LOWVILLE The Lewis County General Hospital board of managers has approved a 2014 budget that anticipates a $3.2 million surplus, despite some members concerns that it paints a too-rosy picture of the hospitals financial situation.
My concern is not necessarily a zero budget but an achievable budget, Legislator Philip C. Hathway, R-Harrisville, chairman of the legislative Hospital Committee and board of managers member, said Wednesday night during a budgetary discussion.
Mr. Hathway said he was worried about adopting a feel-good budget that, in his opinion, projects revenue sources that arent completely set and may be overly optimistic on physician production. With county reserves starting to erode, the budget should be conservative and administration should be prepared to make hard decisions if the facility is to remain county-owned, he said.
However, the board ultimately voted 6-3 to approve a $64.49 million spending plan anticipating the large surplus.
Board members William J. Wormuth, Rae Rice, Randy Essenlohr, Kevin M. McArdle, Leonard R. Puzzioli and Charles W. Truax Jr. voted to approve the proposed budget, while board President Michael F. Young and Edward Knapp joined Mr. Hathway in opposition, suggesting a more conservative budget be adopted. Gary L. Turck and Timothy J. Reagan were unable to attend Wednesdays meeting.
The split vote may set up a conflict between the board of managers and the county Legislature, since the hospitals budget also must be approved by that body. Mr. Hathways committee will have significant influence on how the hospital budget is presented to members of the Legislature.
The budget projects a $3.6 million increase in spending, or 6 percent, over this years amended $60.88 million budget. That includes roughly $1 million in expenses from the expected addition of an orthopedic surgeon who is expected to add more than $2 million in revenues.
The spending plan shows an expected increase in employee salaries from $25.4 million to $26 million and a hike in benefits from $12.9 million to $13.4 million.
The budget also shows a net loss of $500,000 stemming from the Affordable Care Act, but additional revenues including $3 million from designation as a critical-access hospital and $1.5 million from intergovernmental transfer funding are expected to more than offset that.
Hospital leaders had hoped to have critical-access designation by July, but that process has been delayed as some language in contracts with physician groups, including the emergency room doctors, are being reworked to comply with state Department of Health recommendations.
The expected state approval would be followed by a federal inspection of the hospitals physical layout and review of policy and procedures before designation ultimately is granted, hospital CEO Eric R. Burch said.
Mr. Burch said that he was hesitant to give a timetable but that critical-access status could be granted by the start of the new year.
Rome attorney and former state Sen. Raymond A. Meier, who is assisting the hospital with the designation change request, said the last piece of the states punch list of requested items has been submitted.
I either call or email every day, he said.
Intergovernmental transfer, or IGT funding, intended to reimburse health care facilities partially for losses incurred on Medicaid, uninsured and charity care patients, is paid at unspecified times by the federal government, with the feds covering half and the county required to cover the other half.
Mr. Young said Wednesday that in response to concerns voiced at previous budget discussions about iffy revenues, interim Chief Financial Officer Jeffery W. Hellinger had prepared an alternative, break-even spending plan budgeting only $1.8 million from critical access and none from intergovernmental transfer, while setting the projected Affordable Care Act hit at $1 million.
However, other board members expressed the desire to set loftier goals for administrators and staff and, hopefully, improve public perception of the facility and its finances.
Mr. Wormuth, a past hospital board chairman, moved that the original budget be approved, and there was sufficient support to pass it.
Mr. Hellinger said he would tend to be conservative but noted that the facilitys rebound from a $5.2 million operating loss already has been a monumental turnaround. While the facility at the end of September owed the county $6.1 million, anticipated IGT and meaningful use money should more than cover that, he said.
On Thursday, Mr. Hellinger said that for purposes of the county budget, the hospital spending plan will be altered likely through reduction of projected revenues to show balanced expenses and revenues like all other departments.