Board Minutes Show Hospital Struggling Financially
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By Mike Scott
A tumultuous week at Scotland County Hospital saw several changes in the top leadership at the hospital. Just days after announcing Meagan Weber and Brent Peirick as Co-Chief Operating Officers (COO) of the hospital, Weber took over as hospital’s Chief Executive Officer (CEO), leaving Peirick as the hospital’s COO.
The Memphis Community Pharmacy, located on the Scotland County Hospital campus, abruptly closed on Wednesday, August 17.
Former CEO Randy Tober, and former Chief Financial Officer Michael Brandon, along with the Chief of Human Resouces, Terri Schmitt, no longer appear in the staff listing on the hospital’s website in their former positions.
The Memphis Democrat and NEMOnews Media Group have requested the hospital’s board minutes from the months leading up to last week’s events. As of our press deadline, we have received minutes from the May 31, June 15, and June 28, 2022 meetings. (These minutes are available online at www.memphisdemocrat.com. Just click the date highlighted above) We have also requested minutes for all July and August meetings, but have not yet received those minutes.
We also presented several questions to Weber, which she declined to answer at this time (as explained in “Online Investigation Reveals Scotland County Hospital Staff Changes”) on Page 4 of the Memphis Democrat. (Or click the link) The May and June board minutes paint a picture of an institution struggling financially, and a board of directors looking for ways to turn the situation around-quickly.
The May 31 minutes show a year-to-date net loss of $3,297,525, compared to a net profit of $2,175,576 for the same period last year.
The board also discussed recent billing complaints:
“1) Lengthy discussion on recent billing cycle and recent complaints, some replicas of past errors which had been presented to L. Fulk.
i. Trueblood suggested responding with a hand written apology to each appropriate billing errors with a remedy.
ii. Authentic public outreach initiated for acknowledgement of errors.
iii. Anticipation of continued improvement, per M. Brandon once all in house employees are fully trained. It was suggested that a single employee be designated to focus on follow up claim denials.”
In the Administrative section of the minutes, one topic was to research where referral of service that could be provided at the hospital go, and to find out why, and if the practitioner was suggesting them.
Under “Old Business” the board received an affiliation update with Blessing Health Services. The minutes state that “the want to continue long-term friendship and relationship, feeling SCH was on the right track with service needs and community commitment. Cannot commit to near term financial support, though still interested in a long term relationship.”
In Executive Session, board members discussed the COO position, internal posting and recruitment sites.
At a special board meeting held on June 15, the board reviewed Service Lines. A “lengthy discussion on adjustments which were made in reduction/elimination of contract nursing, reimbursements/contractual adjustments and possible increases in charges” was held.
A number of short term possibilities were discussed in a section titled “Modifications”, including “Eliminating all new OB bundles. Continue service on existing contracts. Announce suspension/termination of OB service deliveries at a later date.”
Long term actions discussed include:
“Discontinue deliveries, continue to of 0, 2, 4 Trimester prenatal, early antenatal and great postpartum care, reduce inpatient beds/emergency surgery”
“Aggressive ramp up other outpatient specialty services (general surgery, Gym ENT, pain management, pulmonology, ophthalmology) and stabilize Family Medicine”
“Modify inpatient coverage with emphasis on tele hospitalist as attrition and finances dictates”.
The Executive Session of the June 15 meeting included a “Discussion with Hannibal”, “Continued positive conversations with BHS”, the review of a COO applicant and a contract update with Family Practice.
The board met again on June 28, in its regularly scheduled June meeting. The financial report showed a YTD net loss of $3,529,770, compared to a TYD net profit of $1,665,647 in 2021.
The board heard updates on USDA Emergency Healthcare Recovery funding, FEMA funds for reimbursement of agency nursing costs, consultant assisted retention funds recovers, amended cost reports for 2019 – 2021 and following progress of Scotland County funds through American Rescue funding. It was also reported that the hospital had “received Medicare cost report settlement funds, approximate $600,000.”
