By Mary Alice Murphy
The Gila Regional Medical Center governing board welcomed back Scott Manis as interim chief executive officer at its monthly meeting on April 29, 2021.
The agenda was amended and approved with a clarification that the last item on the agenda, a resolution for signatory authority to add ICEO Manis and to re-confirm Interim Chief Financial Officer Greg Brickner would also approve Manis as interim CEO.
Announcements included the retirement of Paul Donet after 43 years of service at GRMC, currently in the Laboratory Department.
Also lauded were four people for their years of service at Gila Regional. They are Michael Ybarra for 20 years of service, currently in the pathology lab; Robin Stewart, 15 years of service, currently in Med Surg II; Rodney Stewart for 15 years of service, currently in laboratory; and Tiffany McDonald, 10 years of service, currently in the recovery room.
The governing board members then moved into executive session.
After coming out of executive session and approving the consent agenda of minutes, the following item was the CEO verbal report.
Manis thanked the board for inviting him back. "I'm very happy to be here to work with the great staff at Gila Regional Medical Center. It's already a delight a week and a half being back and reconnecting and picking up where things are. The second item is thanking Sen. (Martin) Heinrich and Ms. (Priscilla) Lucero (Southwest New Mexico Council of Governments executive director) for their work to get us the $2.5 million EDA grant. It will be utilized for the roof repairs and the HVAC system repairs. When I was here previously, we were talking about the community health care coordination between the EMS and the managed care plans for at home visits after people are discharged. Those visits were being done virtually, at the request of the managed care plans, but Blue Cross Blue Shield has asked us to go back to in person visits, as things start to loosen up Covid-wise. Just wanted to let you know we are going back to in-person meetings. In the past few days, we have held town halls for all employees and medical staff. We had a pretty good turnout for those and really an opportunity for us to talk about where things have been going for the past year and where we're going now and to answer any questions. Those were well received, and we received great feedback."
"The next item on my list is that we received yesterday unofficial notice of a grant of $85,800 for replacement of an EMS unit [ambulance]," Manis continued. "Some of our units are getting old with high mileage, so it, along with some other funds, will be used to purchase a new unit in the very near future."
He said the last thing was to recognize that as Grant County was going to the turquoise level, "we want to communicate to you what it means to us. We are actively reaching out to the southwestern New Mexico hub and the New Mexico Hospital Association on recommendations for how we can and should advance to the next level. We want to be consistent with their recommendations, keeping in mind we want to continue to protect our patients, our visitors, our own employees, and at the same time open up to the level of visitation that would be appropriate. We will communicate with the community, but tomorrow, the doors won't be wide open or everyone can come in. We have to keep in mind all our constituencies and stakeholders, as we move forward in that."
The next report was from Chief Nursing Officer Kelly Rodriguez. "Nursing is preparing for our Joint Commission survey. We are in our window. Related to our mock survey conducted in early April, we are working on process improvements from our findings in the mock survey. We continue to work on quality and regulatory compliance initiatives for our patient care to improve quality and safety. We are also actively recruiting for multiple positions. One is for our education director and we have a promising candidate that we will be interviewing. Our next initiative is to recruit a case management director for the vacated position. We are, right now, doing a comprehensive evaluation of the case management department and building in some initiatives there to continue to be able to bridge the gap for our patients with their discharge dispositions and the things we do for them post-discharge. We continue to work on improvements around our surgical services, inventory process and looking at supplies and equipment for that area to improve patient care. In addition to the many blessings of funding we have received for Gila Regional, we are working through all the improvements for the labor and delivery department. That follows along with the capital equipment that will be awarded to us. To go along with that, every month, we like to recognize an outstanding member of our Gila Regional team. This month, I would like to recognize Jamie Ascencio, one of our case management review nurses. She does an amazing job keeping us compliant with our insurance companies, as well as with our patient care management and what we do for patient care while they are in our facility."
Interim CFO Brickner came to the podium and connected with the auditor for the fiscal year 2020 GRMC audit for the year that ended June 30, 2020. He introduced Tom Dingus, owner of Dingus, Zarecor and Associates, who explained the delay from having to wait for audit requirements related to the CARES Act. The audit should be back on regular schedule for October for the 2021 audit. "We primarily work with rural hospitals, critical access hospitals and other health care organizations."
