The territorial hospital board on Monday discussed ways to improve the revenue cycles of Virgin Islands hospitals, eventually approving a stalled vendor contract between the Gov. Juan Luis Hospital and Advisory Board, which is expected to streamline the St. Croix hospital’s ailing revenue cycle.
The hospital’s contract with Advisory Board caused concern among territorial board members. The board members said they understood the need for enlisting the company to sort out the hospital’s revenue cycle, but balked at the initial contract amount – $1.27 million for 12 months – that was much higher than what Advisory Board charged Schneider Hospital on St. Thomas for similar services. Schneider’s contract is capped at $300,000 for eight months.
However, during Monday’s meeting, the board was informed that the scope of work specified in the Advisory Board contracts for JFL and Schneider were materially different. According to JFL’s assistant chief financial officer, Michael Younger, there was a misunderstanding in the initial stages of negotiations, which resulted in JFL being charged for revenue cycle and cost containment. This made the charges appear much higher than that for Schneider, which contracted Advisory Board for revenue cycle services only.
According to Younger, JFL and Advisory Board agreed to remove cost containment from the scope of services, dropping the contract amount to $560,000, $100,000 of which was already paid to Advisory Board for what they called “phase one” of the project. The board, therefore, was called only to approve the remaining $460,000 for “phase two.”
Although the adjusted contract cost seemed more palatable to board members, some expressed concern that the new amount was a flat fee. Schneider Hospital Chief Financial Officer Fred Vitello pointed out that, in Schneider’s contract with Advisory Board, some of the contract amount was “at risk,” which means the company would only get paid the full amount if Advisory Board performs to an agreed upon standard. In JFL’s new contract, no amount is at risk; JFL pays the entire contract amount, regardless of Advisory Board’s performance.
Board member and Finance Commissioner Angel Dawson expressed concern that a new request for proposal was not issued after JFL changed the scope of services in the contract. Dawson was concerned that this might expose the hospital to complaints from other potential bidders, and territorial board counsel Loren Kleeger said that this is certainly a possibility.
Board Chairwoman Lynn Millin-Maduro agreed that, traditionally, this would warrant sending out RFPs. However, JFL had already engaged Advisory Board’s services, she said, adding she could attest that JFL “went through a process.”
Board member Joyce Heyliger moved to approve the contract, seconded by Anthony Ricketts. Voting in favor of approving the contract were Ricketts, Heyliger, Maria Tankenson-Hodge, Cornel Williams, Wilbur Callender, Debra Gottlieb, Miles Stair and Philip Arcidi. Dawson voted no, while Millin-Maduro and Aldria Harley Wade abstained.
With revenue cycle remaining a focus for both hospitals, hospital officials again called attention to the prevailing problem of uncompensated care and how to hold patients accountable for their hospital bills.
Schneider Chief Executive Officer Bernard Wheatley said that using Medical Data Systems, the hospital is going after $40 million owed to the hospital. Schneider is considering an amnesty program that would give allow patients to pay only half of their outstanding balance if they paid within 60 days of notice, Wheatley said.
However, the key, according to Wheatley, is to “fix that culture” of patients trying to escape the responsibility of paying for hospital care. It is common for patients to come in with false personal and insurance information, he said, causing problems in billing.
Millin-Maduro suggested instituting a policy that would allow the hospital to “lock on” to patients’ identifying information, much like the process used by the Bureau of Motor Vehicles.
Although the hospitals cannot legally withhold treatment based on the patient’s ability to pay, Millin-Maduro emphasized, “You’re not withholding care. You’re verifying the identity of the person you’re providing care to, and that’s a totally different situation.”
Luis Hospital CEO Kendall Griffith added that hospital staff also tend to be lenient, believing that patients do not need to pay for certain services.
“There’s sort of a socialist type of mentality that we have to retrain people on,” he said.
Younger emphasized that they understand patients would not be able to pay thousands of dollars in one payment.
“Ultimately, what we want to make sure is to start that dialogue with patients,” said Younger. “Even if it’s at $25 a month, they’re paying something on their bill, and they’re validating that obligation.”
Present in the St. Thomas boardroom were Millin-Maduro, Tankenson-Hodge, Williams, Callender, Gottlieb, Ricketts, Heyliger, Stair and Harley-Wade. Dawson and Arcidi attend via telephone. Greta Hart-Hyndman was absent.
The board set July 16 as the tentative date for their next meeting.