NIHD board seeks to find and fix financial problems
Hospital CEO to make public presentations at city, county meetings
The Northern Inyo Hospital District Board of Directors have committed to “turning over every stone” to find the problems that have led to the district’s “deteriorating financial status” and will be working to identify solutions and taking “corrective actions” that will put the district on more stable financial footing.
The board at its December meeting directed Interim Chief Executive Officer Chad Chadwick to immediately focus on the district’s finances. In addition, Chadwick will be making public presentations during the first week of January 2023 to the Bishop City Council and the Inyo County Board of Supervisors to discuss the district’s financial situation.
Board Chairperson
Mary Mae Kilpatrick added a “statement” in the board’s packet that addressed the recent revelations that instead of a fairly minor budget deficit projected for the 2022-23 fiscal year, the district is already $9 million in the red and had to cover an additional $3 million deficit from the previous year. The restated financial statements and the large deficits were revealed by the district’s new chief financial officer, Stephen DelRossi at the November board meeting. He added NIHD has a strong balance sheet and ample reserves that have been tapped to cover the red ink.
“We board members are very concerned about the information our CFO shared, and are committed to turning over every stone to identify the problems and their solutions. In that regard, we are committed to transparency in identifying solutions and promptly taking what corrective actions are required,” Kilpatrick stated.
Former CEO Kelli Davis left the district on Dec. 1, and the board is in the process of finding its next CEO. “As we deliberate on
the selection of our new permanent CEO, we will ensure that the individual selected will further what corrective initiatives are required to ensure the financial stability of the district is ensured,” Kilpatrick stated.
Financial reports
DelRossi told the board his fiscal group continues to work to improve collections and reconcile the past months’ financial statements. Losses for the current fiscal year continue to mount. The latest preliminary financial documents show NIHD was about $3.8 million in the red during October. That brings the total fiscal year losses to nearly $13 million.
The deficits are being covered from the district’s savings and other assets. The latest balance sheet shows about $30 million in cash/liquid assets/ short-term investments, with more than $55 million in total “current assets.”
The restated NIHD financial reports and resulting red ink came from a number of accounting maneuvers by former CFO Vinay Behl, which did not conform to accepted accounting principles, DelRossi said in November.
Those errors included incorrect estimates for pension contributions and other expenses. The largest misstep by Behl was incorrectly accounting for anticipated payments from Medicare, Medical and other insurance providers. There is a standard timeline for when a hospital should write off bills that have gone unpaid, DelRossi said, but Behl did not write off those “uncollectable” bills. That increased revenue estimates.
The effort continues to present a clear picture of what payments are due and which bills should be discounted or written off. So far through the first four month of the current fiscal year, DelRossi and his finance team have written off about $5 million in billings as “bad debts.”
Recovering costs
As is the case with most hospitals and health care providers, actual costs to provide services are rarely fully covered by government or private insurers.
Since coming onboard, DelRossi has gained approval to hire additional staff in the finance department and add three new staff members to the collections department.
The NIHD board also revived its Finance and Audit Committee. New board member Melissa Best-Baker will represent the board on the committee. Best-Baker, of Big Pine, worked for the Inyo County Health
Department for about 15 years handling grants and fiscal chores, and then moved to the county Health and Human Services fiscal department in 2015. She is currently the HHS deputy director of Fiscal Oversight and Special Operations.
Interim CEO Chad Chadwick will be addressing the status of the district’s finances and other issues at the Monday, Jan. 9, Bishop City Council Meeting and the Tuesday Jan. 10 Inyo County Board of Supervisors meeting.