Dingus showed a document that was first of the independent auditor's reports, "where we give our opinion of the financial statement. It's an unmodified opinion that every hospital has growing economic concerns because of uncertainly of what will happen after COVID." He noted the loss of reserves over the past couple of years due to the ongoing shortfalls in revenues. He noted the balance sheet for Gila Regional shows $12 million. "That may sound like a lot of money, but in reality, it is less than two months of operating expenses. In addition, the advance payment that Medicare gave the hospital of $6.8 million is being paid back and will continue to be paid back." He also pointed out the amount that remained in the CARES Act funding to be put toward 2021. He noted that still after about a year from when the money was received, there is still uncertainty. The Payment Protection Program loan of $6.2 million is expected to be forgiven, but it hasn't been yet.
The takeaway on the income statement about the safety net care pool, which is out of the control of the hospital, was about $1 million down. The main takeaway was a $21 million loss compared to an $11 million loss in the previous year. "There are no non-operating sources after the CARES Act to make up for that. That operating loss needs to get to a positive number of 3 percent to 6 percent of your total revenues of your total margin to be a sustainable organization. You spent more than $5 million over your budget. But of the $19 million received from CARES and other programs, you will have to pay back $6.8 million, but the other $12 million you get to keep and that will help."
He explained the notes on the organization as "who you are, how you operate, where you're located, what you do, and the second part is how the transactions are recognized." The rest of the document is about how the audit is done and what people might want to know about the organization. The audits, he said, can serve the administration and the government board, but they are especially useful for those outside the organization, such as creditors and vendors.
Dingus said what is important is that the hospital has no long-term debt other than the $6.8 million. "Net patient revenue is who paid you and how much. About 52 percent comes from Medicare and 70 percent from Medicaid. As you changed to be critical access, you will receive significantly more from Medicare after July 1, 2020. That's good for long-term sustainability."
The audit also contains an overview of the plan to recover and supplemental information as required in the state of New Mexico.
In the second auditor's report, the takeaways are one material weakness and four compliance findings of varying significance.
The first one is that the actual expenses exceeded the budgeted expenses. As a governmental hospital, there should have been an amended budget.
The second one is the retirement plan. "It's not a legally accepted plan for a government hospital, although it is acceptable for a non-profit hospital. I think there was confusion some 10 plus years ago, when it was implemented. That needs to be corrected."
The bigger compliance finding is that oversight of operations hasn't been monitored and responded to more quickly.
And the severance contract with the previous CEO was larger than a typical payout and the approval process of how that was carried out showed a general lack of oversight.
A smaller finding was that an inventory of capital assets needs to be done every year.
The last one is not important, because "we knew the audit report would be late. The state of New Mexico said everyone knew the audits would be late and not to worry too much about it."
A resolution shows, while there are five findings, there were three from the previous year that were addressed related to the county function. "The underlying accuracy in accounting was improved in 2020. Jennifer Klotz and her department made considerable improvements in 2019."
Brickner then returned to the podium and said: "Now I can show the progress over the past nine months. We're been putting together work plans to correct findings by June 30 of this year. With good intentions, there will be significant progress on the findings."
March was a very good month, he said. "Although patient discharges were down 71 from last year and 400 less than year-to-date, I added prior number years. We beat last year by 523 in outpatient procedures. Surgeries remain strong. We're ahead by 50 and 139 for the full fiscal year. ED (emergency department) visits were 60 less than the prior year and almost 2200 less than the prior year-to-date. Some remains as we come back from COVID. The key metric is the financial strength index, which is -4.46, but 55 percent better than last year. In March 2021, for the full fiscal year, EBIDA (earnings before interest, depreciation and amortization is $5.1 million better than the prior year, for a total $6.2 million better than the previous year."
"It is so nice to see the progress," Governing Board Chair Alicia Edwards said.
Manis presented the chief of staff report of behalf of COS Dr. Brian Robinson in his absence.
Manis reported the Medical Executive Committee appointed Dr. Brandon Ferguson as HMS (Hidalgo Medical Services) residency program representative for "the residency program we work on with HMS."
