Despite a severe cash-flow problem, Commonwealth Healthcare Corp. CEO Juan N. Babauta assured hospital employees and staff yesterday that their payroll will be released as scheduled tomorrow.
Babauta said the corporation managed to save some monies from reimbursements collected by the Commonwealth Health Center from federally funded Medicare and Medicaid programs in addition to some revenues collected from actual hospital services.
The corporation, Babauta disclosed, usually receives reimbursements from these two federal programs every two months. He didn't disclose the amount of the latest reimbursement but described it as significant to meet the Friday payroll.
“We were able to save money [from Medicare and Medicaid reimbursements] in anticipation of our payroll this week. This means, if we see that we're running short we literally cut back on all expenses,” he told Saipan Tribune.
The corporation has yet to know when the $7 million additional line of credit from Marianas Public Land Trust will be released, pending the satisfaction of some conditions and provisions in the loan agreement. A portion of these monies has been identified for employee payroll.
Babauta admitted that there had been times when employees' payroll was delayed, mainly due to financial constraints, but assured that there has never been a time when the corporation didn't actually pay this obligation.
He conceded, though, that the employees' housing allowance remains a challenge and he is non-committal if payments will also be made this week.
Employees interviewed yesterday disclosed that the corporation is behind in the release of the housing allowance by five months next week, covering the period from March to July.
Babauta said that if enough money comes in to pay even a month of this delayed allowance, “the corporation will be happy to do so.”
The housing allowance is given to healthcare providers who were hired from outside the Commonwealth. Unmarried employees get $600 monthly while those with families get $800. The corporation board earlier recommended scrapping the housing allowance until October 2012 but Babauta has yet to act on this recommendation.
He admitted that the housing allowance, costing $1.2 million yearly, remains a challenge to the corporation.
“We've been struggling in that area and we're behind for several months. This Friday, let's see if we can pay them [with their housing allowance],” he said.
The corporation needs $800,000 each payroll for about 600 employees on all three islands. To meet this obligation, the organization counts on allotments from the central government. It was appropriated a mere $5 million for its operation this fiscal year. This amounts to $417,000 per month.
Saipan Tribune learned that the corporation also made regular payments for employees' benefits amounting to $200,000 monthly. These include health and life insurance premiums, retirement plan, credit union, and other personnel allotments.