$131M in CHC receivables

Posted on Dec 07 2011

For a quarter of a century, the Commonwealth Health Center—now the Commonwealth Healthcare Corp.—has accumulated receivables of some $131 million, which is a lot bigger than the CNMI government’s fiscal year 2012 budget of $102 million.

CHC executive officer James E. Phillips and four CHC board members led by Joaquin Torres shared this with senators during a meeting yesterday morning in the Senate chamber on Capital Hill.

Senators also asked health officials on a host of issues—from what they described as high turnover rate of providers including the resignation of the lone physician on Tinian, Dr. Steve Lebamoff, to a lack of an organizational chart, absence of an adopted rules and procedures, long waiting hours for patients, and lack of medical equipment and services.

“Their work is not easy but they have to be conscious of the decisions they make because they affect peoples’ lives,” said Senate Health Committee chair Sen. Ralph Torres (R-Saipan).

Torres said the Senate seeks to work closely with the corporation to ensure the latter would be able to efficiently run a hospital and centers to provide the best care possible.

Phillips told senators that in their conservative estimate, 80 percent of the $131 million receivables are “doubtful or questionable accounts,” which means it would be harder to collect them.

But Phillips pointed out that such designation does not mean the amount will be “written off.” The receivables include unpaid hospital bills accumulated since the opening of the only government hospital in 1986.

“The other 20 percent has a better chance of collection,” he added.

The health officials assured senators led by Senate President Paul Manglona (Ind-Rota) and Senate Vice President Jude Hofschneider (R-Tinian) that the corporation has been doing extensive review of hospital billings, collections and other financial data. Among other things, the corporation has taken an aggressive approach in collecting unpaid hospital bills.

Corporation CEO Juan N. Babauta, speaking separately before members of the Saipan Chamber of Commerce yesterday, believes that only a quarter of the collectibles may actually be collected because of the statute of limitations. He said millions of millions of undecoded billings for patients have sat idle for many years.

“CHC is barely collecting only 10 to 15 cents on the dollar that is expended. I guarantee you that if any private clinic is only collecting such amount, they will shut down the next day. I have to tell you, the hospital has a problem.”

Based on the financial records he obtained, some 50 percent of the services being provided at the only public hospital on island is not being charged due to faults in the system.

Just yesterday, a woman told Saipan Tribune that her child is now 12 years old but she has yet to receive her billings from CHC for the delivery of her baby.

Torres said senators have yet to receive from the corporation an organization chart, articles of corporation and rules and procedures, among other things.

Anthony Aguon, one of the healthcare corporation board members, stressed during the meeting with senators the need to amend the law so that they would become a “governing board” rather than just an “advisory board” and accomplish many of the corporation’s goals.

Torres said he has a bill that would turn the “advisory board” into a “governing board” but that bill has been pending in the House of Representatives for months now.

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