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NRMC sets plan in motion to end hospital's funding of Long-Term Care's intercompany expenses
During a work session Thursday evening, that was at times tense, the Nevada Regional Medical Center Board of Directors made the announcement to the Long-Term Care (LTC) Board that it would no longer be covering pass through (intercompany) charges for Moore-Few Care Center (MFCC).
Explaining the various intercompany charges that the hospital has been covering for LTC, Nevada Regional Medical Center (NRMC) Chief Executive Officer Jason Anglin noted that as of Dec. 31, 2022, LTC owes NRMC $1,110,637.41 under intercompany services. The majority of these expenses fall under health insurance and meals, with 22 percent of the intercompany charges going towards Pride Care Self-funded Health Insurance and 29 percent of the charges going towards meals.
Anglin added that the 5,898 meals provided to MFCC in November totaled $23,596 and the 5,553 meals in December totaled $22,216. This is at a cost of $4 per meal. This $4 per meal rate has not been adjusted since 2015 and, according to the most recent cost report, the hospital's cost per meal is $6.64. Anglin pointed out that due to this, NRMC under charged $15,566 in November and $14,655 in December for meals to MFCC.
Other intercompany charges include supplies, administrative services, worker compensation insurance, 24/7 maintenance, 24/7 IT services, nursing salaries, laundry services, and miscellaneous.
"The feeling of our board after the last meeting was that we can't continue to sustain these kinds of costs," noted NRMC Board Chairman Bob Beaver. "We have our own struggles trying to remain profitable and we have challenged our administration to end the intercompany charges."
For example, Beaver noted that NRMC would be working with Pride Care Self-funded Health Insurance to determine what part of those expenses are the hospital's share. He noted that the hospital would pay its portion. "The bill for your share will be sent to you," he added, addressing the LTC Board. "We will no longer pay it."
Asking the board for more time and for a deadline to be in place, LTC Board Member Bill Kohler emphasized the challenges of the past year for Long-Term Care. "We've gone through a lot of trauma in the last year," stated Kohler. "I've been on this board for a year — I'm a nervous wreck. We closed Barone. That should have been done a year and a half ago. It didn't happen. It cost us a million and a half bucks."
To this point, Beaver responded, "You want to talk about being a nervous wreck? Our (the hospital's) income for November was a negative $232,000."
NRMC Board Member Aimee Meyer shared her concern for the hospital's financial health. "In terms of 'critical to a community,' I tend to prioritize a hospital for the security of everyone in the community," she stated. "It's not that I don't have a giant heart for Long-Term Care, but we're facing 17 days cash on hand. We're in big trouble. I think we think about this as a collective — not an 'us' against 'them.' We, collectively, are all members of the Nevada community and we have to think of what's critical to the operation of our City."
"I don't want us to go into a situation like you did with Barone," added NRMC Board Member Cindy Thompson. "That a year from now... 'could've, would've, should've.' I'm not willing to take that risk as a hospital board member."
Stressing the issues and challenges facing the hospital, Anglin noted that 11 employees were laid off on Wednesday and 13 other positions weren't filled. He added that this would be a decrease in the hospital's payroll costs by over a $1,000,000 and approximately $1,300,000 in benefits. "We've got a lot of things that we're working on towards financial improvement," he added. "They take time to happen. The funding that we've been doing to Long-Term Care reduces our time."
Adding to the conversation, NRMC Board Member Jayne Novak stated, "We have to act on what our administrator says. When he says this is what we need to do in order to sustain our hospital, then he's got our full support. We aren't going to quit feeding the patients. We aren't going to quit providing support. But, we're going to quit paying your insurance. Are they going to cost you? They are. Maybe you need to shop and find something that's not as financially tasking as what we provide. We can't do it anymore. The meals... the physical things... we'll work those out. We'll figure out how to deal with those."
Meyer noted that the motion to quit funding pass through intercompany charges for LTC was made during executive session at the previous special session hospital board meeting. "I'd definitely say very sorry that this information blindsided you," she conveyed to the LTC Board.
With this, LTC Board Member Kohler stated, "I can not tolerate being blindsided and I will not be." He then excused himself from the remainder of the meeting.
After lengthy discussion between the two boards, the NRMC Board decided it was pertinent to put a definitive timeline in place to enact the end of the charges. NRMC Board Member Dana Ellis motioned that the Nevada Regional Medical Center sever ties from a financial standpoint with all of the hospital's billing of intercompany charges within a 90-day time frame.
Stressing a need to make a resolute decision on the matter, Ellis noted, "We are going to look like complete and utter crap to this community when this all comes out. But, if we don't make a decision, we're going to close ALL the doors. And then we're going to be sitting here just like all of the people of Fort Scott, Kan., in a stupor that their hospital is no more."
With a second from Novak to Ellis' initial motion, the NRMC Board unanimously approved of the motion.