complimenting Meyer and Steigleder for what they are trying to accomplish and added that he was glad he didn't have their job. He also commended the Hospital Board for its work in allowing them to get the hospital restructured to where it needs to be. "We all need it and we all want it," was his conclusion.

Sheriff Lambert then spoke, noting that the Commissioners had pretty much said everything that he could say, adding that he felt the cost should be down as low as it could be.

"You all have got better things to do than keep jacking around with this, and we've got better things to do," Lambert opined.

He asked for clarification on a couple of points in the hospital's prior offer and then requested that the hospital's proposal to provide a mid-level health care provider in the jail be delayed.

Lambert said, "I hate for you all to dedicate somebody to, say two to three hours twice a month for local inmates, if we actually don't need that. If you are scheduling someone to be out here (at the jail) that could be doing other things, I'd rather they be doing that. We'd like to run a month or so to see how that's going and about how many hours we need there."

Lambert then stated his agreement with Garry Steele's earlier comments. "I don't want any of you all's jobs. You all have got a tough job. My hat's off to you, and I appreciate what you are doing."

After some Board members expressed similar sentiments about the Sheriff’s job, adding that they didn't want to have to run after escaping prisoners and lawbreakers, Kurt Meyer spoke regarding the percentage of discount.

After hearing the concerns expressed by the Commissioners on the prior day, he had looked at the ratio of hospital costs to charges as documented in the previous audit and as reported to Medicare and Medicaid.

Meyer stated that the hospital's average cost of services compared to billing rates was around 62% and that if the hospital charged anything less than that, it would create big problems with the Medicare and Medicaid cost reimbursement formulas.

John Weaver asked if the hospital could offer a 35% discounted billing rate.

Meyer responded that if the services were offered at cost, the discount rate could be as high as 38%, subject to an annual re-evaluation during the audit.

Jim Gardner noted that the revised rate would be available around September 30 each year.

Garry Steele added that annual contracts updated around that date would help the county establish its budget.

Charles Mazurek commented that he had been surprised that the cost to charge ratio had been as high as it was. He added, "I tend to agree that we don't need to be making money off of another local government entity, but for at least a couple of reasons we need to make sure we are recovering our costs.

Number one, that's our obligation to our taxpayers, which are basically the same as the county taxpayers, but that's basically the obligation. And, number two, as Kurt mentioned, about Medicare rules. I hadn't thought about that, but once he mentioned it, it certainly rings a bell."

Garry Steele asked for further explanation regarding the Medicare aspect of the situation.

Jim Gardner responded, noting that Medicare rules prohibit the hospital offering a greater discount to anyone that is not similarly available to them, and thus if the County was offered a greater discount than to Medicare, then around 80% of the hospital's business would have to be similarly discounted.

Gardner later added his opinion that the ratio would not change much from year to year, no more than one or two percent, and might go down a bit in the future as the new hospital startup costs do not reoccur.

He also pointed out that the ratio has nothing to do with collections, only to billings and to actual costs.
Garry Steele asked if the hospital would continue to provide indigent health care and to provide services to qualify inmates.

Kurt Meyer said the hospital would continue to provide the forms to the inmates and continue to work with them in qualifying. He added, "I think it behooves us to work together."

An extended discussion followed regarding indigent inmates and how the hospital will make the determination and bear the costs of their treatment.

Sheriff Lambert noted that the inmate's home address was not key in determining whether or not they were a "local" inmate, but where they were arrested. He added that the home address information provided was not always reliable in any event. Hospital officials readily agreed with that assertion.

The issue of the rate of discount and the mechanics of its annual rate adjustment was further discussed. It was noted that approximately $18,500 in total billings were involved in the previous year.

Jim Gardner suggested that the discount percentage be set according to the annual audited cost report cost-to-charge ratio and that it could be set to automatically adjust as needed, thus saving the involvement of both parties in changes that would normally only amount to a few hundred dollars in impact. His suggestion was met with general agreement.

Dr. Dickey asked about professional fees charged by physicians. He wanted to know if physicians fees were to be discounted similar or identical to the hospital discount.

