$10 million at stake in JRMC audits

Independent regulators hired by federal agencies to examine medical records have put as much as $10 million at risk for Jefferson Regional Medical Center, according to the hospital’s chief executive officer of the hospital and the chairman of the hospital board.

Speaking during a meeting of the Jefferson County (Hospital) Board of Governors on Thursday afternoon, hospital board chairman George Makris said the hospital has a staff of 20 going over 900 files.

“I can’t tell you how much we’ve spent fighting this,” Makris said, explaining that the private contractors are paid a commission based on the denial of claims for federal Medicare and Medicaid benefit. While those denials can be appealed, hospital CEO Walter Johnson said the process is a long one.

“The last appeal is with an administrative law judge and we’re told that could take three to five years,” Johnson said.

As an example, Makris said a claim could be rejected because of a technicality on a patient’s chart, such as the date missing or a signature.

“When these contractors audit the charts, it’s all or nothing,” he said.

Johnson listed those regulations as one of the reasons revenue for the hospital is down, coupled with a declining population, struggling economy and the shift from an emphasis on inpatient to outpatient care.

“The federal and the state governments are trying to keep people out of the hospital,” Johnson said.

He also said the private option approved by the Arkansas Legislature that will allow the use of federal dollars for people to purchase private insurance has gone slower that expected.

The operating loss for the hospital was put at $4 million during the last fiscal year, but overall revenue based on the hospital’s investments and stocks was up.

To combat the operating loss, Johnson said JRMC has implemented several changes, including cutting labor costs by approximately $5 million.

Approximately two-thirds of that total resulted from attrition, reduction of overtime and a hiring freeze. The remainder was the result of layoffs, with Johnson putting that figure at fewer than 50 full-time employees.

“We previously refrained from making these adjustments in hopes volume would increase,” Johnson said in a document presented to members of the board. “We are adjusting labor to match volumes, just as hospitals across the state and nation are doing.”

Additionally, the document said JRMC has saved approximately $1.2 million in supply and other other operating savings, implemented a new investment policy that is projected to increase investment earnings by $3.5 million, and is implementing new programs to generate new sources of revenue.

On another subject, Makris said that several years ago the hospital started building up cash reserves that will be needed when it’s time to replace the exiting facility.

“There have been some modifications but basically it’s still the same building we had when we moved from Davis Hospital,” he said.

Makris said he expects the process to replace the existing building to begin in about six years.

The board’s only business Thursday was the reappointment of Archie Sanders and Dr. Glenn Bell to the board, and to accept the resignation of Ryland Robinson.

“Ryland is 91 and he’s had some health issues,” Board Chairman John Garrison said.

Garrison asked the other members of the board to think about a possible replacement, and give the names to County Judge Dutch King.

In addition to Garrison, Sanders and Bell, other board members are Eugene Hunt and Dr. David Jacks.