Financial reversal — Hospital leaders outline plan for financial recovery

When interim CEO Pat Ryan arrived at Weston County Health Services on March 19 to cover former CEO Cathy Harshbarger’s leave, one of the first questions she asked Chief Financial Officer Paul Maiellano was how many days of cash the hospital had on hand, a crucial metric that in rural health care is often closely watched.

The answer, five days, was so low she thought she had misheard him.

“One-five?” Ryan recalled asking.

Maiellano confirmed the cash position, and Ryan, who expected to work for WCHS for six weeks, got to work.

“It is a serious situation, that’s for sure, but I don’t want panic,” Ryan told community members at the May 21 board meeting. “I want you to see there’s a plan.”

That plan, developed with input from hospital leaders, focuses on four areas: strengthening billing and collections, increasing revenue and service-line opportunities, examining expenses and pursuing growth.

“You can’t cut your way out of this problem,” Ryan said. “You have to look at a balanced approach.”

After Harshbarger resigned in early May, trustees asked Ryan to remain in the role. Some community members have questioned the cost of the arrangement, which is about $9,000 per week. Board member Mike Roberts defended the decision during the May 21 meeting, saying trustees viewed Ryan’s experience in rural hospital turnarounds as necessary given the organization’s financial condition.

He said it was comparable to finding the best doctor to treat a serious illness or hiring the best attorney to address a legal issue.

“She’s an expert in rural health care, and she’s provided a way forward that absolutely spells that out, painful as it may seem,” Roberts said.

Ryan said the stabilization plan is designed to improve the hospital’s financial position while preserving local access to care.

“Cash is oxygen, and cash flow is impacted by revenue cycle performance (billing and collections), recruitment (decreasing expenses) and patient volumes (improved access and growth),” Ryan told the NLJ.

She said all three areas must improve simultaneously and “immediately.”

Billing and collections

The first pillar of the plan focuses on improving billing and collections, often referred to as the revenue cycle.
Leadership has set collection goals of $1.48 million per month for hospital-based services and $720,000 per month for clinic-based services. The plan also calls for capturing all eligible charges, improving home health billing, increasing private-pay collections and establishing clearer financial policies for discounts, write-offs and sliding-fee programs.
To reduce risk that claims will later be denied or delayed, the plan seeks to ensure that insurance approvals are obtained before providing acute care, swing beds, radiology, outpatient infusions and cardiac rehabilitation.
Ryan said hospital leaders are regularly reviewing billing reports to find out why some claims are not being paid and what needs to be fixed.
“Where’s our dollars and cents, and where are the holdups?” Ryan said.
Ryan pointed to early signs of progress in the billing process. One key measure improved from 20.7 days to 8.4 days, meaning patient accounts are moving from discharge to final billing much more quickly.
The plan also calls for providing all payer contracts to the hospital’s billing contractor and renegotiating outdated insurance contracts where possible to improve reimbursement rates.
Maiellano told the NLJ that one challenge involved provider credentialing and enrollment issues that delayed payment for services the hospital had already provided. He said more than $5.6 million was sitting in Epic billing work queues when he arrived, with some accounts awaiting resolution for years.

Revenue opportunities

The second pillar focuses on increasing revenue opportunities and making sure existing services are performing as effectively as possible.
Ryan said hospital leaders are evaluating individual service lines, reviewing provider productivity and identifying areas where additional revenue can be generated. The goals also include developing marketing plans to increase patient and resident volumes in the emergency department, long-term care, acute care, radiology, lab services, home health, clinics and retail pharmacy.

Managing expenses

Expense management forms the third pillar of the plan.

Ryan said controlling labor costs is critical because payroll is typically a hospital’s largest expense. One of the plan’s primary goals is reducing reliance on contract labor by recruiting and retaining permanent employees. Ryan said at the meeting that the hospital is paying about $2 million or more annually on contract labor and that contract labor typically costs about triple that of employee labor. The plan includes efforts to reduce overtime, review vendor contracts and evaluate purchasing practices for ways to make sustainable savings.

Ryan said during the meeting that employees should take their meal breaks, and shift schedules should be examined to make sure they align with peaks in patient volume.

She said the plan involves reducing nursing hours per patient-day levels in the Manor to align with industry standards but still exceeding the minimum Wyoming State standard of 1.5 nursing hours per patient day for non-skilled residents and 2.25 for skilled nursing residents. As of May 3, staffing schedule reflects the lower rate, the plan stated. 

According to the plan, certified nursing assistants will receive help from environmental services, central supply chain and dietary technicians in dining rooms.

Ryan said WCHS has implemented referral bonuses and retention bonuses and will hold a career fair June 2. She said leadership is also developing a broader recruitment plan. She said the hospital still relies on agency workers in several departments and that leadership intends to evaluate whether those positions should be filled with hospital employees or reduced if patient volumes do not justify them.

Pursuing growth

The fourth pillar focuses on growth.

Ryan told the NLJ that patient volumes are down roughly 30% compared with the prior year.

“I believe this reduction is multifactorial and not solely due to financial instability concerns,” she said.

Ryan said the hospital may be able to improve its patient retention too. The plan includes exploring expanding telehealth assistance from specialists for more complex patients to reduce the number of patients the hospital needs to send to other facilities. She said the hospital will also work on tracking patients it has sent to other facilities to make sure they come back to WCHS for rehab. Leadership is also building relationships with referring physicians at Monument Health to encourage those specialists to refer their patients to receive radiology services at WCHS.

Moving forward

Ryan told the NLJ that success can be gauged based on days cash on hand, discharged not final billed days, clean claim rate, actual versus goal monthly collections, patient volumes compared with budgeted for the clinic, emergency department, acute care, swing bed, outpatient lab and radiology visits, the Manor census, and actual salary and benefit expense versus budget salary expense.

“Everything is going to have a quantifiable goal,” she said at the meeting.

Ryan said the board should support the plan, challenge it and offer insight as it evolves. Ultimately, she said, the goal is maintaining local access to health care while putting the organization on firmer financial footing. Ryan encouraged residents to provide feedback on the plan and to attend board meetings. She also said that any staff member who experiences retaliation for voicing concerns should contact her.

Ultimately, the goal is maintaining local access to health care while putting the organization on firmer financial footing.

“We improve access, we provide access, and we protect patient care,” Ryan said.