Garry Steele offered his opinion that the discounted billing price should be "across the board".

Charles Mazurek replied he did not believe that the hospital could dictate professional fees charged by the physicians.

Dr. Dickey indicated that he believed the doctors in the clinic would go along with the agreed upon discount percentage between the hospital and the county. He added, however, that outside health care providers would not be affected and would charge their usual rates. He offered to present the matter to the medical staff.

Garry Steele then commented that he believed good progress had been made and that if the hospital presented a revised proposal in line with the concepts discussed during the meeting that it would be given favorable consideration by the Commissioners Court, adding, "I think we can probably move forward with this."

Sheriff Lambert also agreed, stating, "I personally would like to see it done with and everybody go on and attack bigger problems."

The three county officials thanked the Board for their consideration and then left the meeting.

Further discussion of the percentage discount for health care services ensued. Jim Gardner noted that the State of Texas requires hospitals to devote a small percentage of their business to indigent and charity care.

Dr. Dickey asked if the provision of no-cost health care to indigent inmates would be using up funds available to treat law-abiding people in need of financial assistance.

Charles Mazurek responded, "I think for the District, it's not a limited pool. It's an unlimited pool. If they qualify, they're entitled to it." He later added that the agreement with the County would not cause any qualified law-abiding citizen to miss out on needed financial assistance if they were qualified.

Joe Locke offered a motion to offer a 38% discounted rate to the County for inmate care based upon the audited cost report percentage. Karen Carr seconded and the vote of approval was unanimous.

Financial Report

Interim Chief Financial Officer Jim Gardner, who had to leave early to attend a meeting in Dallas later in the day, was allowed to make the first administrative presentation. Gardner briefly reviewed some multi-month financial trend charts.

Salaries and related costs were up slightly, described as a temporary effect related to various terminations and staffing reorganizations. The chart showing hospital staffing (expressed in a unit of measure called Full Time Equivalents-FTEs) showed a dramatic decline from 236 at the start of the year to 216 in February to 205 in March.

Accounts receivable days, a measure expressing unpaid medical services billings in multiples of an average day of hospital total revenue, are staying in the low 60s. Gardner said that the measure needs to be below 60 and that they are working in that direction.

Gardner reported that the accounts payable balances have continued to decline as the hospital is getting caught up on paying bills. The current payables balances declined from around $1.2 million to $750 thousand in the preceding month. Although cash balances have increased due to Medicare payments received, Gardner said they would decline again as the hospital is continuing to get caught up on paying bills due.

Gardner noted that the average patient days for critical care patients was 3.7, a measure he termed as very good. He said he would like to see it go lower yet.

Gardner also pointed out that the hospital actually had an operating income of $38,002 for the month, even before counting non-operating factors such as property taxes and donations.

The bottom line net income for the month was a profit of $103,857. This brought the eight month year-to-date net income total into the black with a profit of $13,247.

Only a few months earlier the previous administration had presented, and the Board had adopted, a revised budget for the current fiscal year showing a loss of $375,000 for the same eight months.

Gardner commented that the improvement in profitability was the direct result of the lower FTEs as shown on the slides. He added that they are working to develop some additional FTE measurements, such as FTEs per occupied bed and FTEs per patient discharge, numbers he said that would allow for better comparisons with other hospitals' operating statistics.

Gardner advised the Board that it had an IRS requirement for an arbitrage audit of the investment of the proceeds of the tax exempt bonds used for construction of the hospital. He said that the cost of the audit would be around $4,000 and recommended First Southwest be authorized to do the work. He added that it was unlikely that the hospital would face any significant financial exposure from the audit since the hospital's construction timeframe was relatively short. He noted that the hospital had a couple of years left before the audit would have to be completed, but that the records are more readily available now than they will be at a later date.

Charles Mazurek asked Gardner if he believed CCMC could be long term successful. Gardner, a retired financial executive with many years of experience in large hospitals, replied that there were two factors that always had to be under good control for a hospital to be financially successful. They are the FTE's and the days in accounts receivable.

