CHCC sees $50.7M shortfall in FY 2020

The Commonwealth Health Care Corp. predicted yesterday a $50.7-million shortfall in fiscal year 2020, which starts this Oct. 1, 2019.

The shortfall, according to a CHCC report to the House Ways and Means Committee, reflects a projected $76.7 million revenue in fiscal year 2020, minus $39.5 million in bad debts and contractual adjustments. That would calculate to a total of $50.7 million.
During yesterday’s budget hearing, CHCC officials said they are asking for a total allocation of $50.7 million for the fiscal year to negate the shortfall.

“When preparing our budget, we based it on the health care needs of the CNMI and that there is the assurance that we provide safe and quality health care. The projected revenues show a shortfall and, if the shortfall is not paid with a local appropriation, then services will be impacted and rates will have to increase to ensure basic services remain. This is not what the people need,” said CHCC chief executive officer Esther Muña in a statement to Saipan Tribune.

“We had an exceptional dialogue with the members of the Ways and Means Committee regarding how CHCC has progressed over the years and how we want to maintain the progress so that we provide the services our people desperately need,” she added.

In her opening remarks before the committee, Muña stated that the fiscal year 2020 budget request for the lone CNMI hospital took into consideration the Medicaid “cliff” at the end of fiscal year 2019.

“If all the efforts this administration and Delegate Gregorio Kilili C. Sablan (Ind-MP) have made does not become successful, CHCC, as a health system, will need the CNMI government’s assistance to fill in the funding gaps from the Medicaid shortfall,” Muña stated while addressing committee chair Rep. Ivan A. Blanco (R-Saipan) and the rest of the committee.

According to the budget request report, CHCC in fiscal year 2019 projected $14 million for CNMI Medicaid funding matching of 45 percent. For fiscal year 2020, the local matching plummeted to a hair short of $5 million.

“For several fiscal years now, we had implored on this committee to fund for services CHCC has provided but have received no compensation. Obviously, with the impending Medicaid cliff, that number will increase,” Muña noted.