Schneider CEO Reports Hospital’s Progress, Challenges

Schneider Regional Medical Center is making progress in spite of fiscal challenges, reported Chief Executive Officer Bernard Wheatley to the St. Thomas District Hospital Governing Board on Wednesday.

According to Wheatley, Schneider continues to secure a joint venture with DaVita Inc. in order to provide end-stage renal dialysis services in the district. The hospital now seeks to execute two agreements with DaVita: an operations agreement that would outline the roles of each party, and a management agreement that would spell out how DaVita would manage the dialysis unit throughout the term of the agreement with Schneider.

Wheatley also addressed the medical waste situation that resulted in a notice of noncompliance from the Department of Planning and Natural Resources on Oct. 1.

Wheatley said Schneider was informed verbally by DPNR counsel that it is now in full compliance with DPNR permit requirements. Wheatley stated that the hospital is following up with DPNR, which has yet to provide a written notice of compliance.

Wheatley added that the hospital purchased four additional storage trailers to help in the Stericycle transport truck’s turn-around time between St. Thomas and Miami, which at times could last for 60 days.

Schneider financial reports indicate that, last fiscal year through Aug. 30, Schneider’s total operating revenues stood at $67.3 million, with operating expenses at $93.8 million. The $26.5 million difference is offset by about $20 million in non-operating income, finally resulting in a $7 million deficit.

According to Wheatley, Schneider has selected two firms that would help streamline its financial management mechanism, which he hopes would pave the way for improved finances.

Medical Data Systems would provide support in the areas of billing, statement generation, and onsite assistance for the hospital’s business office, which Wheatley said is expected to result in timely accounting and statement generation, as well as a more accurate inventory balancing for the hospital.

The Advisory Board Company would provide performance diagnostics in the areas including patient intake procedures, financial counseling, customer service, and billing and collections.

Wheatley also reported a contract executed in October with accounting firm Clifton Larsen Allen, an auditing firm specializing in the health care industry, to provide auditing, reimbursement and tax services for the hospital.

CLA representative Daniel Frein briefly presented to the board a draft audit of Schneider’s financial statement, which was accomplished “in record time,” according to board members.

Frein said preliminary analysis shows Schneider’s material weaknesses include misstatements in monthly reconciliations, aging accounts receivables, problems with disbursements, and accounts payable – monies owed by the hospital to vendors or customers.

Frein also noted that the hospital’s average age of plant – from the larger infrastructure to the furniture – shows steady depreciation.

Wheatley agreed in his report, noting that “you have to fund depreciation. Otherwise the plant falls apart.”

CLA representatives are scheduled to come back in Jan. 2014 to finalize the firm’s audit of the hospital’s finances.

Wheatley also shared that the hospital’s application for a $2 million secured line of credit with FirstBank is near completion with the application officially submitted Nov. 15.

Wheatley also outlined key challenges for Schneider Hospital, including delayed payroll allotments, CIGNA reimbursements, and Bill No. 30-0207, which proposes a 30 percent cut in professional services by all health care providers employed in the territory’s public hospitals.

Medicaid reimbursement is also a major challenge. Watson noted the increase in Medicaid-insured patients, which Wheatley said was brought on in part by the roll-out of the Medicaid expansion in August.

“If we would be compensated a little better, it would impact the overall revenue,” said Wheatley, adding that further dialogue with Human Services Commissioner Christopher Finch is needed to address the Medicaid reimbursement issue.

“I think we are focusing on the right issues,” said Williams, referring to some “low-hanging fruit” that the hospital can take advantage of to improve its financial situation, and some “not-so-low-hanging fruit” that would need more sustained attention.

In other action, the board also unanimously approved all applications for reappointments of clinical privileges at Schneider Hospital.

Present in the Schneider board room were Chairman Cornel Williams and members Miles Stair, Wilbur Callendar, Judith Richardson, Greta Hart-Hyndman and Vincent Samuel. Members Aldria Harley-Wade, Maria Tankenson Hodge and Mulchand Alwani were excused.

Also present were Fred Vitello, Schneider interim chief financial officer; Eugene Welsh, finance officer; Karen Hodge, facilities manager; and Dr. Thelma Watson, chief medical officer.

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