Local News

Tuesday, Feb 05 2013 04:43 PM

Slow payments compel supervisors to raise KMC cap again

BY JAMES BURGER Californian staff writer jburger@bakersfield.com

Supervisors grumbled a bit Tuesday at being forced to approve another in a long line of increases to the amount of cash Kern Medical Center can draw from the county's operational fund to stay afloat.

But they approved the $9 million increase -- to a total of $97 million -- and seemed to accept that the loan balance will be raised again soon.

By April it will peak at $113 million, said KMC Chief Executive Officer Paul Hensler.

"From that point on, the balance begins to decrease," Hensler said, as payments from the state begin to come in.

Two weeks later it is expected to go below $80 million, said hospital Chief Financial Officer Houshang Abd.

He said he is working to improve the hospital's cash flow from patients, control outflow of funds and make sure payments from the state come in. If he can do that, he said, he hopes to have Kern Medical Center self-sufficient in a year or less.

"What do you mean 'self-sufficient?'" asked Supervisor Mick Gleason.

"Self-sufficient means we want to bring the balance of the loan very close to zero," Abd said.

"What do you mean, 'very close to zero?' Is it $10 million, $0 million, $500,000, a dollar?" Gleason persisted.

Abd said he's still working on firming up the data and, until he does, it's hard to answer that question specifically. He promised to get that information to supervisors as soon as it's developed.

The struggle for Kern Medical Center, Hensler said, is the slow pace of the complicated system of state and federal bureaucracy that eventually reimburses Kern Medical Center for care it provides to people without insurance.

Kern Medical Center uses the general fund loan to cover it's costs while it waits weeks and months for a check from the state. In recent months the state has gotten further and further behind.

Hensler said that health care reform should take some of the pressure off of those state programs and help Kern Medical Center right its financial ship.

"With the Affordable Care Act coming into effect, more and more of our patients should move into straight Medi-Cal, which pays us on a timely basis. We will be less dependent on some of the other pools of funds that come to us," Hensler said.

"We're anticipating what will happen in the new year (2014) is the state will finally catch up and pay off all of these funds and then going forward we'll start to receive our payment on a relatively routine basis."

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