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ACO decision postponed for EARH


In the absence of two commissioners, the Adams County Public Hospital District No. 2 board decided to postpone the decision to join an Accountable Care Organization (ACO).

As the primary discussion item for the April 26 meeting, the commissioners agreed to delay the decision until the May meeting due to the absence of commissioners John Kragt and Ross Heimbigner.

The ACO discussion began during the February board meeting following a presentation by Caravan Health’s Sue Deitz.

CEO/CFO Gary Bostrom said during the initial meeting, he was not confident in joining an ACO. But after researching and gaining additional information, he believes an ACO is a wise decision for East Adams Rural Healthcare (EARH).

ACOs are established for Medicare patients, and Bostrom said within the ACO, the members would share the savings of $163 per patient. He explained joining an ACO would allow the District to bill for nursing services, including chronic care management.

With the decision to join an ACO, the District would have to provide an annual nurse salary of an estimated $70,000. Bostrom explained the nursing salary is one of the expenses of joining an ACO, which would also include a monthly cost as well as a startup cost to join.

Bostrom said it was also important to note that Caravan Health would net 10 percent of the total savings of the District. He continued to state that as an accountant, he believes joining an ACO is a breakeven situation.

He explained if the Affordable Care Act continues as it is now, the future for the healthcare industry is for all hospital districts to join an ACO. Bostrom added if districts are not already a member, there would be a penalty involved through Medicare.

Bostrom said the anticipation is that all hospital districts will have to join an ACO, and it could benefit EARH to be prepared for the future.

If the commissioners decide to join an ACO, the official start date would be in January 2019. Bostrom explained the ACO would include hospitals within the region, not from across the United States.

Bostrom stated his proposal was to move ahead with joining an ACO. A slight discussion followed, with Chairman Eric Walker making a motion to authorize Bostrom to move forward with the Caravan Health program.

Walker later withdrew the motion, as fellow commissioners Jerry Crossler and Stacey Plummer wanted to wait until all commissioners were present to discuss the matter.

Deitz said the deadline for joining an ACO is May 31, but the District will not receive a discount for joining with Caravan Health.

Per Deitz’ recommendation, Bostrom decided to proceed with the ACO discussion by requesting the service and participation agreements for attorney review. The document review will allow the District to make the ACO filing deadline if approved at the May meeting.

Bostrom said with attorney approval, he will continue to recommend EARH join an ACO in order to prepare for the future. He added the District would enter into a hold harmless contract if the District makes less than the estimated goal.

The ACO discussion will be the primary topic for commissioners during the late May meeting, which is scheduled for May 24 at 5:30 p.m. in the hospital conference room.

Bostrom also provided an update on the continuing roof leak at the facility. He said he has been in contact with Leone and Keeble who will come back to the building and evaluate the issue.

There is a possibility a portion of the roof will have to be replaced, Bostrom said. He also mentioned EARH is still holding the $280,000 retainage on the project, which he plans to do until the roof is fixed.

The billing department will undergo professional training, provided by Eide Bailey, during the upcoming month, Bostrom said. This will help the District with collection on bills and help reduce the total AR days.

Bostrom also announced the hospital will be hosting an Open House on May 9 in coordination with National Hospital Week.

The Open House is scheduled fro May 9 from 10 a.m. until 3 p.m. During that time, community members are invited to visit and tour the facility.

In the financial update, Bostrom said the District is still recording a loss due to the ongoing issue with the previous billing for Medicaid swing bed patients.

He explained there was an error caused by previous staff that allowed pharmaceuticals to be billed, but long-term Medicaid prescriptions are not reimbursable and should not have been billed for.

The District recorded a $75,243 net loss for the current month, with a year to date net loss of $156,062.

Bostrom added the state auditor’s plan on attending the June board meeting to present the 2017 audit findings.


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