Hospital battles rise in warrants

TONASKET – Multiple factors have led to a recent rise in North Valley Hospital’s warrants.

NVH Chief Financial Officer Bomi Bharucha said in an interview Monday, June 11, that while the warrants, which have gone up to $2.4 million after having been trimmed to $1.5 million late last year, are higher than is desirable, a combination of belt-tightening and an expected infusion of cash should get the hosptal back on target over the next several months.

Warrants are the short-term, low-interest loans from the county that the hospital uses to help cover operating expenses. NVH’s goal is to have the warrants reduced to zero by the end of 2013.

One major factor in the recent rise in warrant level was a change in the transaction standards with Medicare and Medicaid, which affected how quickly claims are turned around into reimbursements. And, since NVH is dependent on Medicare and Medicaid for half its income, any glitch in the system can have a significant impact.

“There is always stuff going on with Medicare and Medicaid,” Bharucha said. “When the transaction standards changed, we really got clobbered in January through March. We had interruptions to our cash flow from those reimbursements. When they hiccup, it’s a much bigger deal for us, even if it’s just for a day. And that hiccup was a problem for much longer than that.”

At the same time, Bharucha said, for several weeks the hospital had lower-than-expected receipts.

CEO Linda Michel put a number of restrictions in force to contain costs, including a hiring freeze (except for replacement hires), limiting travel and cutting back on some supply orders.

“There are three areas we can control,” Bharucha said. “That is our salary, our travel and our supplies. Even there we can only do so much before we hurt our services, but we are doing what we can to clamp down.”

Bharucha said he expects a bump up in cash, particularly as tax receipts come in, and with an expected $500,000 reimbursement of Medicare costs.

“We just filed our 2011 cost report on May 31,” he said. “Within the next two months, when the report is reviewed, if there are no red flags they will reimburse us as it was filed.

“So by late July or early August we should get a good boost to our bottom line and bring us back closer to our targets.”

Bharucha said that the broader focus is on finding ways to increase the volume of patients.

“We aren’t sitting here hoping people get sick,” he said. “But we are trying to focus our operations on bringing in enough money so we aren’t so dependent on annual events like tax receipts. That’s why our marketing and what Terri Orford does in our business development office is so very important.

“Our target for the end of 2012 is to be at $1 million or under. I believe with the combination of injections of cash we are expecting, and the controls on our expenses, should get us back on track to get there.”

About Gary DeVon

Gary DeVon is the managing editor of the Okanogan Valley Gazette-Tribune and celebrated his 25th year at the newspaper in August 2012. He graduated from Gonzaga University with a degree in Communications - Print Journalism, with an emphasis in photojournalism. He is a proud alumnus of Oroville High School. His family first settled in Okanogan County in the late 1800s. His parents are Judy DeVon and the late Larry DeVon and he has two younger brothers - Dante and Michael. Many family members still call Oroville home. He is single with a grown daughter, Segornae Douglas and a young granddaughter, Erin.

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