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Indian River hospital seen needing an extra half-million from taxpayers for indigent care

STORY BY MEG LAUGHLIN (Week of January 23, 2014)

Hospital District trustees were stunned to learn last Thursday that Indian River Medical Center leadership now believes it is going to need over a half-million dollars more than budgeted from taxpayers to cover indigent care in the current fiscal year.

The latest surprise, the climax of a series of monthly overages that began when the hospital asked for $50,000 more than budgeted in October, had district trustees sputtering given that they had been assured by hospital CFO Greg Gardner that the budget problems had been rectified.

Hospital district treasurer Trevor Smith called the continuing mistake  “a half million dollar embarrassment.”

All told, Gardner’s latest forecast was that the total amount over budget for fiscal year 2014 would be a whopping $535,000, which the District will have to take from reserves set aside for unanticipated expenses that may be caused by the new healthcare law.

This means, said District chairman Tom Spackman, that it would be more “difficult to fund the other agencies” that rely fully or partially on Hospital District funding.

Just a week earlier, leaders of the program We Care, which arranges for more than 100 physicians in the county to treat indigent patients pro bono, had asked the Hospital District for over $200,000 to secure a permanent clinic space and hire a primary physician.

The unexpected $535,000 bill from the hospital makes it likely the District will have to put programs like We Care and others that help indigent patients in Indian River County on the back burner.

Spackman told hospital leadership at last week’s Hospital District meeting: “We are very disappointed in the quality of the hospital’s management of finances.”

Hospital CFO Gardner responded: “We under-billed. Yeah, shame on us, Dr. Spackman.”

As the back-and-forth continued, hospital CEO Jeff Susi watched from the audience.

In October, when hospital leadership surprised the District, which directs taxpayer dollars to the hospital for reimbursement for indigent care, by asking for an extra $50,000, Gardner assured the District trustees it would not happen again.

But, it did – both in November and December – when Gardner said the hospital needed another $250,000 over and above what was  expected from taxpayers.

Nevertheless, for January and the rest of the 2014 fiscal year the amounts needed would be within budget, Gardner guaranteed. But at Thursday’s Hospital District meeting, he told worried District trustees that the hospital would continue to need more money than budgeted for indigent care.

“It’s an imperfect process. We missed our projection,” Gardner said.

“That is over and above what we asked taxpayers for. That’s an embarrassment for us. It’s big, larger than what any of us anticipated,” said Hospital District treasurer Trevor Smith.

Gardner defended the amount by explaining that the cost for 2013 was six percent over 2012 and that – even with the extra $535,000 – the amount for 2014 would only be six percent over 2013.

But the CFO’s explanation did little to mitigate the surprise overcharge for  District trustees.

“The problem is this budget from the hospital causes embarrassment for the District with the taxpayers, ”  said Hospital District chairman Spackman.

Gardner explained that the half million dollars in miscalculations occurred because “a change in the electronic system threw us off.”

Indian River Medical Center, he said, had trouble with the electronic system it used  for qualifying and tracking patients and, as a result, had “a build-up of outstanding accounts.”

District treasurer Smith questioned the explanation, asking Gardner if the additional amount was caused by increased indigent patient volume, as well as a backlog from the electronic system.

Gardner conceded that the cause was both factors.

“My problem, Greg, is that we were told we had caught up.... The first surprise was October. The second surprise was November and December.  The third surprise is right now.  Is this the last surprise? We told taxpayers what we needed, and now we have to tell them we need more,” said Smith.