By By JOHN EBY / Dowagiac Daily News
CASSOPOLIS – Isolated Cass County Medical Care Facility "experienced one of its most difficult years" in 2007-2008, Administrator Merri Terborgh and Dowagiac certified public accountant Rebecca L. Moore acknowledged to the Board of Commissioners Thursday night.
A Sept. 30, 2008, audit conducted by Plante Moran chronicles alarming financial swings.
Cash decreased $451,000, from $1,971,866 on Sept. 30, 2007, to $1,520,858 a year later.
Accounts receivable increased $322,000 over the same period, from $824,466 to $1,146,152.
Accounts payable and liabilities mounted $393,000, from $463,641 to $856,257.
Total operating revenue eroded $13,000, from $6,294,976 to $6,281,993.
Salaries and wages climbed $181,000, from $3,199,805 to $3,381,118 in tandem with other expenses rising $561,000 12 months, from $3,008,582 to $3,569,527.
Operating income showed a $755,000 decrease, from a profit of $86,589 to a $668,652 loss.
The women said a substantial increase in expenses included fines and assessments.
Outside consultants and advisers who had to be brought in to return the nursing facility to compliance contributed to the drop in cash by year end.
Accounts receivable and accounts payable both increased considerably mostly due to problems with Medicare reimbursement lapsing last summer and a subsequent delay in issuance of payments to the facility, then the resulting lack of cash to pay vendors in a timely fashion.
The audit found administrative expenses soared $344,000 primarily due to fines and consultants brought in to address deficiencies and compliance issues.
Facility and plant operations jumped $75,000. Therapy services increased $50,000. And nursing services increased $255,000.
"Just so you know," Moore advised commissioners, "we are starting down a path that's going to take months. It's probably going to be the end of this year before we have any good answers. We are putting pretty much anything that has to do with finances and accounting under a microscope out there and trying to determine if it's being done the most efficient way, which we've already determined in many ways that is not the answer. We're changing methodology. Everything's subject to being looked at and changed. Little by little, that's what our plan is right now. Nothing was being done out there in a timely manner."
A glimmer of good news amidst the gloom, Moore noted, "Because the facility had been run so well for so long, in '06 they had 167 days cash on hand. In 2007, they had 174 days cash on hand. Even with the results of last year, they have 129 days cash on hand, which compared to the benchmark Plante and Moran uses of 104. We're not financially destitute. We just need to get ahold of our problems and get them fixed. We haven't lost so much ground that we can't make it up. We just need to get a grip on things," such as "lack of billing. There have been items out there that have not been billed properly. We've got to get things posted and up to date. For example, I went in there in December, when the auditors were starting. None of the bank accounts had been reconciled for the entire year. Financial statements were being prepared outside of the software, which to me is not a very trustworthy way to do it."
Terborgh came on board in October. "In terms of positive changes for the facility, one of the first major decisions I made was to call Terry (Proctor, county administrator) to tap into your financial operation and get some help. He introduced me to Becky, and that has been the greatest positive change. One issue was that the Medical Care Facility became an isolated island. There was no input from the outside world in terms of regulations, how to document things to keep compliance. There's never been a question that we provide good care," but as far as the state is concerned, "If you don't document it, it didn't happen. If you don't keep up on the rules, you don't get things written down correctly. A lot of money went to high-powered consultants that the state recognizes. They saved the facility last summer. It's like the MasterCard ads: Saving the facility. Priceless."
Terborgh said Moore's office "drug us into this century. Electronic transfers were not being done previously. We literally had staff running up and down the road with bank deposits. High accounts receivables are being worked, old bills are being cleaned up. All in all, the business office is beginning to hum and look like a real business."
Terborgh stressed, "It's not all been gnashing of teeth," although she was confronted with converting more than 80 televisions to digital before Feb. 17. "Cable doesn't come anywhere near our cornfield," she said, but county Maintenance Supervisor Dave Dickey assisted. Residents enjoy 24 satellite and seven local channels, including one the facility can program.
The MCF also has a new maintenance director with 32 years of experience who can "fix a lot of things we previously had to hire out," Terborgh said. "We for the first time have a licensed social worker, which if we ever want to go wild and impetuous and build another unit on, as the building was designed, that's a necessary requirement."
Although small community hospitals "are a long way from electronic medical records" that President Obama favors, "We pretty much are there. Ninety percent of our records are automated. The next step is to tie that into our billing. In a very short time we're taking leaps."
Terborgh recapped for commissioners the MCF's "wonderful holiday season," including a New Year's Eve celebration with "hats and horns, a fake clock, shrimp, meatballs and live music.
"Residents voted to have it at dinnertime so they didn't have to stay up late," she said. "Everybody headed to bed about 9 o'clock and felt good the next morning. The staff are very warm, caring people who provide good care. They decorated the dining room."
At Thanksgiving, "We did turkey dinners for 90 family members as well as our 80 residents. We did an open house with hors d'ouevres at Christmas for family members so they could be with their loved ones in a party setting," Terborgh said.
"I've never seen such a turnaround," praised Commissioner Carl Higley Sr., R-Ontwa Township, thanking Moore, Terborgh and Dickey.
Higley lauded Terborgh's literal "open door" policy. "Used to be, the doors to the offices were closed. It was not like the public place it is."