In “Old Business” the board continued its Service Line discussion. The minutes read:
a) High-cost low revenue/utilization areas discussed.
b) OB bundle. Average cost $3700/package. Normal charge approx. $10,000 (utilities, dietary, nursing, supplies, administrative (cost reporting, etc.) These types of expenses are dispersed to all service areas proportionately.)
c) Anesthesia costs, call coverage.
d) Recommendation by Dr. Tobler, as a contingency plan, to suspend OB services at some point, pending the evaluation of Stroudwater/NRHA consultant results,
e) Two more resignations in ED and Med Surg which will increase the need for continued utilization of travelers. Last contract for travelers was expected to terminate in September. Now, without new hires, travelers will need to be continued even with suspension of OB.
f) Current revenue patterns should generate 4 months payroll coverage.
g) Lengthy discussion followed over previously illustrated areas.
i. Volunteer salary cuts from practitioners if certain call responsibilities result from program changes
ii. Uncontrolled utilities.
iii. 12 hour/daily Urgent Care was presented as a turnaround component at a rural Iowa Hospital
iv. Important to have dollar amount in savings with closing of OB, or decreasing Med/Surg beds. Projected net impact on SCH financials desired.
h) Chairman Fulk voiced her ongoing concern of suspending important service lines. Heartbreaking decision to make with OB. Her opinion, at this time, it would be smart to have the Stroudwater evaluation but to be prepared to make the OB service change if their opinion is same. This is along the same lines as discussion in item d) above. She asked remainder of the Board for their thought.
i. Doubet recommended OB bundle increase. Fulk suggested additional meetings with Elders to explain pricing increase. Letter of explanation. Karlin High will contact area Elders to set up a meeting in the next couple weeks to discuss Mennonite utilization/contracting needs
i) Joining via ZOOM at approximately 7:40, Kevin DeRonde, CEO from Mahaska, Iowa CAH, shared their experience utilizing the Stroudwater group to analysis their financial/operational situation.
Guests exit. Mr. DeRonde was optimistic that with an emergency financial plan, and help from Stroudwater, SCH could expect benefit from the consultation like his facility did in a turnaround situation.
The New Business section included:
“A. FY 2022-2023 Operating Budget-
B. FT 2022-2035 Capital Budget –
Motion by Hatfield to approve both Operating and Capital Budgets as presented. Second offered by Lloyd with unanimous approval.
C. Audit Proposal-BOO Proposal $142,000. Look for presentation from BDO rep next month.
D. Consider tax ceiling increase. Brief description of steps to raise tax rate Decision will be made next month. Filing must be completed by August 30.
E. MRHA/USDA Technical Assistance Project. No cost to SCH. Discussed earlier throughout evening. All Board members were in agreement to pursue this evaluation as quickly as possible. For now, hold off any major service line modifications pending the results of the 3rd independent study,” as well as other matters.
In Executive session, under Personnel, the minutes read:
1) Short discussion regarding letter from Angela Schmitter. It was very detailed and concise in outlining the many facets of the correction action the Revenue Cycle Team have developed and carrying out. Following this Angela exited.
2) Interviews with two COO applicants yesterday and today. HR and Administration assessments will be given to the board. It is the consensus of the BOD to schedule interviews by a select committee of board members as soon as possible after the holiday. This is to be announced.
3) Succession plan for August and September.
4) Ashley Ward submitted drafts of OB and Med/Surg staffing schedules which demonstrated the many gaps both with and without using travelers. This covered the period of July 31 through August 27.
5)Financial aid request. Deferred back to open session.
When the minutes of the board’s July and August meetings are received, we will make them available in the Memphis Democrat and online at memphisdemocrat.com.
The minutes of the meetings are here:
Board Mtg.-Open Session-May 31, 2022
Special Board Mtg.-Open Session-June 15, 2022