"You concentrate on those two things, yes, you can make it," he responded. "You control your FTEs, you control your P&L (profit and loss). You control your AR (accounts receivable) and you control your cash flow. Those are the two big things, in my perspective, for the Board to concentrate on."

Charles Mazurek responded, "It looks like both of those things are headed in the right direction."

The directors were all smiles at the conclusion of Gardner's report.

Nursing Report

Chief Nursing Officer Shannon Steigleder noted that the new Kronos automated timekeeping and payroll system has been put into full operation and that the old time clock and timecard board have been retired. She added that a feature of the new system allows for almost instantaneous tracking of FTE's and that allows for better staffing management in relation to patient census.

Interim Chief Executive Officer Kurt Meyer added that during the implementation of the Kronos system, they realized that one of the available software modules, which provided for an automated interface of software expense with the general ledger bookkeeping software, had not been purchased. They bought the missing software and now the payroll system is being fully utilized and its results automatically posted to the general ledger.

Steigleder reviewed nursing-related developments in various hospital departments. She noted that new wheelchairs have been received for use in the hospital and that all the nurses were very pleased with them.
Steigleder also reviewed progress in correcting surveyor complaints in the hospice program. Ellen Eisenrich was credited for her work in that regard. Steigleder noted that the program currently has 13 patients, that a hospice re-survey was expected any day and that everything looks good and ready for review. She added, "I do believe it will pass with flying colors and lift the freeze on accepting referrals."

Steigleder said that there were currently 42 home health patients being served and that department was also being restructured. A survey of that program is also expected before long.

In addition the hospital is serving 22 patients in the Primary Health Care program, a Medicare program where an aide is provided for housekeeping and cooking, and 32 patients in Community Based Alternatives, another Medicare program that provides an aide and a nurse to assist with the needs of homebound patients. Another 250 patients are enrolled in the Lifeline program.

Executive Report

Kurt Meyer noted that further improvement in operational efficiency is being achieved and that the FTE number is now hovering around 200, versus around 205 at the end of April.

Meyer noted that the Kronos payroll system is a big help in monitoring and managing staffing in relation to patient load. He said that the system is allowing calculation of FTEs per adjusted patient day and that number is currently around 4.33, which he described as a pretty good number, even though there was still some opportunity for improvement.

Meyer reported that the information systems continue to be a driving factor for the administration in managing the hospital. The primary focus currently is with the telephone system. He said two separate teams are being brought in to complete mapping and wiring diagrams, as well as programming improvements.

When asked how the information technology system was currently running, Meyer responded, "I think at this point we can say that we're stable. That's all I can say about that. I can't say we're making any progress. I can't say we're going backwards. We're in a much better situation right now. And as we get our wiring diagrams then we can start adding to the system and get to where we need to be with the medications and patient records in the computers on wheels."

Meyer pointed out that eight weeks earlier they had calculated there was $750,000 in unbilled medical charges in the hospital and clinic, but that last week the figure had been reduced to only $99,000. He added that the hospital should reach a milestone of collecting over $1.3 million in March.

Meyer said that a second meeting had been held with the management of the Cross Timbers Community Health Center and that the hospital has offered that facility a 30% discount for their self-pay and radiological services patients. He described discussions identifying opportunities for cooperation between the two medical services entities and his hopes that regular monthly meetings can be continued. He also briefly discussed his involvement in seeking physician assistance in emergency room coverage.

Meyer noted that a survey of the hospital by the Texas Department of Health was expected before long. The Clinic physicians' contracts are also coming up for renewal.

Meyer reported that there are two CEO candidates coming for an on site interview on the week of April 9 with three more scheduled for later visits. After that there will be an additional round of on site visits with some physician involvement planned as well.

Meyer distributed a handout of budget planning assumptions to the Board members for their review. No changes were suggested.

Joyce McGlothlin with the Rural Development program of the U.S. Department of Agriculture was on hand for a brief discussion regarding a grant application for a new ambulance. The grant would cover roughly one third of the total cost of an ambulance that will cost around $100,000.

The hospital’s Board of Directors meeting is normally held at 12:30 on the fourth Tuesday of each month.