Uncompensated care costs CHCC nearly $12M deficit

The Commonwealth Healthcare Corp. has incurred a nearly $12-million deficit in fiscal year 2023 alone due to uncompensated care, or health services the hospital provides to patients that are unable to pay.

It was learned during a special board meeting yesterday that CHCC incurred a whopping $11.7-million deficit last fiscal year, based on figures cited by CHCC chief financial officer Perlita Santos, who cited uncompensated care as the main reason for this loss.

True, CHCC has been in deficit for many years now, Santos said, but based on the history of uncompensated care from 2018 to 2023, the deficit significantly dropped during the COVID-19 pandemic due to Presumptive Eligibility, when the federal government subsidized many patient costs.

When the Presumptive Eligibility program ended in fiscal year 2022, the deficit then rose exponentially, she said.

Specifically, CHCC’s deficit was about $5.7 million in fiscal year 2021. That number climbed to about $9 million in fiscal year 2022, then climbed to nearly $12 million in fiscal year 2023, Santos said. Prior to the pandemic, CHCC’s deficit from uncompensated care ranged from $12.7 million to $17.6 million, dating back to fiscal year 2018.

“There’s a lot of components to uncompensated care. With Presumptive Eligibility, we saw a decline in uncompensated care from 2020 through 2022. In 2022, despite having Presumptive Eligibility, we incurred $9 million in uncompensated care [due to] of Medicaid not remitting from June to September. It reached pre-pandemic levels again in 2023 due to the suspension of Presumptive Eligibility,” she said.

In explaining why CHCC incurs uncompensated care, Santos said that hospitals are prohibited from asking patient for their ability to pay when they enter the emergency room, pursuant to the Emergency Medical Treatment & Labor Act, or EMTALA. This is one of the reasons CHCC racks up so much in uncompensated care, she added.

Another reason why is the CNMI’s inability to match Medicaid allocations, causing Medicaid to default on payments, as well as uninsured care, sliding fees, and co-pay deductibles not being paid.

“Uncompensated care are the bills that we were unable to convert to cash. These are either co-pay deductibles or actual uninsured care. These are also the uncovered costs for sliding fee discounts. These are also unpaid benefits,” said Santos.

When asked whether or not CHCC goes after individuals who have not settled their bills, Santos said CHCC does not.

“We do send bills, statements, but these are not paid. We don’t take these people to court because we don’t go after the indigent. When we do follow up procedures for billing, we prioritize reconciling with third-party payers like insurance [or] guarantors versus the indigent. These deficits are absorbed by CHCC,” she said.

CHCC CEO Esther Muña also noted that CHCC also has patients who have been discharged with nowhere to go so the hospital still provides care for them. This also contributes to the large deficit seen last fiscal year.

“It’s not billable, not collectable,” she said.