The hospital approved a response to the Wrangell Borough Assembly regarding the future of its billing services contract.
At an August 23 meeting, the city’s governing body asked that Wrangell Medical Center put together an assessment of its two-year contract with TruBridge, which took over billing services for the community-owned hospital the summer of 2015. The contract offered the company 2.2 percent of the transactions it processes on behalf of the hospital, with the intention of addressing its excessive accounts receivable and minimizing uneven revenue cycle risks.
Before renewing the contract with TruBridge, the Assembly wanted to get an idea of the costs for resuming in-house billing services.
At its February 15 evening meeting, the WMC Board approved the cost report, which summarized that the total annual cost has come to $245,000, which includes support and training expenditures. It contrasted this with cost estimates for hiring local billing staff, which for three people would cost $602,000 – this figure includes the $245,000 needed to retain a billing agency during a hypothetical year of training, plus $182,000 for the outside consultant or trainer.
Following the year of training, the report estimates annual costs afterward would be $220,800, taking into account salaries, benefits, traveling staff costs to cover time away, and loss of access to the services a specialized company such as TruBridge offers.
The report notes billing had previously been done by a staff of three, who had also been responsible for other front-office duties. In November 2014 the hospital’s cash reserves had dwindled to three days’ cash on hand, or $125,000 and WMC was reporting cash flow problems due to billing “bottlenecks.” One of the prescriptions for the problems had been contracting with an outside billing agency, which was pursued the following spring.
Since taking on the contract in 2015, WMC chief executive Robert Rang noted TruBridge had minimized the write-off of accounts that were no longer billable to less than $50,000 in the past six months – down from more than $1,000,000 less than two years prior. He noted the three business staff jobs were still preserved as well.
In his monthly financial report, CFO Doran Hammett reported the hospital now has $1.2M cash on hand, or 42 days of operating expenses.
“A considerable improvement, a lot more breathing room for us, moving forward,” he said. “It’s not great, but it’s much better than where we were.”
Repayments on a special $500,000 reserve account the city in 2015 set aside for the hospital’s use in the event of a billing emergency are now down to $60,000 as well, Hammett added. By the start of the new fiscal year on July 1 that should be down further to $10,000, and repaid shortly thereafter.
In other hospital news, Rang reported preparatory work for a new hospital facility is coming together. The concept was also at the request of the Assembly in November, with members advising Rang to put together an updated concept from previous proposals five years ago.
Jensen Yorba Lott has been contracted to do the architectural work, and should be sending an architect to look over the site on March 13. BDO in Anchorage has been taken on for the financial feasibility side of the project, and for a contracted price of $24,000 will help complete the first phase of the study. If deemed doable, BDO would help run the more in-depth numbers needed for a loan application with the Department of Agriculture.
Rang hopes to have a working concept ready for public input by April. The facility he envisions would be multi-storied, with greater space available for long-term care beds. Any new facility would likely be built on public lands set aside for the project near Wood Street, adjacent to the current Alaska Island Community Services clinic.
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