Dr. Nathan Williams was appointed by the MEC to the Peer Review Committee, so that he can bring expertise to that committee from the anesthesia perspective.
The Continuing Education Committee plans to relaunch some CMEs and there were no reports from other committees.
Michael Lieb, HealthTechS3 vice president of interim services, gave the management report.
"We have done an awful lot of work, have made great progress and headway. We're proud of it, but we still have a long way to go," Lieb said.
"We held four townhalls this week, with about 60-80 people showing up in acknowledgement of what's going on behind the scenes," Lieb said. "An awful lot of work has gone on under the hood. The staff, you guys, the governor, the lieutenant governor, the senators and representatives, and Ms. Lucero, I just want to thank all of you."
In other news, he reported they have put an offer out to a CEO candidate and are waiting to hear back soon.
Edwards said she and Lieb had talked about doing a state of the hospital to the public, hopfully in mid-May.
Governing Board Member Harry Browne thanked Lieb for the meetings they had held with staff. "Are you planning to do that on a regular basis?"
Lieb said he thought they would do it on a quarterly basis. "It's fun to collect department notes and give credit where it's due."
In old business, the governing board wanted to make sure that minutes reflect that the matters discussed in executive session had no action taken in executive session.
The next item was the credentialing report, which had been presented to the governing board in executive session and was publicly approved in open session, without detail.
On contract summaries, Manis presented each one individually.
The first was for a professional services agreement with Dr. Williams to serve on the peer review committee. Manis said these were typically for two years, but to keep on the calendar cycle, this one would be for 20 months. "It's the same terms as all peer review committee members. It's to bring his anesthesia content expertise."
The second was a sixth amendment extension to Morrison Management Specialists, Inc. for food service. "Because of our new purchasing agreement, we are able to get credits of about $69,000 to the hospital rather than to Morrison," Manis said.
The third was consideration of the technology services agreement for the outpatient pharmacy program with an amendment adding Sentrex for 340B to the existing Sentry Data Systems Agreement. Brickner said the amendment would keep the hospital compliant with the 340B program and make bookkeeping more feasible for the pharmacy.
Next was an extension for the current agreement with Varian Medical Systems Inc. for a third amendment to maintain the linear accelerator used for radiation cancer treatment at the hospital. Manis said the extension was for another year to May 5, 2022, to give time to work with them on a new multi-year agreement. This agreement allows for a 0.8 percent increase for an increase of $1532 on a total cost of $186,667. So, it's a nominal increase. They are usually higher."
A new agreement was considered for blood products at the hospital. The agreement is with Vitalant, formerly known in this area as United Blood Services. "We need a new agreement, so this one is for three years, with an auto-renewal for two one-year terms. We don't have an option to go with anyone else. Because there has been a dramatic decrease in blood donations, our cost last year was $216,000. We expect an increase to $350,000 this year. We do bill insurance and patients, but it's a cost because not everything is covered. Through this, I would make an appeal to the community to donate blood, if you are eligible. There's a critical shortage throughout the country."
Browne asked as Vitalant is the only supplier in the area, if there were price regulations.
Manis said there are companies in the U.S. that provide blood and blood products. The pricing "to my knowledge is not regulated. It is their choice to choose to serve a region. In rural geography, often you don't have multiple carrier choices."
Edwards said the blood donor mobile was in Silver City a couple of weeks ago at the Woman's Club. "Do we know when the next one will be here?"
Manis said they could find out. "Having been a phlebotomist who drew blood, pints of blood from people and as a person who continually fairly consistently donates, I want to stand firm that the community donate if they are eligible."
Brickner said the next resolution would accept the audit.
Manis said the last resolution would approve signing authority for him and Brickner and to approve him as interim CEO.
Each item was approved separately.
When it came to the audit approval, Brickner noted that each finding has a plan to correct it. "We do question whether we can complete the physical asset audit by the end of the 2021 fiscal year on June 30, 2021. And it is unlikely that the retirement plan will be completed in time. We are involving attorneys to make sure that we are covering all past and future employees."
The audit was approved, as was the signatory authority and the appointment of Manis as interim CEO.
The meeting adjourned.