NRMC Chief Executive Officer outlines hospital priorities

Nevada Medical Regional Center's new Chief Executive Officer Kevin Leeper gave his first report to the NRMC Board of Directors at its meeting Tuesday.

"You've got a lot of talent here," Leeper said. "You've got a great facility. It's got room to grow, and we've got a lot of opportunities. I'm impressed with the cooperation of staff and physicians. People really do want to turn this around, and they are working very hard to get there."

Leeper said his top three priorities for the hospital included turning accounts receivable days (the average number of days it takes to collect the payments due) into cash, implementing the hospitalist program and resolving Cerner service requests.

In his report, he said his goal is to have 20 less AR days by the end of December (currently 101) and 60 AR days by June 2015.

"The hospitalist program is critical," he said. "We have to get that executed. When I first saw the contract with Freeman, I was a little taken back. When I look at our census, 6 or 7 patients on average that would lend themselves to hospitalist care, that's just not enough to support what Freeman is charging us. They're charging us a fare equivalent to twice that census. My instinct was to doubt if we could do that."

He said he felt glad he had taken the time to explore the contract and believes it will benefit the hospital.

"I will be meeting with Freeman to maybe rehash some terms and maybe scale back some of those terms over six months so we don't have to pay the full amount right out of the gate," he said. "Let's let this get a little traction before we roll out their whole plan. Then we can really start retaining some patients."

He said another goal is to resolve at least 80 percent of outstanding Cerner service requests by December.

"The clinical side of Cerner is really working well," he said. "I think physicians are utilizing it in a manner that's helpful for the whole process. We've still got work to do on the patient accounting side and billing. We need to clean up those processes."

He said the 2015 budget is under development, and he preliminarily anticipates a significant decrease in losses from over $6 million this year to $2.5 million next year.

"We'll have more analysis of all our product lines," he said. "We're still on key for September to get the cash stream analysis for review on a month to month basis. We'll look at data reports on product line services and the contribution margins on each of those to some degree next month."

Product line services are services the hospital offers, and cash stream analysis refers to an analysis of revenues or expenses that changes a cash account.

His other goals included recovering at least 20 more inpatient admissions, growing surgeries and procedures by 20 per month by December, and restoring an equitable and transparent compensation plan for all employees by March 2015.

In other business, the board approved a $1,800 agreement for a medical director of cardiac rehab and cardiopulmonary services, $29,900 agreement for diagnostic cardiology consultants EKG interpretations and a $59,900 property insurance renewal.

In his report, Chief Financial Officer Greg Shaw said volume had increased at the hospital by 20 percent for the month of July from last year's 26.5 to 31.6.

"That was probably our biggest month in two years or more as far as gross revenue generated," he said. "We ran about $7.8 million gross revenues for the month. I'm not going to say all of it is from the increase in volume. The cash collections came in at an average amount of $2.7 or $2.8 million. Not a bad month, but not a great month of collections."

Shaw said the volume was primarily driven by the behavioral health units in the hospital.

Despite the increase in volume and revenue, the hospital experienced a loss of $206,162 for the month, an increase in accounts receivable days from 93 to 101 and 14 days decrease in cash from 68 to 54.

"If the benefits, supplies and repairs expenses had been more toward our expectations, we would have had a break even month in July," Shaw said. "It's a loss of $206,000 to start off the year, but that's a pretty low loss compared to what we've seen for the past several months. Now that we have a better handle on contractuals, we won't be getting hit with prior month adjustments."

Shaw attributed the increased AR days to the high revenue level and average cash collection, while he said the 14 day decline in cash was the result of paying down accounts payable (money owed by the hospital to its suppliers), the prepayment of insurance and maintenance contracts and the increase in cash expenses for benefits, supplies and repairs.

Board member Larry Bledsoe said in jest, "So what you're telling us is we're going to break even for the month of August?"

After board members laughed, Shaw answered in the negative.

"I don't have the numbers, yet," he said.

Shaw also gave an update on ongoing and completed projects to generate revenue and lower expenses.

He said on the gross revenue generation side, work with Cerner was progressing and a charge master audit had been completed. A charge capture audit is scheduled for October 2014. On the expenses side, work with Cerner, employee benefit analysis, increase stop loss provision on self pay health insurance plan, service and physician contracts, clinic financial analysis, service line assessments and non-salary expense reduction were ongoing.

A charge master audit finds deficiencies in billing structure, and a charge capture audit determines if all services are charged. Service line assessments are reviews of the profitability of services the hospital offers.

Other projects slated for October included reimbursement maximization, clinical documentation improvement, supply purchase and usage, energy savings projects, phone and utility audits, review of audit fees and a price increase at clinics.

"We've done a lot," he said. "I have to believe at some point in time we're going to start seeing traction and seeing the receivables go down. I'm at a loss if all this doesn't start to show positive changes by the time we get through September and October. To me the most frustrating thing is the pace of change; I wish we could get there faster. We didn't get to where we're at in a day, week or month; it took years to get to this point. It's going to take a little while to get out of it. I think we are making positive progress."

In the long-term care financial strength report, administrative officer Steve Branstetter said both facilities made profits, $56,000, with increased volume of 3 percent from last year's 108 to 112.

"Our AR days went down 4.32 days," he said. "What we're seeing is an increase in 0 to 60 days to collect and a decrease in 61 to 120 days."

The board approved a $80,000 property insurance renewal for the facilities.

In the quality report, Chief Quality Officer Holly Bush outlined the strategic initiatives for fiscal year 2014, a reduction of catheter acquired urinary track infections, reduction of elective pregnancy inductions before 39 weeks to less than 3 percent, reduction of readmissions and improving psychiatric safety.

"The infection rate is 0 percent," Bush said. "In elective inductions, we are at 3 percent from 13 percent. Overall our readmission rate is 9 percent; our goal was 14 percent."

For psychiatric patient safety, she said the hospital improved a restroom in ER, ordered door delays and educated staff on psychiatric safety practices.

Fiscal year 2015's priorities include awareness of, error reduction in and reporting of adverse drug reactions, error reduction in bedside medication administration, reduction of patient falls and airway safety.