New CFO says Luis Hospital finances remain murky
Published: February 5, 2014
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ST. CROIX - Luis Hospital's interim Chief Financial Officer told the territorial hospital board at a meeting Tuesday that he is unable to provide comprehensive financial information because the hospital's financials since the end of September have not been reconciled.
Luis Hospital Interim CFO Nellon Bowry said the abrupt departure of the hospital's senior financial management team has created a challenge when it comes to reconciling the financial statements.
In late November, Luis Interim Chief Executive Officer Dr. Kendall Griffith fired CFO Deepak Bansal and one of the assistant CFOs, after which the other assistant quit
Bowry came on board in mid-December as interim CFO for three months, possibly longer, and part of his job will be to help the hospital transition, stabilize finances and select a permanent CFO.
On Tuesday, Bowry told the territorial hospital board that he has brought on a controller who has begun the process of reconciling the financials from September 2013 to the present.
According to Bowry, one figure he is certain of is the amount of cash that the hospital had on hand in the bank on Monday: $1.5 million.
Luis financial crisis
The financial crisis at the hospital continues, but one positive Bowry did note in the hospital's financial morass is that the cash flow from Medicare reimbursements seems to be resuming, and the hospital was able to make payroll this week unassisted by the Central Government.
In January, Bowry told the board Medicare was temporarily withholding reimbursements to Luis Hospital to recoup money that Medicare overpaid the hospital in the past, which amounted to about $3 million over two years.
Bowry told the board last month that although the hospital had made plans to pay the money back twice, it did not follow through, and ultimately, Medicare started temporarily withholding the hospital's reimbursements until the amount was recouped.
A month ago, there was a balance of approximately $980,000.
On Tuesday, Bowry said that hospital officials are assuming they have made it "over the hump" of the reimbursement withholding.
The hospital received approximately $500,000 from Medicare in January, which has enabled it to make payroll this week without a cash advance from the Central Government, he said.
Although officials had discussed seeking a line of credit for Luis Hospital, it first will have to get its financials in order, Bowry said.
Another figure Bowry provided to the board on Tuesday was the hospital's accounts payable balance, which he said now amounts to $51.9 million, with some of the overdue payments stretching back as far as 2010.
He referred to the accounts payable balance as "the gorilla in my room."
The hospital has no more credit with its vendors and suppliers - and that has made the cost of doing business more expensive, according to Bowry.
"We're pretty much paying up front for all our supplies," he said.
The territorial hospital board on Tuesday also got updates from Griffith on Luis Hospital, and from Schneider Regional Medical Center Chief Executive Officer Bernard Wheatley and Chief Financial Officer Fred Vitello.
In addition to its oversight duties, the territorial hospital board took actions on Tuesday for which the Luis Hospital board, which can not form a quorum, would be responsible. The territorial board approved appointments of physicians at Luis and an amendment to the medical staff bylaws.
Wheatley told the board that consultants have recently finished a number of scans, surveys or analyses at Schneider as officials prepare to develop a new strategic plan for the hospital. Another consultant is at Schneider Regional to help develop a foundation for fundraising for the hospital.
Schneider Regional also has secured a $2 million line of credit with FirstBank that will help the hospital cover payroll costs and alleviate the use of operating funds to cover payroll costs, according to Wheatley.
Luis' CMS report
Griffith told the board that Luis Hospital has not yet received the report from the Centers for Medicare and Medicaid Services on a survey that was completed the first week in December.
The hospital was potentially in danger of losing its certification, but officials have not yet received the report, which they thought they would have within two weeks, Griffith said. He did not know when the report might arrive, he said.
Griffith also told the board that officials have finally transferred some boarder patients from Luis Hospital into a skilled nursing facility.
Boarders are patients who no longer require hospitalization, but for one reason or another - for instance, they cannot care for themselves and they have no family or no place to go - they remained hospitalized.
On Tuesday, Griffith said six boarder patients were transferred to a skilled nursing facility in Puerto Rico.
According to Griffith, the boarder patients cost the hospital approximately $3,000 per patient, per day when they are at Luis. The cost to house them at the facility in Puerto Rico is about $1,200 per patient, per month, he said.
- Contact Joy Blackburn at 714-9145 or email email@example.com.